Bulls held onto gains for third
straight session on Wednesday, with key Indian equity benchmarks closing the
day with gains of over half a percent. Markets made a cheerful start, aided by
the Reserve Bank of India's (RBI) statement that it would infuse Rs 12,500
crore into the financial system on March 07, 2019. The purchase will be made
through open market operations (OMOs). The market participants remained
optimistic with the Union Minister for Finance and Corporate Affairs, Arun
Jaitley's statement that the Government is committed to facilitate trade and
industry in the country so that the momentum of the growth continues to
move-up. He also said that the process of reforms in case of direct and
indirect taxes will continue in order to facilitate and further expedite the
process of ease of doing business in the country. Adding some comfort, Commerce
Secretary Anup Wadhawan said that the US decision to withdraw duty benefits on
Indian products under the Generalized System of Preferences (GSP) programme
will not have a significant impact on exports to America. Key indices kept
their heads in positive territory during the whole day, amid reports that the
government introduced a scheme for providing financial assistance for transport
and marketing of agriculture products with a view to boosting export of farm
commodities to certain countries in Europe and North America. Traders took
support with the Federation of Indian Chambers of Commerce and Industry (FICCI)
President Sandip Somany's statement that the government has promised to lower
corporate tax rate to 25% for all companies once Goods and Services Tax (GST)
mop-up improves. Investors paid no heed towards the Centre for Monitoring
Indian Economy's (CMIE) latest report showing that the unemployment rate in
India rose to 7.2% in February 2019, the highest since September 2016, and up
from 5.9% in February 2018. The unemployment rate has climbed despite a fall in
the number of job seekers. Finally, the BSE Sensex surged 193.56 points or
0.53% to 36,636.10, while the CNX Nifty was up by 65.55 points or 0.60% to
11,053.00.
The US markets ended lower on
Wednesday after a US think tank said analysis of new satellite images of
activity at a North Korean long-range rocket site suggests Pyongyang may be
rapidly rebuilding the test facility that it pledged to dismantle. The Center
for Strategic and International Studies said the images were taken two days
after the second summit between President Donald Trump and North Korean leader
Kim Jong Un ended without an agreement late last month. The two leaders cut
short their discussions after Kim's request for a full withdrawal of sanctions
in return for the communist country's willingness to abandon nuclear weapons
was rejected. Further, traders also reacted negatively to a report from payroll
processor ADP showing US private sector job growth slowed in February after an
upwardly revised spike in January. ADP said private sector employment increased
by 183,000 jobs in February after soaring by an upwardly revised 300,000 jobs
in January. Meanwhile, a separate report from the Commerce Department showed
the US trade deficit widened by more than anticipated in December, as imports
jumped and exports slumped. The Commerce Department said the trade deficit
widened to $59.8 billion in December from a revised $50.3 billion in November.
Street had expected the deficit to widen to $57.9 billion. The substantial
monthly increase drove the US trade deficit to its highest level since reaching
$60.2 billion in October of 2008. The trade deficit for 2018 was also the
biggest since 2008, widening to $621.0 billion from $552.3 billion in 2017 as
Trump ramped up his trade war with China. Dow Jones Industrial Average slipped
133.17 points or 0.52 percent to 25673.46, S&P 500 declined 18.20 points or
0.65 percent to 2771.45 and Nasdaq was down by 70.44 points or 0.93 percent to
7505.92.
Crude oil futures ended lower on
Wednesday following a hefty weekly rise in domestic crude inventory. The Energy
Information Administration reported that US crude supplies rose by 7.1 million
barrels for the week ended March 01. That was well above the average climb of
1.9 million barrels expected by S&P Global Platts, but just under the 7.3
million barrel increase reported by the American Petroleum Institute data on
March 05. Though, the drop in gasoline supplies helped to offset pressure on
crude-oil prices - keeping them off their lows of the session. Supplies of
gasoline fell by 4.2 million barrels, while distillates edged down by 2.4
million barrels last week. Benchmark crude oil futures for April declined 34
cents or 0.6 percent to settle at $56.22 a barrel on the New York Mercantile
Exchange. However, May Brent crude gained 13 cents or 0.2 percent to settle at
$65.99 a barrel on London's Intercontinental Exchange.
