Last hour recovery helped the key
Indian equity benchmarks to close Monday's trading session in positive
territory. The bourses made a negative start, impacted by Moody's Investors
Service's statement that the government will find it difficult to meet the
fiscal deficit target of 3.4% in 2019-20 on account of higher spending and low
revenue growth. Observing that Indian government's debt is stubbornly high as a
percentage of GDP, Moody's said it could be brought down only if the Centre
sticks to the fiscal consolidation path. The markets participants were nervous,
amid reports that the government has reduced the allocation for Startup India programme
in the Budget 2019-20 but added more monies to the Make in India kitty.
According to the budget documents, the allocation for Startup India programme
has been slashed to Rs 25 crore for 2019-20 from the revised estimate of Rs 28
crore in 2018-19. Sentiments also got hit with a private report stating that
public sector investments are expected to grow at a much slower pace in
2019-20, as capital outlay by public sector enterprises is expected to remain
at almost the same level as 2018-19, while capital spending by the Centre is
budgeted to grow at a much slower pace next year. The trade remained lackluster
for the most part of the session, as Fitch Solutions, the research arm of Fitch
Group, also projected the government's fiscal deficit to overshoot the budgeted
target by 0.2 percent to 3.6 percent of GDP in 2019-20 fiscal. It said that
2019-20 Budget appears to show a strong populist bent in the run up to the
General election due by May 2019. Adding anxiety among the investors, the
commerce and industry ministry data showed that foreign direct investment (FDI)
into India has declined 11 percent to $ 22.66 billion during April-September
period of the current fiscal. The foreign fund inflows during April-September
2017-18 stood at $ 25.35 billion. However, in the last leg of the trade, the
key indices recovered from losses to end higher, supported by Federation of
Indian Export Organisations (FIEO) President Ganesh Kumar Gupta's statement
that the new online National Logistics Portal (NLP) and forthcoming national
policy would help boost India's export growth. Finally, the BSE Sensex gained
113.31 points or 0.31% to 36,582.74, while the CNX Nifty was up by 18.60 points
or 0.17% to 10,912.25.
The US markets settled higher on
Monday, with Nasdaq ending higher over one percent, as investors looked ahead
to another week of high-profile earnings and developments in US-China trade
talks. Stocks continue to benefit from a dovish Federal Reserve after the
central bank last week signaled rate increases were on hold until further
notice. US-China trade talks will remain in focus as a March 1 deadline to
avoid an increase on tariffs on Chinese imports looms. Upbeat comments by US
and Chinese have been credited with supporting stocks. Besides, markets
continued to benefit from recent upward momentum as well as the positive
sentiment generated by last Friday's monthly employment report showing much
stronger than expected job growth in the month of January. On the economic
front, reflecting a steep drop in orders for non-durable goods, the Commerce
Department released a report showing new orders for US manufactured goods
unexpectedly decreased in the month of November. The Commerce Department said
factory orders fell by 0.6 percent in November after jumping by 2.1 percent in
October. The unexpected drop in factory orders came as orders for non-durable
goods slumped by 1.9 percent in November after inching up by 0.1 percent in the
previous month. Meanwhile, the report said durable goods orders climbed by 0.7
percent in November after plummeting by 4.3 percent in October. Orders for
transportation equipment led the rebound, surging up by 3.0 percent in November
after plunging by 12.4 percent in October. Dow Jones Industrial Average surged
175.48 points or 0.70 percent to 25239.37, S&P 500 gained 18.34 points or
0.68 percent to 2724.87 and Nasdaq was up by 83.67 points or 1.15 percent to
7347.54.
Crude oil futures ended lower on
Monday after briefly touching their highest intraday levels of the year, with
prices giving up some of the gains they scored last week as concerns over a
potential slowdown in energy demand resurfaced. Demand concerns were reignited
following the release of surprisingly weak Chinese and US economic data, and as
a result, futures gave back all of last week's gains. Surprisingly soft Chinese
General Services PMI for January released overnight, which showed the Composite
level dip to 50.9 from 52.2 in December. Benchmark crude oil futures for March
declined 70 cents or 1.3 percent to settle $54.56 a barrel on the New York
Mercantile Exchange. April Brent crude fell 24 cents or 0.4 percent to settle
at $62.51 a barrel on London's Intercontinental Exchange.
