Indian equity benchmarks failed
to sustain early gains and ended in red terrain on Monday, with Sensex and
Nifty 50 index surrendering their crucial 38,400 and 11,600 levels
respectively. Investor sentiment was largely battered by weak global cues,
along with a weak rupee and heavy selling pressure in FMCG, banking, automobile
and oil and gas stocks. Markets started the session on a positive note, as
sentiments remain buoyed with report
that India's economy grew at its fastest in over two years, propelled by
double-digit growth in manufacturing and robust consumer spending, making for a
strong start to the last financial year before the ruling party faces polls in
2019. Gross domestic product (GDP) expanded quicker than even the most
optimistic forecast at 8.2% in the First quarter of current financial year
(Q1FY19). GDP had grown 5.6% in the year earlier quarter and 7.7% in the March
quarter. Traders also took encouragement with Principal Economic Adviser in the
Ministry of Finance, Sanjeev Sanyal's statement that the growth rate will be
affected in next reading, but India would remain world's fastest-growing major
economy, as he countered scepticism over GDP growth rate. However, selling in
last leg of trade mainly played spoil sports for the frontline gauges and key
bourses took U-turn to end lower with a cut of around a percentage point.
Traders turned pessimistic on report that the Controller General of Accounts
(CGA) in its latest data has showed that the country's fiscal deficit in the
first four months of current financial year (FY19) came in at Rs 5,40,257 crore
or 86.5% of the FY19 Budget target. The country's fiscal deficit for FY19 is
budgeted at 3.3% of the GDP against the actual of 3.5% in FY18. Sentiments also
remain dampened with data showing that India's core sector output grew at a
slower pace of 6.6% in July 2018, from 7.6% in June 2018, on the back of sharp
decline in crude oil and natural gas production. Markets extended losses in
dying hour of trade with report showing that growth in India's manufacturing
sector unexpectedly slowed in August as domestic demand softened. Finally, the
BSE Sensex declined by 332.55 points or 0.86% to 38,312.52, while the CNX Nifty
was down by 98.15 points or 0.84% to 11,582.35.
The US markets were closed on
Monday on account of Labor Day holiday.
Crude oil futures were closed on
Monday on account of Labor Day holiday.
Continuing
its record closing low for the fourth straight day, Indian rupee ended weaker
against the Greenback on Monday, hurt by fresh demand for the American currency
from importers. The rupee sentiments were hit as business activity in Indian
manufacturing sector eased further in August 2018, for a second straight month
amid slower gains in output and new orders. As per the survey report, the
Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a composite
single-figure indicator of manufacturing performance - fell to 51.7 in August
from 52.3 in July. Sentiments also got spooked with former finance minister P
Chidambaram expressing scepticism over India's GDP growth prospects, saying it
would not be so favourable in third and fourth quarters, despite the GDP
growing at 8.2% in the current fiscal's first quarter. He said the country's
growth rate might decline in the third and fourth quarters and be the same as
that reported in the last fiscal. Besides, a sharp sell-off in the domestic
stock market largely led to weaker rupee sentiments. On the global front,
dollar was steady on Monday on worries of a prolonged China-US trade war and
after the United States and Canada ended contentious trade negotiations without
a deal. Finally, the rupee ended at 71.18, 18 paise weaker from its previous
close of 71.00 on Friday.
The FIIs as per Monday's data
were net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 6751.76 crore against gross selling of Rs 9652.26 crore, while
in the debt segment, the gross purchase was of Rs 487.46 crore with gross sales
of Rs 827.21 crore. Besides, in the hybrid segment, the gross selling was of Rs
0.70 crore against no buying.
The US markets remained closed on
Monday unable to give any clue to the other markets. Asian markets were trading
in negative territory on Tuesday as markets remained uncertain about the future
of the North American Free Trade Agreement (NAFTA) and a possible escalation of
the US-China trade war. Erasing all of their early gains, the Indian markets
ended lower on Monday, as selling pressure and weak global cues dragged the
indices below neutral lines. Moreover, sustained weakness in rupee also
dampened the sentiments. Today, the markets are likely to make a cautious start
amid weak global cues. There will be some cautiousness with a private report
that the Indian stock markets could tumble and the rupee may fall further ahead
of the general elections if a contentious KYC circular issued by the stock
market regulator is not scrapped soon. Traders will also be reacting to a
private report that a sustained weakness in the rupee may push the Reserve Bank
of India to further tighten monetary policy, perhaps as early as next month.
However, some respite can come with Fitch Ratings' statement that the currency
volatility will have only a limited impact on India's sovereign credit profile
as the country benefits from strong external finances. In a report on APAC
sovereigns, Fitch said the recent sell-offs in Indian and Indonesian currency
markets underline their sensitivity to shifts in global sentiment, and suggest
further bouts of pressure are likely as global monetary tightening progresses.
There will be some buzz in the banking sector stocks with India Ratings' report
that showing further traction for asset resolution, bad loans over Rs 4
trillion are expected to be resolved by 2018.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,582.35
|
11,515.90
|
11,700.30
|
BSE Sensex
|
38,312.52
|
38,076.90
|
38,741.24
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
261.38
|
339.05
|
334.83
|
345.63
|
Wipro
|
257.35
|
308.35
|
300.77
|
321.47
|
SBI
|
147.08
|
306.35
|
303.27
|
310.97
|
Tata Motors
|
145.98
|
266.60
|
263.57
|
271.32
|
ICICI Bank
|
128.59
|
334.15
|
329.80
|
341.25
|
Hero MotoCorp has sold 685,047 units of two-wheeler in the month of August 2018, registering a growth of 1% over the corresponding month of the previous fiscal when it sold 678,797 units.
HPCL will finalise 10 licensors, which the company needs for the upcoming Rs 43,130 crore project Barmer refinery in Rajasthan.
Eicher Motors' motorcycle division has reported 2% rise in sales at 69377 units in August 2018 as compared to 67977 motorcycles sold in August 2017.
Bajaj Auto has registered a rise of 30% in total sales to 437,092 units in August 2018 against 335,031 units in August 2017.