Indian
rupee wiped out losses it incurred during the session and ended higher against
the American currency on Wednesday, due to increased selling of the American
currency by exporters and banks. This was the second consecutive sessions when
the rupee closed higher. The market participants remained optimistic with the
Union Minister for Finance and Corporate Affairs, Arun Jaitley's statement that
the Government is committed to facilitate trade and industry in the country so
that the momentum of the growth continues to move-up. Investors paid no heed
towards the Centre for Monitoring Indian Economy's (CMIE) latest report showing
that the unemployment rate in India rose to 7.2% in February 2019, the highest
since September 2016, and up from 5.9% in February 2018. The rupee's rise was
also aided by falling crude oil prices along with positive trend in equity
market. On the global front, dollar held gains against its peers on Wednesday,
thanks to higher US yields and better-than-expected data. Finally, the rupee
ended at 70.28, 21 paise stronger from its previous close of 70.49 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 5556.03 crore against gross selling of Rs 7425.59 crore, while
in the debt segment, the gross purchase was of Rs 1693.31 crore with gross
sales of Rs 2046.36 crore. Besides, in the hybrid segment, the gross buying was
of Rs 5.26 crore against gross selling of Rs 6.71 crore.
The US markets ended in red
territory on Wednesday as investors stayed on the sidelines, awaiting fresh
developments on trade. Asian markets are trading mostly lower on Thursday as
global growth concerns resurfaced and investors also awaited some kind of
resolution to Sino-US trade negotiations. Extending northward journey for third
straight session, Indian markets ended higher with gains for over half a
percent on Wednesday on sustained buying mainly in finance, energy and metal
counters. Today, the markets are likely to make a cautious start, tracking weak
cues from global markets amid growth concerns. The Organisation for Economic
Co-operation and Development (OECD) has lowered its 2019 forecast for global
economic growth to 3.3 per cent for this year, down from the 3.5 per cent it
predicted in November, which was itself a downgrade from a previous 3.7 per
cent. It added that high policy uncertainty, ongoing trade tensions, and a
further erosion of business and consumer confidence are all contributing to the
slowdown. On the domestic front, traders will be cautious with a private report
stating that the likelihood of Indian GDP growth coming at below 7 per cent in
2019-20 is very high despite aiding factors like low oil prices and an
expansionary budget. It added that global slowdown, tight financial conditions
and political uncertainty in the election year will be the biggest headwinds
for growth. However, traders may get some support later in the day with report
that the income tax (I-T) department has notified the modified norms for
startups to enable them to seek angel tax exemption for investments of up to Rs
25 crore. The modified norms, which are aimed at encouraging budding
entrepreneurs, will be effective retrospectively from February 19, when the
Department for Promotion of Industry and Internal Trade (DPIIT) relaxed the
norms for startups. Meanwhile, India is exploring various options, including
approaching the WTO dispute body, to deal with the US decision to withdraw
import incentives for about 2,000 domestic goods under the trade preference
scheme. There will be some reaction in wind energy sector stocks with Crisil
Research's report that the country's wind energy sector is likely to see a slow
growth with regard to capacity addition over the next five years. It added that
the shift to a competitive bidding mechanism has slowed industry growth due to
a significant fall in tariffs, triggering a decline in both bid response and
profitability for original equipment manufacturers (OEMs).
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,053.00
|
11,013.80
|
11,077.25
|
BSE Sensex
|
36,636.10
|
36,506.46
|
36,716.11
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ICICI Bank
|
314.36
|
371.95
|
367.18
|
374.78
|
Yes Bank
|
246.59
|
235.30
|
231.95
|
239.65
|
Tata Motors
|
224.69
|
188.80
|
185.90
|
193.55
|
SBI
|
221.61
|
278.10
|
275.52
|
281.62
|
Wipro
|
215.07
|
277.45
|
271.73
|
284.53
|
Cipla and its subsidiary Cipla USA, Inc., will launch a phase of generic Cinacalcet hydrochloride tablets in the USA.
ITC has increased the price of three brands - Bristol, Flake Excel and Capstan by about 7 percent to 14 percent.
Tata Motors has unveiled four products, including premium hatchback Altroz and a concept version of small SUV H2X, at the Geneva Motor show.
Bharti Airtel has made deferred payment of over Rs 1,918 crore to the department of Telecom towards its spectrum dues.