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NSE Intra-day chart (15 March 2019)
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Market Commentary 18 March 2019
Benchmarks to open in green on positive leads from global market

 

Extending their gains for fifth straight session, Indian equity benchmarks ended Friday's trade with a gain of around three fourth of a percent, with frontline gauges surpassing their crucial 38,000 (Sensex) and 11,400 (Nifty) levels. Sentiments remained upbeat throughout the session and markets started the day with a decent gains with traders taking encouragement with private report that the Reserve Bank of India's (RBI) $5 billion plan to swap rupees for dollars with domestic banks will help achieve its twin objectives of pushing interest rates down while also preventing a sharp appreciation in the rupee. Markets extended northward journey, as sentiment improved further with Commerce Secretary Anup Wadhawan's statement that India's exports are likely to touch an all-time high of $330 billion in the current fiscal ending March 31 (FY19), braving global challenges such as protectionist measures. He added that the country's engineering exports have grown significantly in recent years, notwithstanding major global challenges. Sentiments also remained jubilant with EEPC India-Deloitte strategy paper stating that India can achieve a three-fold aspirational increase in its engineering exports to reach $200 billion by 2025, if concerted efforts are made by the government and industry to develop a conducive ecosystem, and ensuring inputs at competitive prices. Traders took note of the RBI's statement that financial sector regulators discussed ways to address challenges pertaining to the quality of credit ratings and other issues concerning the economy. It added that the sub-committee reviewed the major developments on the global and domestic fronts that impinge on the financial stability of the country. However, traders trimmed some of their gains in last leg of trade, as investors remain little concerned with principal economic advisor's report that the economic growth during the UPA era was not bad, but the system was out of control. The economy then faced problems of rising soaring inflation, widening and current account fiscal deficit. Finally, the BSE Sensex rose 269.43 points or 0.71% to 38,024.32, while the CNX Nifty was up by 83.60 points or 0.74% to 11,426.85.

 

The US markets ended higher on Friday, with gains of over half a percent, amid optimism about US-China trade talks coupled with indications of more Chinese economic stimulus. Chinese Premier Li Keqiang pledged support for the slowing economy. Li said the country could use reserve requirements and interest rates to prevent a sharper deceleration in the world's second-largest economy. Investors overlooked the disappointing US economic data, including a Federal Reserve report showing industrial production rose by much less than expected in the month of February. The Fed said industrial production inched up by 0.1% in February after falling by a revised 0.4% in January. The uptick in production came as a spike in utilities output and an increase in mining output was largely offset by a continued drop in manufacturing output. Besides, a separate report from the New York Fed showed an unexpected slowdown in regional manufacturing growth in the month of March. The New York Fed said its headline general business conditions index fell to 3.7 in March after climbing to 8.8 in February. The index remained below 10 for the third straight month, which the New York Fed said suggests growth has remained quite a bit slower so far this year than it was for most of 2018. Meanwhile, preliminary data released by the University of Michigan on Friday showed a significant improvement in US consumer sentiment in the month of March. The report said the consumer sentiment index jumped to 97.8 in March from the final February reading of 93.8. Dow Jones Industrial Average surged 138.93 points or 0.54 percent to 25848.87, Nasdaq gained 57.62 points or 0.76 percent to 7688.53 and S&P 500 was up by 14.00 points or 0.50 percent to 2822.48.

 

Crude oil futures snapped four-day winning streak and ended slightly lower on Friday amid growing signs of tightening global supplies. Besides, renewed optimism about US-China trade talks and a report from the International Energy Agency (IEA) that said output from the Organization of the Petroleum Exporting Countries (OPEC) had dropped to its lowest level in four years capped the losses in crude oil prices. Meanwhile, the meeting of the OPEC and non-OPEC Joint Ministerial Monitoring Committee, scheduled for March 18. Benchmark crude oil futures for April lost 9 cents or 0.2 percent to settle at $58.52 a barrel on the New York Mercantile Exchange. May Brent crude fell 7 cents or 0.1 percent to settle at $67.16 a barrel on London's Intercontinental Exchange.

