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Monday, January 25, 2016

Pre Session- Dalal Street to extend rebound as global risk appetite returns

Indian equity benchmarks may witness a bullish opening on Monday tracking a rebound in global equities amidst bets of further central bank stimulus to prop up a recovery in the world economy, bolstering the lure for risky assets. A positive trend in Asian equities coupled with strength in the CNX Nifty Index futures for January delivery which advanced by 0.35 per cent or 26 points at 7,452.5 at 10:26 am Singapore time signals a gap up opening for the Sensex today. Global central banks have hinted that they may support the world economy with the European Central Bank (ECB) signaling a likely boost to its stimulus program as early as March while Bank of Japan may charter a similar course and expand monetary easing in the near-term. The US Federal Reserve which meets this week is unlikely to hike interest rates after a maiden lift-off since 2006 in December. A recovery in oil prices which are back above the USD 32 per barrel may also support sentiment at Dalal Street as a commodity rout eases. The 30-share benchmark on Friday snapped a two-day drop, rallying by 473.45 points or by 1.98 per cent to end at 24,435.66 as ECB’s stimulus hint and an oil rebound shored up sentiment across the globe. With markets closed on Tuesday on account of the Republic Day holiday, the Sensex may witness a volatility-ridden week as traders roll over their positions ahead of the expiry of the January Futures & Options (F&O) contracts on Thursday while Q3 earnings from the likes of HDFC, HDFC Bank, ICICI Bank, Bharti Airtel, Maruti Suzuki, Vedanta, Yes Bank. L&T and NTPC may weigh on sentiment. Investors will also be eying the two-day policy meet of the US Federal Reserve beginning Tuesday, while global market cues, investment by foreign investors, movement of the rupee against the dollar and crude oil prices are also likely to dictate the domestic market direction this week.

Asian shares extended an impressive rebound as risk appetite returned as major global central banks vowed to come to the rescue of a fragile world economy while oil extended a renewed rally, helping stem a financial market rout. China’s Shanghai Composite eked out a handsome rally led by gains in coal and steel producers after policymakers committed to cut overcapacity in these industries. Hang Seng surged almost 2 per cent while Japan’s Nikkei 225 rose over 1 per cent on speculation of further monetary stimulus from global central banks. Optimism of further stimulus support from central banks bolstered Wall Street on Friday as the S&P 500 marked its strongest two-day rally in three months as investors shrugged off mixed US economic data. The Dow Jones Industrial Average advanced 1.33 per cent; the Nasdaq Composite rose 2.66 per cent while S&P 500 closed up 2.03 per cent. While a gauge of US leading indicators declined for the first time in three months in December 2015, sales of previously owned homes surged in December, signaling a mixed outlook for the world’s biggest economy.

Top traded Volumes on NSE Nifty – Vedanta Ltd. 36038492.00, State Bank of India 21432409.00, Idea Cellular Ltd. 16875423.00, Axis Bank Ltd. 15009103.00 and ICICI Bank Ltd. 13771384.00.

On BSE, total number of shares traded was 32.22 Crore and total turnover stood at Rs. 3498.12 Crore

On NSE Future and Options, total number of contracts traded in index futures was 415710 with a total turnover of Rs. 21621.13 Crore. Along with this total number of contracts traded in stock futures were 855720 with a total turnover of Rs. 38691.96 Crore. Total numbers of contracts for index options were 5242729 with a total turnover of Rs. 284791.99 Crore and total numbers of contracts for stock options were 419641 with a total turnover of Rs. 19922.24 Crore.

The FIIs on 22/01/2016 stood as net seller in equity and debt. Gross equity purchased stood at Rs. 4042.86 Crore and gross debt purchased stood at Rs. 637.11 Crore, while the gross equity sold stood at Rs. 5663.73 Crore and gross debt sold stood at Rs. 803.25 Crore. Therefore, the net investment of equity and debt reported were Rs. -1620.87 Crore and Rs. -166.14 Crore.