Market may rise after recent sharp sell-off

Market may edge higher in early trade tracking positive global stocks after a huge sell-off. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could gain 119.50 points at the opening bell.

Overseas, Asian stocks edged higher after positive closing on Wall Street. US stocks closed on a higher note yesterday, 6 February 2018, albeit with wild swings witnessed during the day's trading, after two huge sell-offs in a row. The wild moves were attributed to a combination of factors like interest-rate fears, computer-driven trading and the obscure volatility funds that use leverage.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 2326.10 crore yesterday, 6 February 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1699.74 crore yesterday, 6 February 2018, as per provisional data.

Among corporate news, Hero MotoCorp's net profit rose 4.3% to Rs 805.43 crore on 14.8% growth in net sales to Rs 7305.49 crore in Q3 December 2017 over Q3 December 2016. The result was announced after market hours yesterday, 6 February 2018.

Hero MotoCorp's chairman, managing director and chief executive officer, Pawan Munjal, said that the company grew on all key performance parameters including revenue, PAT and earnings before interest, taxes, depreciation and amortization (EBITDA) during the quarter, bucking the severe headwinds on the commodities front. With an enhanced focus on the premium segment and scooters, the company is confident of carrying the growth momentum forward, Munjal added.

Aurobindo Pharma, Cipla and Eicher Motors are scheduled to announce October-December 2017 quarterly results today, 7 February 2018.

On the macro front, the Reserve Bank of India's (RBI) two-day Monetary Policy Committee (MPC) meeting concludes later today, 7 February 2018 for the sixth bi-monthly monetary policy statement for 2017-18. The central bank is likely to keep its policy rate on hold, but could toughen its warnings against inflation. The MPC is expected to tilt towards a hawkish tone from its neutral tone following higher fiscal targets, oil price increases and higher minimum support prices (MSP) for crops.

The stock market registered sharp losses yesterday, 6 February 2018 amid global sell-off and in the aftermath of the introduction of the long-term capital gains (LTCG) tax on equities exceeding Rs 1 lakh at 10% in the Budget 2018 unveiled on 1 February 2018. The Sensex had fallen 561.22 points or 1.61% to settle at 34,195.94, its lowest closing level since 5 January 2018.

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