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NSE Intra-day chart (16 October 2019)
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Market Commentary 17 October 2019
Benchmarks to get a cautious start amid mixed cues from Asian peers

 

Indian equity benchmarks managed to settle a volatile session on positive note on Wednesday. The start of the day was optimistic, supported with the Reserve Bank of India's (RBI) data report showing that India's services exports rose by 10.4% to $18.24 billion in August in the current financial year. The services exports or receipts were $16.53 billion in the same month of 2018. It was at $19.08 billion in July this year. Market participants got relief with the World Bank's statement that India has halved its poverty rate since the 1990s and achieved a seven plus growth rate over the last 15 years. It also said that India is both critical to the success of global development efforts, including eliminating extreme poverty, and as an influential leader for global goods. But, volatility emerged over the markets during the session, as the International Monetary Fund (IMF) cut India's GDP growth projection for the year 2019 to 6.1%, which is 1.2% down from its April projections and noted that the Indian economy is expected to pick up the next year at 7.0 % in 2020. The street also got cautious as tax officers expressed concerns over the faceless income tax assessment system initiated by the Central Board of Direct Taxes, saying it will create procedural difficulties and may hit revenue collections. However, indices managed to end in green terrain, after Chief Economic Advisor K V Subramanian called upon the industry to start making investments, stressing that the fundamentals of the economy are very strong. Finally, the BSE Sensex gained 92.90 points or 0.24% to 38,598.99, while the CNX Nifty was up by 35.70 points or 0.31% to 11,464.00.

 

The US markets ended marginally lower on Wednesday after US retail sales fell for the first time in seven months in September and Meanwhile, an angry response from China to legislation passed by the US House of Representatives in support of Hong Kong pro-democracy protesters also cast doubt on prospects for the future of the trade deal between the two countries announced last Friday. The Commerce Department said retail sales fell by 0.3 percent in September after climbing by an upwardly revised 0.6 percent in August. The drop came as a surprise to participants, who had expected sales to rise by 0.3 percent compared to the 0.4 percent increase originally reported for the previous month. The unexpected decrease in retail sales was partly due to a notable pullback in sales by motor vehicle and parts dealers, which slumped by 0.9 percent in September after spiking by 1.9 percent in August. Excluding the pullback in auto sales, however, retail sales still edged down by 0.1 percent in September after rising by a revised 0.2 percent in August. Street had expected ex-auto sales to rise by 0.2 percent compared to the unchanged reading originally reported for the previous month. However, downside remained capped as the National Association of Home Builders released a separate report showing homebuilder confidence unexpectedly climbed to its highest level in well over a year in the month of October. The report said the NAHB/Wells Fargo Housing Market Index jumped to 71 in October after inching up to 68 in September. Street had expected the index to come in unchanged from the previous month. With the unexpected increase, the housing market index rose for the fourth straight month and reached its highest level since hitting a matching reading in February of 2018.

 

Crude oil futures ended higher after two days losing on Wednesday amid expectations Organization of the Petroleum Exporting Countries (OPEC) will continue to cut output. OPEC and its allies are committed to maintaining oil market stability beyond 2020. OPEC, Russia and other oil producer allies will do whatever is possible within their powers to ensure relative stability is sustained beyond 2020. However, upside remain capped as US-China trade tensions linger and a critical Brexit deadline is fast approaching. Traders were also a bit cautious as they looked ahead to weekly inventory data. The Energy Information Administration (EIA) will release its data Thursday morning. The reports are delayed by a day due to Columbus Day holiday on Monday. Benchmark crude oil futures for November rose 55 cents or 1 percent to settle at $53.36 a barrel on the New York Mercantile Exchange. December Brent gained 68 cents or 1.2 percent to settle at $59.42 a barrel on London's Intercontinental Exchange.

