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NSE Intra-day chart (10 October 2019)
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Market Commentary 11 October 2019
Markets likely to get a positive start; Infosys result eyed

 

Bears gripped Dalal Street on Thursday, with Sensex and Nifty ending the trading session lower by around 300 and 80 points, respectively. Markets made a negative start of the day, as International Monetary Fund (IMF) chief Kristalina Georgieva said that the largest emerging market economies like India are facing an even more pronounced effect of the global downturn. The street remained pessimistic with a private report that a workforce analysis of listed companies reveals that the job loss in public sector was one of the worst in the recent times. In contrast to an increase of 9.2 per cent headcount in private sector, the public sector saw a decline of 2.6 per cent in FY19. Key indices extended their losses in the second half of the session, after International rating agency Moody's Investors Service in its latest report cut India's gross domestic product (GDP) growth forecast to 5.8 per cent for the current fiscal year (FY20) from 6.8 per cent in FY19, but it expects GDP to pick up to 6.6 per cent in FY21 and around 7 per cent over the medium term. Adding more worries among market participants, the World Bank said that Asia Pacific economies are expected to slow this year due to uncertainty around US-China trade tensions and slowdowns in major global economies could further hurt the region's exports. Finally, the BSE Sensex lost 297.55 points or 0.78% to 37,880.40, while the CNX Nifty was down by 78.75 points or 0.70% to 11,234.55.

 

Extending their previous session's gains, the US markets ended higher on Thursday after President Donald Trump revealed that he plans to meet with Chinese Vice Premier Liu He as part of high-level US-China trade talks. The said from Trump offset concerns generated by reports suggesting Liu could leave Washington earlier than originally planned. Adding to the positive sentiment, Liu said the Chinese delegation has come to the talks with great sincerity and is willing to make serious exchanges with the US on issues of common concern. Liu said on the basis of equality and mutual respect, China is willing to reach consensus with the US through this round of consultations on issues of mutual concern to prevent further escalation and spread of friction. On the economic front, consumer prices in the US were essentially flat in the month of September, according to a report released by the Labor Department, with higher prices for shelter and food offset by declines in prices for energy and used cars and trucks. The Labor Department said its consumer price index was unchanged in September after inching up by 0.1 percent in August. Street had expected another 0.1 percent uptick. Energy prices extended the steep drop seen in the previous month, tumbling by 1.4 percent in September after plunging by 1.9 percent in August. Gasoline prices led the way lower once again. Besides, a report released by the Labor Department showed a modest decrease in first-time claims for US unemployment benefits in the week ended October 5. The report said initial jobless claims dropped to 210,000, a decrease of 10,000 from the previous week's revised level of 220,000. Street had expected jobless claims to come in unchanged compared to the 219,000 originally reported for the previous week.

 

Crude oil futures ended higher on Thursday as Organization of the Petroleum Exporting Countries (OPEC) said that it has all options in place to balance oil markets and that it would take a decision in December regarding supply. OPEC's Secretary General Mohammad Barkindo said the meeting between OPEC and allies, including Russia would take decisions that will set the path of heightened and sustained stability for 2020. Besides, oil prices were also supported by easing concerns about the outlook for energy demand thanks to rising optimism about high-level US-China trade negotiations. President Donald Trump said that he plans to meet with Chinese Vice Premier Liu He on Friday. Benchmark crude oil futures for November rose 96 cents or 1.8 percent to settle at $53.55 a barrel on the New York Mercantile Exchange. December Brent gained 78 cents or 1.3 percent to settle at $59.10 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended unchanged compared to its previous close, as investors remained cautious ahead of US-China trade talks. Some concern also came as Moody's Investors Service cut India's gross domestic product (GDP) growth forecast for 2019-20 to 5.8% from the earlier estimate of 6.2%. It attributed the deceleration to an investment-led slowdown that has broadened into consumption, driven by financial stress among rural households and weak job creation. Besides, a weak trend at Dalal Street weighed on the local unit. On the global front, US dollar was on track for its biggest daily drop in five weeks on Thursday against its rivals as the prospects of a partial trade deal between China and the United States fuelled appetite for trade-oriented currencies such as the euro and the Australian dollar. Finally, the rupee ended unchanged from its previous close of 71.07 on Wednesday.

