Bears took full control over
Dalal Street on Monday, with frontline gauges settling below their crucial
34,800 (Sensex) and 10,700 (Nifty) levels, as traders opted to stay away from
risky assets ahead of Reserve Bank of India's (RBI's) monetary policy meeting
to be start from tomorrow. Markets, after a gap-down start, traded with
pessimism throughout the session, as traders remained concerned that Union
Budget could push up inflation and prompt the central bank to raise interest
rates soon. sentiments also remained dampened with Fitch Ratings' statement
that high debt burden of the government constrains India's rating upgrade,
after Finance Minister Arun Jaitley projecting a fiscal deficit of 3.5 per cent
of GDP against the earlier target of 3.2 per cent. Besides, the US-based agency
had kept India's sovereign rating unchanged at BBB-, the lowest investment
grade with stable outlook, citing weak fiscal position. Traders failed to get
any sense of relief with report that the Indian service sector remained in
expansion mode in January, registering the fastest rise in activity in three
months driven by a renewed increase in new business orders. The seasonally
adjusted Nikkei Services Business Activity Index improved to 51.7 in January,
up from 50.9 in December. Traders took note of industry body ASSOCHAM's report
stating that the RBI should not over-react to high yield pressures in the bond
market and should refrain from hiking interest rates in its next monetary
policy review outcome on February 7. ASSOCHAM enlightened in a post-Budget
paper that some of the macro indicators, including pegging of higher fiscal
deficit of 3.3% for 2018-2019 and 3.5% of the GDP for the current fiscal, look
difficult, but reaction of the bond market would ease out soon. Meanwhile, DEA
Secretary Subhash Chandra Garg said that achieving a double-digit economic
growth for India in current global scenario is difficult but the country is on
path to clock 8% plus expansion by 2020-21. Garg added that achieving double
digit growth is difficult as the growth in the global economy is not that high.
Finally, the BSE Sensex tumbled 309.59 points or 0.88% to 34,757.16, while the
CNX Nifty was down by 94.05 points or 0.87% to 10,666.55.
The US markets tumbled on Monday,
with the Dow recording its worst one-day point drop in history, in a selloff
that at times took on the characteristics of a panic. The Dow was down more
than 1,500 points at its session low, while the S&P 500 logged its first 5%
pullback from its all-time high in over a year. The financial sector was the
biggest loser, tanking 5%, followed by health care, industrials, energy,
telecommunications, and information technology which all fell more than 4%.
Monday's sell-off was driven by firms moving to sell stocks to put more money
into assets such as bonds which benefit from higher rates. On the economy
front, a survey that tracks the performance of service-oriented companies such
as hotels, restaurants and banks surged in January to a 13-year high of 59.9.
Employment activity set a record. An index that measures current staffing and
future hiring plans rose to an all-time high of 61.6 from 56.3 in the prior
month. That's the highest level since the ISM services index began in 1997. The
new orders index also jumped 8.2 points to 62.7, the highest level since 2011.
Fifteen of the 17 industries tracked by ISM said their businesses expanded in
January. The Dow Jones Industrial Average lost 1,175.21 points or 4.60 percent
to 24,345.75, the Nasdaq dropped 273.42 points or 3.78 percent to 6,967.53, the
S&P 500 edged lower by 113.19 points or 4.10 percent to 2,648.94.
Extending previous session's
fall, crude oil futures ended lower on Monday along with global stocks, as the
U.S. dollar rallied on expectations of interest rate hikes. Data showing
another increase in the U.S. rig count too weighed on prices. The number of
active U.S. rigs drilling for oil climbed by 6 at 765 last week. On the
economic front, the U.S. ISM services index hit its highest level since
mid-2005, a sign of further strength in the nation's economy. Economic activity
in the non-manufacturing sector grew in January for the 96th consecutive month,
according to a survey of purchasing managers. Benchmark crude oil futures for
March delivery declined $1.42 at $64.03 a barrel on the New York Mercantile
Exchange. Brent crude lost 68 cents or 1% to $67.91 a barrel on London's
Intercontinental Exchange.
