17.Feb.2016: Indian Pre Market Report - Gap up opening on the cards for Dalal Street

Pre Session- Gap up opening on the cards for Dalal Street
17/02/2016


Indian equity benchmarks are likely to open higher on Wednesday tracking a mostly positive trend across markets in Asia and a bullish finish at Wall Street overnight amidst renewed risk taking appetite as concerns over a faltering global economic recovery ebb, supporting buying momentum in equities. Strength in the CNX Nifty Index futures for February delivery which climbed 0.63 per cent or by 45 points at 7,903 at 10:30 am Singapore time, signals that the Sensex may witness a positive opening today. Back home, the next major trigger for markets is the Union Budget on February 29 with India Inc. seeking strong policy measures to spur domestic demand and revive investments to counter a global slowdown that is taking a toll on exports which declined for a fourteen straight month, down by 13.6 per cent to USD 21 billion in January 2016 from the same month a year ago. The upcoming Budget Session of Parliament which begins next week is also very crucial with traders hopeful that the NDA government may be able to overcome the GST hurdle and get the green light for the landmark fiscal reform which remains stuck in the Upper House. Snapping a two-day rally, the 30-share Sensex on Tuesday tumbled by 362.15 points or by 1.54 per cent to end at 23,191.97 led by profit-booking after Monday’s surge while a continued slump in exports raised concerns over the health of Asia’s third biggest economy. 

Most Asian stocks climbed today as worries over China’s economic outlook eased, countering weakness in oil prices which fell amid bets that a deal between major oil producing nations to freeze output at January levels may fail in combating a growing supply glut. China’s Shanghai Composite advanced after a 3.3 per cent surge on Tuesday amid government efforts to accelerate growth in the world’s second biggest economy as media reports emerged that China’s chief planning agency is making more funds available to local governments for financing new infrastructure projects whilst the country’s cabinet is considering reducing the minimum ratio of provisions that banks need to set aside for bad loans, in a bid to spur additional cash for lending. Hang Seng rose but Japan’s Nikkei 225 fell as the country’s machine orders tumbled 3.6 per cent in December 2015, year on year, signaling weakness in capital spending in the world’s third biggest economy which succumbed to a renewed contraction last quarter. Wall Street posted its best two-day gain in more than five months as markets reopened on Tuesday after the Presidents Day holiday as traders snapped up shares of beaten down banks, technology and retail companies. Investors looked past data which showed a seventh straight contraction in a New York manufacturing gauge in February, signaling a continued factory slowdown in the world’s biggest economy. The ISM said that its New York manufacturing index fell to -16.6 this month, compared to -19.4 in January, with a reading below 0 signaling contraction. The Dow Jones Industrial Average advanced 1.39 per cent; the Nasdaq Composite rallied 2.27 per cent while S&P 500 jumped 1.65 per cent.