It turned out to be a vulnerable
performance from Indian benchmark indices on Tuesday, as they failed to snap
the session in the green territory and settled marginally below the neutral
lines. Sentiments remained subdued after finance minister Arun Jaitley said
that the economy will have to face short-term challenges in implementing the
biggest tax reforms since Independence. He further added that the official
launch of the GST will take place on the midnight of June 30 at a function,
which will be organised in Central Hall of Parliament. The optimism in domestic
markets petered out completely by the end of trade and the benchmarks even
drifted in to the negative territory despite getting off to a gap-up opening.
Shares of IT companies rose following overnight rebound in US technology
stocks, while banking stocks declined after Punjab joined Maharashtra and Uttar
Pradesh in announcing sops for farmers. Punjab Chief Minister Amarinder Singh
on Monday announced a total waiver of entire crop loans of 8.75 lakh small and
marginal farmers. Some concerns also came with report that foreign portfolio
investors (FPIs) sold shares worth a net Rs 250 crore on June 19, 2017.
However, the downside risks for the frontline indices was limited by Fitch
Ratings' latest report indicating that India's economic growth is expected to
rise by 7.4% and 7.6% in the next two fiscal years. The rating agency added
that the investment in India is also expected to witness gradual rise owing to
transmission of supportive monetary policy along with the government's various
structural reforms. Some support also came with India, pitching for a greater
engagement with BRICS (Brazil, Russia, India, China and South Africa) nations
on issues the international community addressed during BRICS Foreign Ministers
meeting in Beijing. Meanwhile, Airline stocks such as SpiceJet, IndiGo and Jet
Airways gained traction after passengers carried by domestic airlines grew by
close 18% to 465.87 lakhs during January-May 2017 as against 396.04 lakhs in
the corresponding period of previous year.
Finally, the BSE Sensex declined 14.04 points or 0.04% to 31297.53,
while the CNX Nifty was down by 4.05 points or 0.04% to 9,653.50.
The US markets closed lower on
Tuesday, as investors dumped energy shares after crude-oil prices slipped into
bear-market. Crude oil prices sank to a 10-month low on ongoing worries about a
supply glut pressured prices. Investors are keeping an eye on the parade of
Federal Reserve speakers to get a handle on the central bank's stance on future
rate increases as well as politics. On
the economy front, the US current-account deficit, a measures of the nation's
debt to other countries, rose 2.5% to $116.8 billion in the first quarter. The
increase in the current-account deficit in the fourth quarter was tied to a
higher trade deficit in goods such as foreign autos or cellphones and a smaller
surplus in primary income - returns on American-owned assets held abroad. The
fourth-quarter gap in the current account was raised to $114 billion from an
original reading of $112.4 billion. The current account reveals if a country is
a net lender or debtor. The current-account deficit was 2.5% of GDP in the
first quarter, up slightly from 2.4% at the end of 2016. The Dow Jones
Industrial Average lost 61.85 points or 0.29 percent to 21,467.14, Nasdaq
dropped 50.98 points or 0.82 percent to 6,188.03, while S&P 500 edged lower
by 16.43 points or 0.67 percent to 2,437.03.
Crude oil futures slumped to a
seven-month low on Tuesday ahead of inventory data, and amid reports that Nigeria
and Libya are ramping up production. The two most vulnerable OPEC nations are
exempt from the cartel's supply quota deal with Russia. Sentiment on oil
remained negative for the second-consecutive session, as investors continued to
doubt Opec and its allies' efforts to rebalance supply and demand in the market
in the wake of rising global output. Benchmark crude oil futures for July
delivery ended lower by $0.92 or 2.1 percent to $43.23 on the New York
Mercantile Exchange. In London, Brent crude for July delivery ended down by 1.90
percent to $46.01 on the ICE.
Indian
rupee depreciated against the US dollar on Tuesday, due to fresh demand for the
American currency from banks and importers. Sentiments remained subdued with Fitch
Rating's latest report that demonetisation of old Rs 500 and 1,000 notes had a
material impact on spending as reflected in significant slowing of GDP growth
in January-March and warned that the ongoing steep decline in investment could
spell risks to growth potential. Besides, dollar's strength against some
currencies overseas also pushed down the rupee. On the global front, dollar hit
a three-week high against a basket of currencies on Tuesday, after an
influential Federal Reserve official said U.S. inflation would pick up as wages
improved, bolstering bets on the Fed continuing to raise interest rates.
Finally, the rupee ended at 64.50, 8 paise weaker from its previous close of
64.42 on Monday.
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
3886.89 crore against gross selling of Rs 4058.44 crore, while in the debt
segment, the gross purchase was of Rs 1745.12 crore with gross sales of Rs
671.00 crore.
The US markets ended mostly in
red and the Dow and the S&P 500 pulled back off yesterday's record closing
highs, amid a sharp drop by the price of crude oil and lacking any major US
economic data in last session. The Asian markets have made a soft start and
some of the indices led by the Japanese market are down by about a quarter
percent. Chinese market too was mildly in red despite the MSCI Inc. adding the
nation's domestic stocks to its emerging-markets index. The Indian markets
after a lackluster trade ended mildly in red in the last session. Today, the
start is likely to remain somber and the markets will follow the global trend.
Traders will be concerned with the inclusion of Chinese mainland stocks to the
MSCI index, which could lead to hundreds of billions of dollars worth of share
purchases, shrinking shares of other emerging markets, including India. Traders
may however get some support with finance minister Arun Jaitley's statement
that the Centre will stick to its fiscal deficit target of 3.2% of gross
domestic product (GDP) for 2017-18. Jaitley also made it clear that the Centre
has no plans to announce any farm loan waiver. There will be some action in the
textile stocks, as the rating agency ICRA in its latest report has said that the
impact of the Goods and Services Tax (GST) is likely to be neutral to positive
across segments in the textile industry compared to the current tax regime.
There will be buzz in the oil stocks too, as the international crude oil prices
slumped by around 2 percent overnight. The housing finance companies may come
under pressure on a ICRA report that housing credit growth moderated to 16 per
cent in 2016-17 from 19 per cent in 2015-16.
Support and Resistance: NSE
(Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9653.50
|
9639.33
|
9672.08
|
BSE Sensex
|
31297.53
|
31241.84
|
31372.88
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
ICICI Bank
|
168.49
|
292.45
|
288.50
|
295.90
|
SBI
|
149.28
|
290.10
|
286.80
|
292.20
|
Tata Motors
|
120.15
|
467.40
|
458.68
|
473.43
|
Tata Power
|
109.63
|
82.10
|
79.05
|
83.80
|
ITC
|
82.61
|
308.70
|
307.13
|
311.23
|
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