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16
March 2017
I had mentioned in
Wednesday’s closing report that Nifty, Sensex remained firm. The major indices
of the Indian stock markets were range-bound on Thursday and closed with small
gains over Wednesday’s close. The trends of the major indices in the course of Thursday’s
trading are given in the table below: The Total
Investment & Insurance Solutions
 |
Major Indices (The Total
Investment & Insurance Solutions)
Positive
global cues, a strong rupee and healthy buying in metals, capital goods and
consumer durables stocks, brought a cheer to the Indian equity markets on
Thursday. The key indices closed with gains of more half a per cent each, well
absorbing the 25 basis points (bps) rate hike by the US Federal Reserve on
Wednesday for the second time in three months.
The
Indian economy is strong enough to absorb the impact of the US Federal
Reserve's interest rate hike, the government said on Thursday. "Indian
markets well placed to absorb US Fed rate hike. Gradual approach in future
increases augurs well for emerging markets," India's Economic Affairs
Secretary Shaktikanta Das said in a tweet, a day after the US Fed hiked lending
rates for the third time since the 2008 global financial crisis, with the
American job market strengthening and the control of inflation rising toward
its target. The US Fed on Wednesday raised its key interest rate by 25 basis
points (bps), making its third rate hike since the financial crisis and the
second time in three months. In December 2016, the US Fed increased its benchmark
rate by 25 bps in the first rate hike in 2016 and just the second in a decade.
The first was in December 2015. "In view of realised and expected labour
market conditions and inflation, the central bank decided to raise the target
range for the federal funds rate by 25 basis points to 0.75%-1.0%," the US
Fed's policy-making committee said in a statement released after its two-day
meeting in Washington. The committee did not indicate any plans to accelerate
the pace of monetary tightening. Further rate increases would only be
"gradual", it said. Indian equity markets reacted positively and the
key indices opened higher on Thursday.
Commenting
on the development, State Bank of India's Chief Economic Adviser Soumya Kanti
Ghosh said its impact on India "will be muted partly because the results
of UP elections have altered the view of country risk for India beyond
2019." "Though the currency can appreciate in the short term,
rupee is expected to settle at Rs 66.5-67.5 per dollar at the end of 2017.
However, this view is subjected to position taken by other central banks in
response to the US Fed rate hike." "The fallout of present rate
hike is already divergent with Bank of Japan maintaining a status quo and
Peoples Bank of China indicating a tightening stance," Ghosh said in a
report. Based on the analysis, currency markets are expected to be stable
and foreign institutional investors are not likely to either flood the Indian
market with investments or withdraw in a hurry.
India's
exports revived for the sixth straight month, as the country's merchandise
shipments overseas reported a double-digit growth during February, official
data showed on Wednesday. According to data released by the Ministry of
Commerce and Industry, the exports grew by 17.48% to $24.49 billion from $20.84
billion worth of merchandise shipped out during February 2016. However, the
country's imports during the month under review increased by 21.76% to $33.38
billion from $27.41 billion worth of merchandise which were shipped out in during
the corresponding month of last year. Consequently, the trade deficit during
February reduced to $8.89 billion from $9.84 billion reported for the month
before. On a year-on-year (YoY) basis, the trade deficit stood at $6.57 billion
during same month of 2016. "The growth in exports is positive for USA
(5.61%), EU (1.68%) and Japan (10.87%) but China has exhibited negative growth
of (-6.20%) for December 2016 over the corresponding period of previous year as
per latest WTO statistics," said a Commerce Ministry release. Cumulatively
for the April-February period, exports rose marginally by 2.52% in dollar terms
at $245.4 billion, as against exports of $239.3 billion over the same period
last year. "Non-petroleum and non-Gems and Jewellery exports in February
2017 were valued at $18.01 billion against $14.99 billion in February 2016, an
increase of 20.15%," a statement here said. With the Indian economy doing
well, the stock markets are expected to be bullish. The Total Investment & Insurance Solutions
Macro-economic
factors are gaining importance in our stock markets and hence fund managers of
mutual funds and foreign institutional investors are likely to be the decision
makers on large scale investments. The Total
Investment & Insurance Solutions
The
top gainers and top losers of the major indices are given in the table below:
 |
Top Gainer (The Total
Investment & Insurance Solutions)
The
closing values of the major Asian indices are given in the table below: The Total Investment & Insurance Solutions
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| Asian Indices (The Total Investment & Insurance Solutions) |
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