 

Rising for the fifth straight session, Indian rupee ended higher against dollar on Friday, on the back of dollar sales by investors. Investors sentiment was supported with a private report that the Reserve Bank of India's (RBI) $5 billion plan to swap rupees for dollars with domestic banks will help achieve its twin objectives of pushing interest rates down while also preventing a sharp appreciation in the rupee. Traders took note of the RBI's statement that financial sector regulators discussed ways to address challenges pertaining to the quality of credit ratings and other issues concerning the economy. It added that the sub-committee reviewed the major developments on the global and domestic fronts that impinge on the financial stability of the country. Besides, weakness of dollar in the overseas market coupled with strong gains in the local equity markets helped the domestic currency rebound. On the global front, dollar slipped against its rivals on Friday and was set for its biggest weekly drop in more than three months before a US central bank meeting next week where policymakers will shed more light on the outlook for interest rates. Finally, the rupee ended at 69.10, 24 paise stronger from its previous close of 69.34 on Thursday.

 

The FIIs as per Friday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 6160.77 crore against gross selling of Rs 4211.83 crore, while in the debt segment, the gross purchase was of Rs 3577.49 crore with gross sales of Rs 1989.88 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.49 crore against gross selling of Rs 2.33 crore.

 

The US markets ended in green on Friday on positive signs regarding trade talks between the US and China as well as UK lawmakers voted to delay a potentially chaotic exit from the European Union. Asian markets rose in early trade on Monday, buoyed on speculation the US Federal Reserve will sound decidedly dovish at its policy meeting later in the week. Indian markets extended their northward journey for fifth straight session and ended higher with notable gains on Friday on the back of heavy buying from foreign investors as well as domestic investors. Today, the start of the holiday truncated week is likely to be optimistic, tracking positive leads from global market. Traders will be getting encouragement with the trade ministry's statement that India's trade deficit narrowed to $9.60 billion in February, dragged down by a fall in gold and oil imports, as compared to $14.73 billion in January. The data showed that in February, merchandise exports rose 2.44 percent from a year earlier to $26.67 billion, while imports were down 5.41 percent to $36.26 billion. Besides, gold imports in February fell 10.81 percent year-on-year to $2.58 billion, compared to $2.90 billion during the same month a year ago. Some support will also come with report that overseas investors poured in more than Rs 20,400 crore in the domestic capital market in the first half of March, mainly driven by positive global cues. Traders may take note of report that industry body Assocham released a charter of demands to make India a $5 trillion economy by 2025. Listing out the charter, Assocham in a statement said it wants political parties to pledge, among other steps, to enable growth rate of 8-8.5 per cent per annum. Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das will hold discussions on March 26 with representatives of trade bodies and credit rating agencies on interest rate and steps to boost economic activities. There will be some buzz in the banking sector stocks with credit rating agency ICRA's statement that reduced net non-performing assets will drive considerable improvement in solvency of public sector banks (PSBs). Slippages will reduce during FY20 and reach levels of 1.9-2.4%, which is acceptable. Besides, banks may have to make higher provisions on loans to the power sector for the quarter ending March 2019 with the RBI saying that its February 12 circular continues to remain in force despite being challenged in the Supreme Court.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,426.85

11,369.43

11,485.63

BSE Sensex

38,024.32

37,771.44

38,265.98

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

387.15

245.05

241.43

250.73

SBI

379.28

298.40

293.50

302.30

ICICI Bank

314.67

395.30

389.52

399.67

IOC

296.34

157.35

152.30

160.80

ITC

213.95

290.80

287.92

295.12

 

  • M&M has received over 13,000 bookings for its compact SUV, Mahindra XUV300. 
  • NTPC has signed a MoU with Hazipur-based East Central Railway Zone for transportation of fly ash under Indian Railways' SFTO scheme. 
  • Tata Motors' wholly owned subsidiary -- JLR has started a voluntary recall of around 44,000 cars in the UK over higher than certified levels of carbon dioxide emissions. 
  • Tata Steel in partnership with Tata Trusts has inaugurated the new Comprehensive Cancer Care Facility at the newly renovated Meherbai Tata Memorial Hospital.
News Analysis