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Indian markets trade on a choppy note throughout the session

Jainam Research | 31 Jan, 2017  | Follow Author | Add to my Favourites 
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Post session - Quick Review

Indian equity benchmarks traded on a choppy note throughout the day and closed in red as investors remained cautious ahead of Union Budget scheduled on February 1. Technology stocks pulled the market down after a new legislation that has been introduced in the US House of Representatives that seeks to double the minimum salary of H-1B visa holders. The markets made a weak start and traded in red in early deals as traders remained concerned with the CII - IBA Financial Conditions Index for Q4 (January-March) FY2016-17 recording a drop below the 50 mark owing to expectation of banks and financial institutions of deterioration in the overall financial conditions in the economy. Separately, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest round of Economic Outlook Survey has said that Indian economy will grow 6.8 percent for the year 2016-17 due to a slowdown in the services and infrastructure sectors post demonetization. It added that this is 0.5 percentage points lower than the estimate of 7.3 percent put across in the last round. The economists in the survey have forecasted that the government’s latest demonetization decision will lead to a slowdown in the industrial and services sector growth. Investors took note of the Economic Survey 2016-17, which highlighted the steps that the government was taking and measures it should take to minimize the impact of the demonetization drive. The Economic Survey for 2016-17 said that demonetization will shave off the economic growth for the current fiscal by 0.25 percent to 0.50 percent though it will have long-term benefits for the economy by reducing interest rates and eliminating corruption, besides bringing in more activities in the formal sector. The cash squeeze, following junking of high value notes of Rs 500/1000 on November 8, 2016 will have significant implications for GDP, reducing 2016-17 growth by 0.25 to 0.50 percentage points compared to the baseline of 7 percent.

IT stocks Infosys, TCS, Wipro and Tech Mahindra closed in red on news of a new US legislation that seeks to double the minimum salary of H-1B visa holders, making it difficult for firms to replace American employees with Indian software professionals. The High-Skilled Integrity and Fairness Act of 2017 introduced by California Congressman Zoe raises the salary level at which H-1B dependent employer are exempt from non-displacement and recruitment attestation requirements to greater than $130,000.

The broader indices ended in red; the BSE Mid cap index was down by 1.20%, while Small cap index was down by 1.10%. (Provisional)

The sole gaining sectoral index on the BSE was FMCG up by 0.07%, while IT down by 2.94%, TECK down by 2.46%, Oil & Gas down by 1.74%, PSU down by 1.44% and Metal down by 0.98% were the losing indices on BSE. (Provisional)

On the flip side, TCS down by 4.46%, GAIL India down by 3.75%, Adani Ports & Special Economic Zone down by 3.20%, Sun Pharma down by 2.26% and Tata Motors down by 1.94% were the top losers. (Provisional)

Meanwhile, the CII-IBA Financial Conditions Index based on a survey of leading banks and financial institutions on their expectations of key financial and economic variables determining the financial conditions in the Indian economy, has shown that financial conditions of the Indian economy deteriorated in the fourth quarter. CII - IBA financial Conditions Index for the fourth quarter of FY2016-17 fell below the 50 mark to 48. This shows slowdown in the overall financial conditions in the Indian economy reflecting from expectation of banks and financial institutions that worsening of external financial linkages and domestic economic activity will bring deterioration in economy.

The CNX Nifty ended at 8556.55, down by 76.20 points or 0.88% after trading in a range of 8552.40 and 8631.75. There were 11 stocks advancing against 40 stocks declining on the index. (Provisional)

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About Jainam Research

Jainam Research was incorporated in 2003 with the vision to be the most preferred organization providing all financial services across the country. The foundation is on "Value" Systems - "Value" addition to Corporate, Retails and HNI Individuals through superior Wealth Creation Practices.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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