Indian
rupee ended considerably weaker against the US dollar on Monday, on fresh bouts
of dollar demand from importers. The rupee came under pressure due to extremely
bullish dollar sentiment overseas.
Market participants also remained worried on Moody's Investors Service's
statement that the government will find it difficult to meet the fiscal deficit
target of 3.4% in 2019-20 on account of higher spending and low revenue growth.
Observing that Indian government's debt is stubbornly high as a percentage of
GDP, Moody's said it could be brought down only if the Centre sticks to the
fiscal consolidation path. Adding anxiety among the investors, the commerce and
industry ministry data showed that FDI into India has declined 11 percent to $
22.66 billion during April-September period of the current fiscal. On the
global front, dollar edged higher on Monday, breaking a two-week losing streak
as strong US jobs data propped up the greenback in a market broadly cautious on
the outlook for risky assets. Finally, the rupee ended at 71.80, 55 paise
weaker from its previous close of 71.25 on Friday.
The FIIs as per Monday's data
were net buyers in equity and debt segments both. In equity segment, the gross
buying was of Rs 7172.82 crore against gross selling of Rs 5966.15 crore, while
in the debt segment, the gross purchase was of Rs 1153.95 crore with gross
sales of Rs 672.41 crore. Besides, in the hybrid segment, the gross selling was
of Rs 0.28 crore against no buying.
The US markets rose on Monday,
led by the technology sector, as investors awaited another busy week of
corporate earnings reports and economic data. The Japanese stock market is
trading in red on Tuesday, while most of the other Asian markets are closed for
the Lunar New Year holiday. Extending gains for third straight session, Indian
markets settled higher on Monday, led by gains in heavyweight Reliance
Industries. Today, the markets are likely to make slightly positive start
tacking overnight gains on Wall Street. Traders will be looking ahead to the
six-member Monetary Policy Committee (MPC) headed by Reserve Bank of Indian
(RBI) Governor Shaktikanta Das three-day meet to be start on February 05 and
announce the policy on February 07. Traders will be getting encouragement with
Union Commerce Secretary Anup Wadhawan's statement that the country's exports
in the current fiscal year are expected to surpass the earlier peak of $314
billion in 2013-14. He added that the achievement comes against the backdrop of
a very challenging global environment. Meanwhile, the government has decided to
form a small working group to look into the issue of angel tax being faced by
startups and come out with a workable solution in 4-5 days. However, there may
be some cautiousness with the government data showing that fiscal deficit
touched 112.4% of the full-year budget target of Rs 6.24 lakh crore at the end
of December on account of lower revenue collections. The fiscal deficit, or gap
between Government's expenditure and revenue, stood at Rs 7.01 lakh crore
during April-December of the current financial year which ends in March.
Traders may take note of a SBI research report stating that the RBI may cut key
lending rate by 0.25 percent later this week in view of benign inflation. They
expect RBI to change its stance in February, but it is likely to remain on a
pause mode. The first cut might happen in April 2019, but they believe it will
be shallow rate cut cycle. There will be some buzz in the telecom sector stocks
with report that telecom firms, barring Reliance Jio, have asked the government
to waive GST on spectrum payments and other levies, while adjusting accumulated
tax credits of Rs 35,000 crore in the pending payments. There will be some
reaction in sugar industry stocks with Indian Sugar Mills Association (ISMA)
stating that sugar production rose 8% to 185 lakh tonnes in the first four
months of this marketing year ending September, while cautioning that cane
arrears to farmers could reach very uncomfortable levels.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,912.25
|
10,841.63
|
10,955.38
|
BSE Sensex
|
36,582.74
|
36,331.22
|
36,728.51
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
607.72
|
179.80
|
175.37
|
184.47
|
ZEEL
|
250.98
|
347.75
|
330.58
|
363.43
|
Vedanta
|
245.79
|
161.35
|
156.90
|
165.40
|
SBI
|
206.43
|
283.95
|
279.47
|
286.82
|
ICICI Bank
|
170.39
|
354.55
|
348.07
|
358.97
|
Hero MotoCorp has reported sales of 582,756 units for the month of January 2019.
SBI has signed a MoU with MG Motor India to provide wholesale inventory finance to MG Motor dealers through bank's technologically-advanced electronic lending product.
Bajaj Auto has registered a rise of 15% in total sales to 407,150 units in January 2019 against 353,147 units in January 2018.
HCL Technologies has opened a new office in The Hague, expanding its presence in the Netherlands.