Bears continued to dominate Dalal
Street for seventh straight session on Thursday, with the Sensex and the Nifty
closing below their crucial psychological levels of 37,600 and 11,350,
respectively. The start of day was sluggish, as the Reserve Bank of India
warned of the growing risks to fiscal consolidation of the states as their
finances are saddled with farm loan waivers, income support schemes and the
Ujwal Discom Assurance Yojana (UDAY) bonds for their power distribution
companies. Adding more worries among traders, Former Finance Minister P
Chidambaram said that macro-economic indicators confirm that the Indian economy
has entered a disastrous phase of slowdown. He further said the Finance
Ministry's report is a damning indictment of the state of the economy in the country.
The street took a note of the statistics ministry's statement that an official
committee will examine the NSS technical report on services sector enterprises,
which has raised questions over the GDP data. Key equity benchmarks settled the
trading session in red terrain but staged some recovery in the last hour of the
trade, supported by IHS Markit's statement that the Reserve Bank of India (RBI)
is likely to cut interest rates one more time in June before rising inflation
pressures and elevated fiscal deficits leave little room for further
accommodation in rest of the year. RBI had cut interest rate by 25 basis points
each in February and April to boost economic growth. Markets participants also
got some relief with Secretary in the Department for Promotion of Industry and
Internal Trade (DPIIT) Ramesh Abhishek's statement that India is hoping to
further improve its rank in World Bank's Doing Business report this year
especially in indicators of paying taxes, insolvency resolution, trading across
borders, issue of building permits and starting a business. Finally, the BSE
Sensex slipped 230.22 points or 0.61% to 37,558.91, while the CNX Nifty was
down by 57.65 points or 0.51% to 11,301.80.
The US markets ended lower on
Thursday as trade tensions ramped up after US President Donald Trump threatened
tariff retaliation on China, which he claims broke the deal. Anxiety over the
prospect of a deepening trade dispute between the US and China has weighed on
stock markets all week. Those fears were compounded Wednesday when the
president accused the Chinese of negotiating in bad faith and reneging on
commitments made in previous rounds of negotiation. The White House has
threatened to raise tariffs on $200 billion in annual Chinese exports to the US
to 25% from the current 10% on Friday. However, downside remained capped after
Trump said a trade deal with China is still possible. Trump indicated he has
set a midnight deadline to reach a trade agreement, calling raising tariffs an
excellent alternative. On the economic front, the Commerce Department released
a report showing the US trade deficit widened in the month of March. The report
said the trade deficit widened to $50.0 billion in March from a revised $49.3
billion in February. Street had expected the deficit to widen to $50.2 billion.
The wider trade deficit came as the value of imports surged up by 1.1 percent
to $262.0 billion compared to a 1.0 percent jump in the value of exports to
$212.0 billion. The Labor Department also released a report showing producer
prices increased in line with Street estimates in the month of April. The
report said producer price index for final demand rose by 0.2 percent in April
after climbing by 0.6 percent in March. The uptick in prices matched
expectations. Besides, a separate Labor Department report showed first-time
claims for US unemployment benefits pulled back by less than expected in the
week ended May 4th. The Labor Department said initial jobless claims dipped to
228,000, a decrease of 2,000 from the previous week's unrevised level of
230,000. Street had expected jobless claims to drop to 220,000. Dow Jones
Industrial Average dropped 138.97 points or 0.54 percent to 25828.36, Nasdaq
declined 32.73 points or 0.41 percent to 7910.59 and S&P 500 was down by
8.70 points or 0.30 percent to 2870.72.
Crude oil futures ended lower on
Thursday as hopes for a US-China trade deal faded. Meanwhile, crude-oil
production by OPEC edged up by 30,000 barrels a day in April to 30.26 million
barrels a day. However, Brent crude ended marginally higher as traders continue
to keep watch on growing tensions between the US and Iran, which raises the
threat of disruptions to Middle East output. Besides, US natural-gas supplies
generally rose as expected last week. The Energy Information Administration
(EIA) reported that domestic supplies of natural gas climbed by 85 billion
cubic feet for the week ended May 3. Benchmark crude oil futures for June
declined 42 cents or 0.7 percent to settle at $61.70 a barrel on the New York
Mercantile Exchange. However, July Brent crude added 2 cents or 0.3 percent to
settle at $70.33 a barrel on London's Intercontinental Exchange.