 

Snapping two day falling streak, Indian rupee ended marginally higher against dollar on Wednesday on selling of dollars by banks and exporters. Traders took support with World Bank's report that India has halved its poverty rate since the 1990s and achieved a seven plus growth rate over the last 15 years. India is both critical to the success of global development efforts, including eliminating extreme poverty, and as an influential leader for global goods. However, gains remain capped as the International Monetary Fund (IMF) cut India's GDP growth projection for the year 2019 to 6.1%, which is 1.2% down from its April projections and noted that the Indian economy is expected to pick up the next year at 7.0 % in 2020. On the global front, dollar headed towards a four-week low against its rivals on Wednesday on concerns that elevated trade tensions between Washington and Beijing will continue to weigh on the global growth outlook. Finally, the rupee ended at 71.43, 11 paise stronger from its previous close of 71.54 on Tuesday.

 

The FIIs as per Wednesday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 7729.38 crore against gross selling of Rs 5559.82 crore, while in the debt segment, the gross purchase was of Rs 767.35 crore with gross sales of Rs 1215.45 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.55 crore against gross selling of Rs 10.84 crore.

 

The US markets ended lower Wednesday as economic data suggested consumers were holding back on spending in the face of trade tensions and a global economic slowdown. Asian markets are trading mixed on Thursday as soft US retail sales data raised concerns about the health of the world's largest economy. Indian markets ended Wednesday's volatile session in green territory for a fourth consecutive day, mainly on the back of late hour buying. Today, the markets are likely to make a cautious start amid mixed cues from Asian peers and rise in crude oil prices. Traders will be concerned with a report that amidst the deepening slowdown across the economy, commercial credit demand has contracted 2.6 percentage points to Rs 63.80 lakh crore in the June quarter over the three months to March period, accompanied by a steep deterioration in asset quality. Also, there will be some cautiousness with private report that foreign portfolio investor (FPI) interest in Indian corporate bonds has been waning over the last few months, with their investments hitting a 10-month low in October, as the perception on credit risk of Indian companies continued to deteriorate because of slowing demand, rising stress across sectors like real estate and NBFCs and a bearish view on the rupee. However, some support may come later in the day with Finance minister Nirmala Sitharaman's statement that more reforms are on the anvil this fiscal to boost growth as fresh economic data and subdued corporate earnings point to a deeper economic downturn. Traders may take note of Commerce Minister Piyush Goyal's statement that India will maintain a slow & steady approach on the issue of trade deals. Meanwhile, India's fuel demand slipped to its lowest in over two years in September after a fall in diesel and industrial fuel consumption negated the rise in petrol and LPG consumption. The Petroleum Planning and Analysis Cell (PPAC) data showed that consumption of petroleum products in September dropped to 16.01 million tonnes, its lowest since July 2017, from 16.06 million tonnes in the same month last year. Banking stocks will be in focus with report that credit growth at Indian banks has dropped to its lowest level in nearly two years, the latest Reserve Bank of India (RBI) data shows, as slowing domestic consumption weighs on demand. There will be some buzz in the telecom stocks with report that the Telecom Department (DoT) is trying to get more spectrum free in the 3.3-3.6 Ghz band for 5G services. There will be lots of earnings announcements too, to keep the markets in action.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,464.00

11,423.05

11,493.00

BSE Sensex

38,598.99

38,454.98

38,704.69

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

1,888.00

41.05

39.88

42.13

Tata Motors

315.23

125.85

124.13

127.93

SBI

308.92

256.05

253.38

260.33

BPCL

203.81

512.40

502.47

521.17

ZEEL

192.14

259.65

250.77

268.02

 

  • ONGC's wholly-owned subsidiary -- ONGC Videsh has made new discoveries in Colombia and Brazil. 
  • Sun Pharmaceutical Industries' one of wholly owned subsidiaries has launched Drizalma Sprinkle in the US for oral use. 
  • Bharti Airtel has resumed postpaid mobile services in J&K and planning to waive postpaid plan rental charges during the service suspension phase for its Airtel Thanks customers.  
  • Bajaj auto has launched its iconic scooter brand Chetak in an electric avatar.
News Analysis