Indian equity benchmarks ended
the sluggish day of trade with a cut of over half a percent on Monday on
geopolitical tensions surrounding around North Korea after its latest hydrogen
bomb test. Markets started the session on pessimistic note and extended their
fall later on after the country's former central bank head Raghuram Rajan
cautioned the government that short-term costs of a radical ban of high-value
currency notes would outweigh the long-term benefits. Report that India's total
public debt (excluding liabilities under the public account) increased by 3.6
percent to Rs 63.35 lakh crore at the end of June 2017, too dampened
sentiments. The debt of the government was Rs 61.13 lakh crore at the end of
March 2017. According to the report on debt management released by the finance
ministry, this indicated a quarter-on-quarter rise of 3.6 percent in Q1 FY18 as
compared to a decline of 1.15 percent in the previous quarter (Q4 FY17).
Sentiments also weighed on by foreign brokerage report that investment
continued to slip to 27.5 percent of GDP, from 29.2 percent in June 2016, with
high lending rates dampening demand and sustaining excess capacity. It added
that lending rate cuts are key to economic growth recovery and banks should
lower rates by 25 bps before the start of the busy season in October to
accelerate reforms momentum. Separately, another global brokerage firm lowered
India's GDP growth forecast to 6.6 percent for this fiscal from 7.2 percent earlier.
The brokerage said that the growth is expected to pick up in coming quarters as
the economy normalizes post implementation of the GST. According to official
data, India's economic growth slipped to a three-year low of 5.7 percent in
April-June as disruptions caused by demonetization spilled over to the third
straight quarter amid a slowdown in manufacturing activities. Finally, the BSE
Sensex lost 189.98 points or 0.60% to 31,702.25, while the CNX Nifty was down
by 61.55 points or 0.62% to 9,912.85.
The US markets remained closed on
Monday on account of 'Labor Day' holiday.
Crude oil futures moved higher in
holiday thinned trade on Monday, as the floor trading was closed on account of Labor Day.
Traders got some support with refinery activity slowly resuming on the Gulf
Coast, although they were still trying to assess the long term damage of
Hurricane Harvey on the U.S. petroleum industry. Investors also closely followed developments
in the US-North Korea standoff. Benchmark crude oil futures for October
delivery last traded up by $0.29 or 0.61 percent to $47.58 on the New York
Mercantile Exchange. In London, Brent crude for October delivery ended down by
0.20 cent at $52.55 a barrel on the ICE.
Indian
rupee pared some of its early losses but still ended marginally weaker against
the American currency on Monday, due to fresh dollar demand from banks and
importers amid foreign fund outflows. Sentiments remained dampened as foreign
brokerage reported that investment continued to slip to 27.5 percent of GDP,
from 29.2 percent in June 2016, with high lending rates dampening demand and
sustaining excess capacity. Besides, massive losses of domestic equity markets
too affected the rupee, but a weak dollar overseas kept the fall to a minimum.
On the global front, dollar fell against Japanese yen on Monday as concerns
about geopolitical risks following North Korea's latest nuclear test over the weekend
prompted a rush to traditional currency hedges. Finally, the rupee ended at
64.05, 2 paise weaker from its previous close of 64.03 on Friday.
The
FIIs as per Monday's data were net sellers in equity segment, while they were
net buyers in debt segment. In equity segment, the gross buying was of Rs
3193.04 crore against gross selling of Rs 3938.49 crore, while in the debt
segment, the gross purchase was of Rs 396.70 crore with gross sales of Rs
334.62 crore.
The US markets remained closed in
the last session on account of Labor Day, unable to give any cues to the other
markets. The Asian markets have once again made mostly a lower start on the
Korean threat to the markets. The Japanese market was once again down by over
half a percent as the yen and gold extended gains and traders awaited further
developments on the North Korea front. The Indian markets snapped their gaining
streak in last session on heightened geopolitical tensions between the U.S. and
North Korea, which dented risk sentiment leading traders to safe heaven. Today,
the start is likely to remain cautious though a tinge of green will be seen at
the opening. Traders will be getting some support with Prime Minister Narendra
Modi's statement at BRICS Summit 2017 that India is fast changing into one of
the most open economies in the world, with improvements on global indices and
the biggest ever reform GST weaving the nation into one unified market.
However, there will be some cautiousness too, as the domestic rating agency
Crisil has lowered its growth forecast to 7 per cent for fiscal 2018, down from
7.4 per cent earlier, as it sees disruptions arising from the implementation of
the new uniform tax regime to continue to impact the economy for a few more
quarters. Meanwhile, the former RBI governor Raghuram Rajan has said that
short-term note ban costs will outweigh long-term benefits. There will be some
buzz in the realty stocks, as the new Minister for Housing and Urban Affairs,
Hardeep Singh Puri, has said that the government will meet the targets that
have been instituted. There will be some action in the gold and jewellary
stocks too, as India's gold imports in August nearly tripled from a year ago,
despite sluggish domestic demand.
Support and Resistance: NSE (Nifty) and BSE
(Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9912.85
|
9853.10
|
9980.50
|
BSE Sensex
|
31702.25
|
31530.98
|
31902.86
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
Hindalco
|
112.83
|
242.45
|
237.67
|
247.12
|
Bank of Baroda
|
104.76
|
136.80
|
135.32
|
138.77
|
Vedanta
|
92.68
|
315.80
|
309.80
|
320.40
|
ITC
|
84.81
|
283.10
|
282.12
|
283.97
|
Tata Motors
|
84.34
|
383.40
|
377.25
|
392.80
|
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