Indian rupee continued to slip for the second consecutive
session against the US dollar on Thursday on increased demand for the greenback
from importers and banks. Traders remain worried with Former Finance Minister P
Chidambaram said that macro-economic indicators confirm that the Indian economy
has entered a disastrous phase of slowdown. He further said the Finance
Ministry's report is a damning indictment of the state of the economy in the
country. The weak trade in the local equity market also adversely impacted
local forex trade. Traders failed to get relief with Secretary in the
Department for Promotion of Industry and Internal Trade (DPIIT) Ramesh
Abhishek's statement that India is hoping to further improve its rank in World
Bank's Doing Business report this year especially in indicators of paying
taxes, insolvency resolution, trading across borders, issue of building permits
and starting a business. On the global front, Japanese yen surged to a 3-month
high against the dollar on Thursday as investors piled into the safe-haven
currency fearing that the U.S.-China trade conflict could escalate. Finally,
the rupee ended at 69.94, 23 paise weaker from its previous close of 69.71 on
Wednesday.
The FIIs as per Thursday'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 4997.39 crore against gross
selling of Rs 5765.11 crore, while in the debt segment, the gross purchase was
of Rs 1592.81 crore with gross sales of Rs 696.19 crore. Besides, in the hybrid
segment, the gross buying was of Rs 34.61 crore against gross selling of Rs
28.59 crore.
The US markets ended lower on
Thursday amid renewed trade concerns following tough talk from Trump ahead of
two days of US-China trade talks in Washington. Asian market traded mostly
higher in early deals on Friday despite increased US tariffs on Chinese goods
that were due to kick in later today. Falling for the seventh consecutive
session, Indian equity markets ended lower on Thursday amid escalating trade
tensions between the US and China.
Today, the start is likely to remain cautious as investors wait to see
if US President Donald Trump hikes tariff on Chinese imports. Investors will be
looking ahead to macroeconomic data such as Index of Industrial Production
(IIP) to be announced after the market hours. However, some support may come
later in day with Corporate Affairs Secretary Injeti Srinivas stating that the
corporate affairs ministry maintains a fairly reliable database that is not a
black box. He emphasized that it is up to statistical authorities to decide on which
data is representative for GDP calculation. Against the backdrop of concerns
over data used for calculating GDP numbers, he said that the ministry's MCA 21
portal is a trust-based system as the information reported there are company
disclosures. Meanwhile, India has sought greater access for agricultural and
animal husbandry products in Chinese market to boost exports and bridge trade
deficit with the neighbouring country. Traders may take note of a report that
the 15th Finance Commission will reconcile data from various public sources to
come up with its own conclusion of a reliable economic data. The real estate
stocks will keep buzzing on report that the GST Council extended by 10 days
till May 20 the deadline for realtors to opt for old GST rates with input tax
credit for ongoing projects or shift to new lower tax rates. The GST Council
had in March allowed real estate players to shift to 5 per cent GST rate for
residential units and 1 per cent for affordable housing without the benefit of
input tax credit (ITC) from April 1, 2019.
There will be some buzz in the Tea stocks on private report that India's
tea exports to Pakistan are expected to increase to 20-25 million kg in 2019
from 15.83 million kg in the previous year.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,301.80
|
11,252.03
|
11,354.58
|
BSE Sensex
|
37,558.91
|
37,382.72
|
37,757.78
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
886.54
|
170.30
|
160.73
|
175.63
|
ZEEL
|
371.72
|
357.90
|
341.58
|
368.43
|
Tata Motors
|
328.42
|
186.35
|
182.50
|
190.00
|
ICICI Bank
|
197.40
|
381.40
|
377.40
|
385.55
|
Reliance Industries
|
195.07
|
1,256.45
|
1,242.53
|
1,279.58
|
JSW Steel has reported Crude Steel production at 13.93 lakh tonnes for April 2019, registering a rise of 2% over corresponding month of previous year.
Maruti Suzuki India has reported 9.6% fall in its production to 147,669 vehicles in April 2019, as compared to 163,368 vehicles in April 2018.
Titan Company has reported a rise of 14.42% in its consolidated net profit at Rs 348.30 crore for Q4FY19 as compared to Rs 304.41 crore for Q4FY18.
L&T has bought shares worth about Rs 368 crore of Mindtree through open market transactions.