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NSE Intra-day chart (13 November 2019)
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Market Commentary 14 November 2019
Markets to make a mild positive start ahead of WPI data

 

Last hour sell-off dragged Indian equity bourses to their intraday low points on Wednesday, with Sensex & Nifty ending lower by around 230 and 75 points, respectively. Indices made a cautious start of the day, as State Bank of India's Economic Research Department in its Ecowrap report sharply cut India's Gross Domestic Product growth forecast to 5% for Fiscal Year 2019-20 from the earlier projection of 6%. Adding some worries, India's factory output growth, measured by the Index of Industrial Production, contracted by 4.3% in September as compared to a contraction 1.1% in August 2019 as all three broad-based sectors of capital goods production, consumer durables, and infrastructure and construction goods contracted. Volatility remained over the markets for the whole day, on weak cues from global markets. Domestic sentiments remained hampered, amid a report stating that venture investment activity in India slowed down both by value and deal volumes in October to $3.312 billion in 91 transactions on account of poor show by the realty sector. Separately, according to the latest survey released by National Council of Applied Economic Research, business confidence of India Inc declined to its lowest in six years in August-October. Traders overlooked Finance Minister Nirmala Sitharaman's statement that the Government of India's top priority is to put the farmers' concerns and rural development on a larger landscape. Finally, the BSE Sensex fell 229.02 points or 0.57% to 40,116.06, while the CNX Nifty was down by 73.00 points or 0.61% to 11,840.45.

 

The US markets ended mostly higher on Wednesday as Federal Reserve Chairman Jerome Powell reiterated in Congressional testimony that the central bank is likely to leave interest rates unchanged in the near future. Powell told members of the Joint Economic Committee that the Fed would leave rates at their current level unless there is a material change in the economic outlook. However, upsides remained capped after a report said US-China trade talks have hit a snag over Chinese purchases of US agricultural products. President Trump earlier said China had agreed to buy up to $50 billion in US soybeans, pork and other agricultural products annually, but China is reluctant to put a numerical commitment in the text of a potential agreement. On the economic front, partly reflecting a substantial rebound in energy prices, the Labor Department released a report showing US consumer prices rose by slightly more than anticipated in the month of October. The Labor Department said its consumer price index climbed by 0.4 percent in October after coming in unchanged in September. Street had expected consumer prices to rise by 0.3 percent. The bigger than expected increase in consumer prices came as energy prices spiked by 2.7 percent in October after tumbling by 1.4 percent in September. Gasoline prices led the way higher, surging up by 3.7 percent in October following the nosedive seen over the two previous months. Excluding food and energy prices, core consumer prices edged up by 0.2 percent in October after a 0.1 percent uptick in September. The uptick in core prices matched street estimates.

 

Crude oil futures ended higher on Wednesday, with prices recouping most of the losses they suffered over the past trading sessions, after the Organization of the Petroleum Exporting Countries (OPEC) said a global recession is unlikely. Oil was also supported by the Federal Reserve Chairman Jerome Powell's testimony before the Congress that the US economy would see a sustained expansion thanks to the impact of recent interest rate cuts. Besides, in its Short-Term Energy Outlook report, the US Energy Information Administration (EIA) raised its forecasts for US crude-oil production and prices for this year and next. The EIA forecasts 2019 US crude production of 12.29 million barrels a day, up 0.2% from the October forecast. It also raised its 2020 US output forecast by 0.9% to 13.29 million barrels a day. Benchmark crude oil futures for December rose 32 cents or 0.6 percent to settle at $57.12 a barrel on the New York Mercantile Exchange. January Brent gained 31 cents or 0.5 percent to settle at $62.37 a barrel on London's Intercontinental Exchange.