 

The FIIs as per Thursday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 5037.50 crore against gross selling of Rs 5720.52 crore, while in the debt segment, the gross purchase was of Rs 1205.72 crore with gross sales of Rs 1826.07 crore. Besides in the hybrid segment, the gross buying was of Rs 22.58 crore against gross selling of Rs 26.05 crore.

 

The US markets settled in green territory on Thursday on hopes that top-level US-China trade talks would yield at least a partial deal, while a rise in Apple's shares lifted the technology sector. Asian markets are trading higher on Friday after US President Donald Trump said he would meet with China's top trade negotiator. Indian markets ended in red on Thursday after Moody's Investors Service slashed its 2019-20 GDP growth forecast for India to 5.8 percent from 6.2 percent earlier. Today, the markets are likely to make positive start following firm cues from Asian peers. Investors will be eyeing the data of India's Index of Industrial Production (IIP) for August and Infosys Q2 earnings set to be release later in the day. Traders will be getting some encouragement with Union Finance Minister Nirmala Sitharaman's statement that the government is giving sector-specific solutions to fight the slowdown in economic growth. Hinting at other measures like steps to improve exports, easing credit, making more money available by early repayments to vendors and front-loading of banks recapitalisation, Sitharaman said the government has been working on sector-specific measures. Market participants may take note with the Goods and Services Tax (GST) collections dropping sharply to a 19-month low in September, the government has constituted a committee of officers to suggest measures to augment collections, expand the tax base and check evasion. However, some cautiousness may come as India Ratings and Research pared India's gross domestic product (GDP) forecast for 2019-20 to 6.1%, the second downgrade in two months. The agency had revised its GDP growth estimate to 6.7% from its earlier forecast of 7.3% in August. Also, investors may be concern with Crisil Research's report that a sharp drop in demand across consumption segments pulled down corporate revenue, excluding that of banking, financial services, insurance and oil companies, by 3 per cent in the second quarter of FY20. As per the report, it's first time in 14 quarters that revenues have declined. Meanwhile, markets regulator SEBI has come out with a detailed framework for issuance of depository receipts (DRs), a move that will provide Indian companies increased access to foreign funds. There will be some buzz in the jewellery stocks with the Gems and Jewellery Export Promotion Council's (GJEPC) report that gems and jewellery exports have declined 7 per cent to $12.4 billion during April-August 2019-20 on account of slowdown in demand in major developed markets. Aviation stocks will be in focus with International Air Transport Association (IATA) data showing that India slipped to the fourth position in domestic air passenger traffic in August with passenger volume growing 3.7 percent in the month over the period year-ago, reflecting the deepening crisis in the economy spawned by slumping consumer demand.

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

11,234.55

11,197.62

11,282.42

BSE Sensex

37,880.40

37,745.48

38,072.78

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

2,072.66

40.95

39.83

42.38

Bharti Airtel

476.61

377.25

364.50

387.50

SBI

375.78

254.15

251.83

257.23

Tata Motors

312.29

116.80

115.43

118.93

ITC

242.95

243.20

241.35

246.35

 

  • Infosys has entered into a strategic partnership with Eishtec, which includes the transfer of Eishtec's business to Infosys BPM, an Infosys company. 
  • M&M has launched a special edition of its utility vehicle the Bolero with a host of new features amid the festival season. 
  • Tata Motors Group's global wholesales in September 2019, including Jaguar Land Rover, were at 89,912 nos, lower by 27%, as compared to September 2018. 
  • IOC has launched two new marine fuel grades and a lubricant range at the Bunker ConFab 2019, an international bunker meet held at Mumbai.
News Analysis