Dear Trader…
Indian equity benchmarks extended their gains to the fifth consecutive session and ended with gains of over one and half percent on Monday, led by gains in Banking, IT, TECK and Finance shares, shrugging off weakness across most global markets. The start of the day was positive, aided by Chief Economic Advisor (CEA) V Anantha Nageswaran’s statement that prudent budget assumptions for FY23 will ensure that the macro-fundamentals will be able to hold-up in the near-term amid heightened concerns over the impact of the Russian invasion of Ukraine on the Indian economy. Some support also came as India's foreign exchange (forex) reserves rose by $394 million to $631.92 billion in the week ended March 4 led by a sharp jump in foreign currency assets. The forex reserves had declined by $1.425 billion in the previous week.
Domestic sentiments remained upbeat throughout the day, taking support from Fitch Ratings’ report that strengthening economic recovery and stable financial metrics will help state-owned banks have stable earnings during the next financial year, aided by the gradual unwinding of regulatory forbearance through the year.
Nifty futures opened at 16624.95 points against the previous close of 16647.75 and opened at a low of 16610.15 points. Nifty Future closed with an average movement of 302.45 points and a rise of around 261.25 points and 16909.00 points...!!
On the NSE, the midcap 100 index will rise 0.20% and smallcap 100 index is closing rise 0.22%. Speaking of various sectoral indices only Realty, Metal, Pharma and FMCG stocks were seen selling on the NSE, while all other sectoral indices closed higher.
At the start of intra-day trading, February gold opened at Rs.52623, fell from a high of Rs.52786 points to a low of Rs.52152 with a decline of 453 points, a trend of around Rs.52425 and March Silver opened at Rs.70000, fell from a high of Rs.70398 points to a low of Rs.68809, with a decline of 972 points, a trend of around Rs.69398.
Meanwhile, Fitch Ratings in its latest report has said that strengthening economic recovery and stable financial metrics will help state-owned banks have stable earnings during the next financial year, aided by the gradual unwinding of regulatory forbearance through the year. It also said private sector banks are better placed to reap the benefits of recovery and will continue to increase their market share both in credit as well as deposits. Noting that regulatory forbearance has suppressed state-owned banks' immediate capital requirements by deferring recognition of stressed loans, the report said private banks are most competitive on this front, too.
It expects earnings and profitability of banks to recover next fiscal on the back of falling loan impairment charges that improved to 1.2% in H1 of FY22, from 1.7% a year ago, because forbearance will limit fresh loan impairments. Asset quality pressure will ease on the back of improving recoveries from impaired loans, while earnings are supported by adequate pre-provision profit of 3.6% in H1, up 10 basis points against a year ago, thanks to stable net interest margins and operating costs.
Technically, the important key resistances are placed in Nifty future are at 16970 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 17007 – 17077 levels. Immediate support is placed at 16808 – 16676 levels.
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