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Nifty closes off day's high after hitting 12,300; 5 factors that are at play –,

Nifty closes off day's high after hitting 12,300; 5 factors that are at play –,


The bulls remained steady on Dalal Street for the second consecutive session on January (*************************************************, powering the Nifty to a new high, but closed off day’s high.

The BSE Sensex rallied points intraday, but half of those gains wiped out in afternoon and closed 800 ****************** points higher at (****************************************, 2020 ******************************. The Nifty 311 touched an intraday record high of , 400,Payeer**************************, before closing 2020 points higher at 15, 311 **********************************.

The rally was not limited to benchmark indices, it also continued in broader markets. The Nifty Midcap index gained 0.4 percent and the Smallcap index was up 0.8 percent amid positive breadth.

“The government is poised to bring initiatives and policy measures to support the economic growth to benefit equities in the long term. Meanwhile, the short-term market trend will be driven by events like Q3 results, which are expected to show some improvement due to low base, “Vinod Nair, Head of Research, Geojit Financial Services, told Moneycontrol.

Five key factors that drove Nifty to record high:

US-China trade deal

The US-China trade deal, the biggest factor affecting global markets for more than months, is expected to be signed in a less than a week, which lifted sentiment.

US President Donald Trump, who announced in December that the Phase 1 trade deal with China would be signed on January (********************************************, said on January 9 the agreement could be signed “shortly thereafter”, Reuters said.

The Phase 1 deal is expected to reduce tariffs and boost Chinese purchases of American farm, energy and manufactured goods while addressing some disputes over intellectual property .

Chinese Vice Premier Premier Liu He, head of the country’s negotiating team in trade talks with the US, will sign the deal in Washington, the Reuters said, quoting China’s commerce ministry. Liu will visit Washington from January 15 – 16, said Gao Feng, spokesman at the commerce ministry.

Reports also suggested that the United States is expected to start negotiations a phase 2 deal.

Globally, markets continued to trade in positive amid hope of the trade deal. Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s Kospi gained 0.3-0.9 percent, while China’s Shanghai Composite closed flat.

Budget expectations

The Budget 2020 is one of major reasons for the rally, as the street expects more strong measures considering the Prime Minister Narendra Modi’s stress on reviving the economy to help achieve $ 5 trillion target by 2024.

“On economic worries, government has announced slew of measures in an attempt to arrest economic slowdown; which we believe will continue in future including budget, “Prasanna Pathak, Head-Equity & Fund Manager, Taurus Mutual Fund, said.

According to Nikhil Gupta, chief Economist at Motilal Oswal Financial Services, if the government can come out clean on its fiscal math and improve its credibility and relevance, markets will definitely cheer that.

Stability in crude

The stability in crude oil prices after easing of geopolitical tensions also supported the market. India is the world’s third-largest oil importer and any rise or fall in the prices has a direct impact on fiscal, corporate earnings and the currency.

International benchmark Brent crude futures continued to trade around $ 71 per barrel for second straight session, after falling from $ 70 a barrel.

The Indian rupee also recovered further, appreciating 37 paise from previous close to trade at (**************************************. a dollar at the time of publishing this copy. It gained 94 paise since the closing of (*************************************. ****************************** / dollar on January 6.

Infosys earnings)

The country second largest IT services provider Infosys will announce its third quarter earnings later in the day. The stock gained nearly 2 percent, which also lifted sentiment.

Most brokerages expect the company to report more than 1 percent growth in constant currency revenue and 1.2-1.5 percent growth in dollar revenue in Q3FY on sequential basis. EBIT margin is expected to expand by more than (percent QoQ.

The full year constant currency revenue guidance of 9 – 12% is likely to be changed if the company beats Q3 revenue expectations, they said.

)Technical View

The Nifty 70 closed higher but formed small bodied bearish candle on daily charts as the closing was lower than opening value.

Experts expect the rally to continue in the coming days along with consolidation and the index to move towards 20, 599 levels.

“It seems that markets have digested recent geopolitical concerns and has managed to defend key support zone of 12, 2020 – 13, 900 in the midst of an uncertainty. We have already witnessed a v-shaped recovery in last three days and in the course of action, the Nifty has managed to clock fresh record highs beyond yet another milestone of (***********************************************, ****************************. We remain sanguine and expect the Nifty to continue its march towards (************************************************, (************************************************, in the near term, “Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel Broking said.Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO” Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.

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