Dear Trader…
Indian equity benchmarks continued volatile streak for a third straight day and ended marginally lower on Friday as investors assessed developments around the Ukraine crisis and US Federal Reserve's policy tightening. Markets made weak start, as traders remained cautious with Crisil Ratings’ report stated that since the introduction of new asset quality norms last November that brought in shadow banks and housing financiers on par with banks, housing finance companies' gross bad loans have gone up by 70 basis points (bps) even as their portfolio quality has improved.
However, key indices trimmed losses and were trading in green in afternoon deals, as traders found some solace with rating agency Icra stating that the government's ambitious production-linked incentive (PLI) scheme will look to unlock manufacturing capacity as well as support in attracting about Rs 4 lakh crore of capital expenditure over the next five years. But, key gauges failed to hold gains and ended lower.
Nifty futures opened at 17248.00 points against the previous close of 17290.20 and opened at a low of 17218.70 points. Nifty Future closed with an average movement of 169.30 points and a decline of around 5.30 points and 17284.90 points...!!
On the NSE, the midcap 100 index will decline 0.91% and smallcap 100 index is closing decline 1.06%. Speaking of various sectoral indices, the NSE saw gains in only Financial Services, Bnak and PVT Bank stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, February gold opened at Rs.50177, fell from a high of Rs.50274 points to a low of Rs.49829 with a decline of 429 points, a trend of around Rs.49963 and March Silver opened at Rs.63772, fell from a high of Rs.64060 points to a low of Rs.63350, with a decline of 236 points, a trend of around Rs.63625.
Meanwhile, Rating agency Icra has said that the government's ambitious production-linked incentive (PLI) scheme will look to unlock manufacturing capacity as well as support in attracting about Rs 4 lakh crore of capital expenditure over the next five years. With an aim to boost manufacturing, employment generation, import reduction and exports growth, the PLI scheme covers strategically significant sectors that have seen surging demand (solar, semiconductors/electronics, automobiles etc), and are critical to developing manufacturing capabilities (semiconductors, telecom gears, medical devices).
Rohit Ahuja, Head of Research and Outreach, Icra, said ‘Manufacturing capex forms around 20-25 per cent of the total capex in India currently. The PLI scheme, launched with the aim of incentivising manufacturing, is estimated to attract a capex of approximately Rs 4 lakh crore over the next five years.’ It has the potential to generate employment for millions (skilled and unskilled labour) in India. Also, incremental revenues of Rs 35-40 lakh crore are expected over the next five years due to a reduction in net imports. Sectors under which the PLI scheme has been announced currently constitute 40 per cent of the total imports.
Technically, the important key resistances are placed in Nifty future are at 17373 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 17404 – 17474 levels. Immediate support is placed at 17007 – 16808 levels.
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