Indian
rupee ended unchanged on Monday compared to its previous close as investors
remained cautious ahead of Reserve Bank of India's (RBI's) monetary policy
meeting to be start from tomorrow. Traders also remained pessimistic with Fitch
Ratings' statement that high debt burden of the government constrains India's
rating upgrade, after Finance Minister Arun Jaitley projected a fiscal deficit
of 3.5 percent of GDP against the earlier target of 3.2 percent. Meanwhile,
Arun Jaitley said that the economy has entered into a phase of consolidation
after a series of structural reforms which were initiated in the past two
years. On the global front, US dollar paused on Monday after rebounding at the
end of last week, when a strong jobs report suggested the currency's weakness
might have gone too far, too fast. Finally, the rupee ended unchanged from its
previous close of 64.06 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 8286.24 crore against gross selling of Rs 6996.34 crore, while
in the debt segment, the gross purchase was of Rs 1318.12 crore with gross
sales of Rs 585.40 crore. Besides, in the hybrid segment, the gross buying was
of Rs 4.87 crore against gross selling of Rs 0.14 crore.
U.S. stocks suffered sharp
sell-off on Monday, as markets continued to throw a tantrum over rising
interest rates. The sell-off overshadowed any corporate headlines. Markets also
ignored some upbeat economic news. Asian markets were trading with severe cut after
Wall Street suffered its biggest decline since 2011 as investors' faith in
factors underpinning a bull run in markets began to crumble. Indian shares fell
for a fifth consecutive session on Monday tracking weak cues from global
markets, after a strong U.S. jobs report for January helped fuel expectations
that the Federal Reserve will lift borrowing costs more than the three times
initially expected this year. Today, the start is likely to be on the negative
side amid weak global cues. Traders will also look ahead to the RBI's policy
review meeting to start later in the day amid expectations that the central
bank will tighten its monetary policy stance in the wake of growing concerns
over fiscal slippage. Investors may remain concern on private report that lower
indirect tax revenue collections may outweigh any upside risks from higher
nominal GDP growth, non-tax revenue and direct tax collection. Meanwhile, Finance
Secretary Hasmukh Adhia said that while implementing GST, the government has
sacrificed revenue in the hope that compliance would improve in the future. He
said, the organised sector has gained in the process and the improvement is
evident in companies' balance sheets. Market participants may get some relief with
Finance Minister Arun Jaitley's statement that expediting public services and
ensuring fairness in procurement will supplement rapid economic growth in the
South Asian region including India. Sugar stocks will remain in focus after the
food ministry has proposed doubling of the import duty on sugar to 100 per cent
to curb cheaper imports, check falling wholesale prices of sweetener and ensure
timely payment to cane farmers. There will be lots of important earnings
announcements too, to keep the markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,666.55
|
10601.32
|
10717.27
|
BSE Sensex
|
34757.16
|
34560.58
|
34913.95
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
ITC
|
197.06
|
279.25
|
273.50
|
283.35
|
SBI
|
189.41
|
298.05
|
291.90
|
302.30
|
ICICI Bank
|
173.40
|
329.70
|
326.42
|
333.62
|
Bharti Airtel
|
135.91
|
440.20
|
418.68
|
454.23
|
Yes Bank
|
134.07
|
343.60
|
335.13
|
350.53
|
Reliance Industries is planning to invest Rs 2,500 crore in Assam in various sectors, including retail, petroleum, telecom, tourism and sports.
IOC is planning to invest Rs 3,400 crore in Assam over the next five years to expand its operations by setting up new units as well as upgrading the existing ones.
Tata Steel will be investing over 14 million pounds in its Hot Strip Mill at Port Talbot in south Wales, which will help manufacture higher-value steels.
Tata Motors has reported around 13-fold jump in its consolidated net profit at Rs 1,198.63 crore for Q3FY18 as compared to Rs 93.77 crore for Q3FY17.