Indian equity bourses witnessed
bloodbath on Tuesday, with Sensex & Nifty plunging around 1.65% each. After
a cautious start of the day, key indices remained bearish throughout the day,
as the government data showed that India's factory output growth, measured by
the Index of Industrial Production, slowed down for second straight month to
2.0% in June 2019 as compared to 7% in June 2018 & it is also lower than
3.1% in May 2019. The slowdown was mainly due to poor performance of the
manufacturing & mining sectors and a contraction in the capital goods &
consumer durables sectors. Traders also remained on sidelines ahead of Consumer
Price Index-based inflation data for July later in the day. Markets extended
their losses in the second half of the trading session to end near their
intraday lows points, tracking weak global markets. Market participants were
cautious, amid a private report stating that the Reserve Bank of India is
unlikely to vote in favour of overseas sovereign bonds at its meeting with the
government. The central bank is concerned that signals by overseas bonds could
disrupt local bonds, which are controlled by the RBI. The mood of street
remained down, even though Finance Minister Nirmala Sitharaman assured industry
leaders that the Reserve Bank of India and the government are on the same page
as regards to efforts that are required to boost the economy. Finally, the BSE
Sensex lost 623.75 points or 1.66% to 36,958.16, while the CNX Nifty was down
by 183.80 points or 1.65% to 10,925.85.
The US markets ended sharply
higher on Tuesday after the Trump administration backed off on imposing tariffs
on some Chinese imports from September 1, following recent sharp falls in
equity markets and ahead of a politically damaging rise in prices for consumer
goods later this year on account of the proposed levies. Products that will not
be subject tariffs from September include cell phones, laptop computers, video
game consoles, certain toys, computer monitors, and certain items of footwear and
clothing. The delays mean that goods worth $152 billion, or more than half of
the original $300 billion list, will now not be hit with tariffs until
mid-December. A report of a de-escalation in the trade war overshadowed
concerns about slowing economic growth and the potential for Beijing to crack
down on protests in Hong Kong, one of Asia's most important financial and trade
hubs. On the economic front, consumer prices in the US rose in line with
economist estimates in the month of July, according to a report released by the
Labor Department. The Labor Department said its consumer price index climbed by
0.3 percent in July after inching up by 0.1 percent in both May and June.
Street had expected prices to rise by 0.3 percent. The faster price growth was
partly due to a significant rebound in energy prices, which surged up by 1.3
percent in July after plunging by 2.3 percent in June. Meanwhile, food prices
were unchanged for the second month in a row, as a decline in the food at home
index was offset by an increase in the food away from home index. Excluding
food and energy prices, core consumer prices rose by 0.3 percent for the second
consecutive month, while Street had expected a 0.2 percent uptick. Dow Jones
Industrial Average rose 372.54 points or 1.44 percent to 26279.91, Nasdaq
surged 152.95 points or 1.95 percent to 8016.36 and S&P 500 was down by
42.57 points or 1.48 percent to 2926.32.
Crude oil futures end higher with
gain of four percent on Tuesday, following reports that the US will delay
tariffs on certain Chinese products until December, as the two nations look to
continue discussions on trade, easing fears about a global economic slowdown.
The US will delay imposing 10% tariffs on certain Chinese products, including
cellphones and laptop computers, until December 15. However, the Energy
Information Administration (EIA) said it expected US oil production in the
shale regions to rise to 8.768 million barrels a day in September, an increase
of 85,000 barrels a day from August. Benchmark crude oil futures for September
surged $2.17 or 4 percent to settle at $57.10 a barrel on the New York
Mercantile Exchange. October Brent rose $2.73 cents or 4.7 percent to settle at
$61.30 a barrel on London's Intercontinental Exchange.
Indian
rupee fell to nearly 6-month low against dollar on Tuesday, amid rising
geopolitical tensions across the globe. Market participants were cautious as
the government data showed that India's factory output growth, measured by the
Index of Industrial Production, slowed down for second straight month to 2.0%
in June 2019 as compared to 7% in June 2018 & it is also lower than 3.1% in
May 2019. Traders also remained wary ahead of Consumer Price Index (CPI) data
for July scheduled to be released today. Heavy selling in domestic equities
also kept pressure on the Indian rupee. Besides, dollar weakened against other
currencies overseas failed to cast any impact on the rupee. On the global
front, yen stood near a seven-month high against the dollar on Tuesday as
unrest in Hong Kong and gyrations in Argentina's markets heightened investor
risk aversion and fanned demand for the safe-haven Japanese currency. Finally,
the rupee ended at 71.40, 62 paise weaker from its previous close of 70.78 on
Friday.
The
FIIs as per Tuesday'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
4756.02 crore against gross selling of Rs 5502.36 crore, while in the debt
segment, the gross purchase was of Rs 601.15 crore with gross sales of Rs
518.20 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.91
crore against gross selling of Rs 17.98 crore.
The US markets ended higher on
Tuesday after the United States said it would delay tariffs on some Chinese
products, easing concerns that a protracted trade war would harm global growth.
Asian markets are trading in green on Wednesday following overnight gains on
Wall Street. Indian markets snapped tow-day winning streak and ended lower with
cut of around two percent each amid a selloff across sectors barring energy
shares coupled with subdued global markets. Today, the markets are likely to
make slightly positive start tracking firm cues from global markets. Traders
will be getting encouragement with the government data showing that the retail
price inflation rate inched down to 3.15 per cent in July against 3.18 per cent
in the previous month, owing to a fall in energy prices. This was the first
time in six months that the inflation rate dipped. The marginal dip was despite
the food inflation rate rising slightly to 2.36 per cent from 2.25 per cent
during this period. Some support may also come with report that the
slowdown-hit economy may soon get a booster dose from the government with
Finance Ministry working on a stimulus package for the industry may include a
slew of financial measures ranging from tax cuts, subsidies and other
incentives. Investors will be taking note of a report that the finance ministry
may soon consult the law ministry on how best to provide relief to foreign
portfolio investors (FPIs) from the super-rich surcharge that was announced in
the July 5 budget. Besides, the Reserve Bank of India (RBI) has permitted
startups, banks and financial institutions to set up regulatory sandbox (RS)
for live testing of innovative products in areas like retail payments, digital
KYC and wealth management. There will be some buzz in the housing finance
companies (HFCs) stocks with the Reserve Bank of India's (RBI) statement that
HFCs will be treated as one of the categories of NBFCs for regulatory purposes
and it will come under its direct oversight. There will be some reaction in
auto stocks with report that sales of passenger vehicles declined by 30.98 per
cent, the steepest fall in two decades, and industry executives are now
counting on a good monsoon to revive them in the festive season.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,925.85
|
10,836.33
|
11,080.63
|
BSE Sensex
|
36,958.16
|
36,646.05
|
37,512.72
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
2,067.13
|
73.60
|
69.57
|
80.92
|
Reliance Industries
|
479.23
|
1,274.75
|
1,232.90
|
1,309.70
|
Tata Motors
|
354.98
|
121.95
|
119.87
|
125.17
|
Indiabulls Housing Finance
|
335.71
|
573.10
|
519.55
|
612.10
|
NTPC
|
259.54
|
117.15
|
113.60
|
121.85
|
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