 

Falling for third consecutive session, Indian rupee registered sharp losses against the dollar on Wednesday as investors remained anxious over uncertainty in US-China trade deal. Rupee sentiment remained fragile as State Bank of India's Economic Research Department in its Ecowrap report sharply cut India's Gross Domestic Product growth forecast to 5% for Fiscal Year 2019-20 from the earlier projection of 6%. Some pessimism also came as India's factory output growth, measured by the Index of Industrial Production, contracted by 4.3% in September as compared to a contraction 1.1% in August 2019 as all three broad-based sectors of capital goods production, consumer durables, and infrastructure and construction goods contracted. Traders also remained on sidelines ahead of Consumer Price Index (CPI) data for October scheduled to be released today. Finally, the rupee ended at 72.09, 62 paise weaker from its previous close of 71.47 on Monday.

 

The FIIs as per Wednesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 4891.17 crore against gross selling of Rs 3311.19 crore, while in the debt segment, the gross purchase was of Rs 779.02 crore with gross sales of Rs 435.66 crore. Besides, in the hybrid segment, the gross buying was of Rs 27.05 crore against gross selling of Rs 7.80 crore.

 

The US markets ended mostly higher on Wednesday helped by a big jump in Walt Disney shares, while upside remained in check by fresh uncertainty over US-China trade relations. Asian markets are trading mostly in red on Thursday as investors awaited key Chinese data for clues on how much the 16-month trade war between Beijing and Washington has hit growth in the world's second-largest economy. Indian markets ended lower with cut of over half a percent each on Wednesday, led by the last hour sell-off in banking stocks. Today, the markets are likely to make flat-to-positive start as market participants will be looking forward to Wholesale Price Index (WPI) to be released later in the day. Investors will be taking encouragement with SBI report showing that credit growth picked up rapid pace beginning September - jumping by Rs 1.08 lakh crore - mainly helped by housing, NBFC and lately MSME. Traders may take note of report that in perhaps the first instance, the finance ministry has kicked off the exercise to formulate the next budget by seeking suggestions on changes in direct and indirect taxes from industry and trade associations. Some support may come with report that India is the world's most open and investment friendly economy, Prime Minister Narendra Modi told business leaders of the BRICS group in Brasalia, urging them to invest in the country and take advantage of its limitless possibilities. However, weakness in Asian peers may weight on domestic sentiments. There may some cautiousness with the government data showing that India's retail inflation unexpectedly quickened to a 16-month high at 4.62%, exceeding the central bank's medium-term target for the first time since July 2018, as prices of kitchen staples such as onion and tomato skyrocketed. Also, a private report indicated that the gloom surrounding the Indian economy is likely to get worse in the months ahead. Meanwhile, markets regulator SEBI came out with a detailed disclosure framework for entities seeking listing of municipal debt securities issued on private placement basis. There will be some buzz in the telecom stocks as the Department of Telecom (DoT) issued notice to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court. The DoT has given option to telecom operators to clear all the dues on self-assessment basis. There will be some reaction in sugar stocks with repro that as the Rs 15,000 crore soft loan scheme for sugar mills is moving at a snail's pace, the government has extended the moratorium period for repayments by six more months. Now, the moratorium period is one-and-a-half years.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,840.45

11,793.50

11,917.10

BSE Sensex

40,116.06

39,969.14

40,355.08

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

3,179.11

68.20

65.10

73.30

Tata Motors

339.26

170.60

168.00

174.60

SBI

326.76

306.80

302.10

315.05

ICICI Bank

242.73

485.75

480.20

494.40

GAIL (India)

193.72

123.85

121.43

128.08

 

  • JSW Steel's crude steel production declined 13 percent to 12.54 lakh tonne during October 2019. 
  • M&M has showcased innovative Precision Farming solutions powered by advanced digital technologies for the very first time, at Agritechnica 2019. 
  • TCS has expanded partnership with Phoenix Group to cover an additional 4.2 million policies. 
  • Bharti Airtel has strengthened 4G services on the Chennai Metro rail route for the benefit of its customers.
News Analysis