Indian equity markets faced
volatility on Tuesday, with Sensex & Nifty closing below their crucial
psychological levels of 37,400 & 11,050, respectively. Indices made a
cautious start, as former Reserve Bank of India's Governor Raghuram Rajan
called slowdown in the economy as very worrisome and said the government needs
to fix the immediate problems in power and non-bank financial sectors and come
out with a new set of reforms to energise private sector to invest. Sentiments
also got hit, with Care Ratings' report that India's jobs scene -- with
unemployment at a 45-year high -- is looking gloomy with hiring activity
slowing across most sectors. In the last leg of trade, markets managed to come
off their day's low points to settle with marginal losses, on the back of firm
global markets. Traders took support with Finance Minister Nirmala Sitharaman's
statement that corporate tax rate for companies with over Rs 400 crore turnover
will be gradually cut to 25% and the government will support wealth creators.
Besides, Competition Commission of India (CCI) has introduced an automatic
system of approval for combinations under Green Channel, with an effort to make
mergers and acquisitions (M&A) filings approval faster. This system would
significantly reduce time and cost of transactions. Finally, the BSE Sensex
lost 74.48 points or 0.20% to 37,328.01, while the CNX Nifty was down by 36.90
points or 0.33% to 11,017.00.
The US markets ended lower with
cut of over half a percent on Tuesday as investors contended with worries about
the strength of the US economy and political developments in Europe that were
weighing on government bonds. Trump once again threatened to impose tariffs on
European auto imports. Traders also expressed some uncertainty ahead of the
release of the minutes of the Federal Reserve's late-July meeting on Wednesday.
The minutes, along with Fed Chairman Jerome Powell's speech on Friday, may shed
additional light on the outlook for interest rates. The Fed cut interest rates
by 25 basis points last month and CME Group's FedWatch tool currently indicates
a 95 percent chance of another 25 basis point rate cut in September. Powell
suggested that the July rate cut should not be seen as the beginning of a
lengthy cutting cycle, but President Donald Trump has been putting intense
pressure on the Fed to continue cutting rates. Trump claimed that the US
economy is very strong in spite of Powell's horrendous lack of vision. He said
the Fed Rate, over a fairly short period of time, should be reduced by at least
100 basis points, with perhaps some quantitative easing as well. He added if
that happened, our Economy would be even better, and the World Economy would be
greatly and quickly enhanced-good for everyone. Dow Jones Industrial Average
dropped 173.35 points or 0.66 percent to 25962.44, Nasdaq declined 54.25 points
or 0.68 percent to 7948.56 and S&P 500 was down by 23.14 points or 0.79
percent to 2900.51.
Crude oil futures end marginally
higher on Tuesday ahead of US government data that is expected to reveal a
weekly decline in domestic crude stockpiles, following back-to-back weekly
supply increases. Slightly easing worries about US-China trade dispute, China's
interest rate reforms and expectations of more stimulus from global central
banks supported oil's uptick. However, worries about near term energy demand
outlook limited oil's gains. Benchmark crude oil futures for September gained
13 cents or 0.2 percent to settle at $56.34 a barrel on the New York Mercantile
Exchange. October Brent rose 29 cents or 0.5 percent to settle at $60.03 a
barrel on London's Intercontinental Exchange.
Indian rupee ended weaken for
second consecutive session on Tuesday against the US dollar, due to rising
crude oil prices along with strength in the dollar overseas. Market
participants remained worried with report that former Reserve Bank of India
(RBI) Governor Raghuram Rajan called slowdown in the economy very worrisome and
said the government needs to fix the immediate problems in power and non-bank
financial sectors and come out with a new set of reforms to energise private
sector to invest. Traders took note of RBI governor Shaktikanta Das' statement
that the central bank is looking to formalise policies to link loan rates to an
external benchmark like the repo so as to speed up transmission. On the global
front, private report stateed that the euro hovered around a two-week low
versus the dollar as the US currency held strong on Tuesday, boosted by
slightly higher Treasury yields, while political uncertainties in Italy also
kept the common currency subdued. Finally, the rupee ended at 71.71, 28 paise
weaker from its previous close of 71.43 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
3217.78 crore against gross selling of Rs 3482.82 crore, while in the debt
segment, the gross purchase was of Rs 3256.87 crore with gross sales of Rs
1726.85 crore. Besides, in the hybrid segment, the gross buying was of Rs 62.47
crore against gross selling of Rs 9.06 crore.
The US markets ended in red on
Tuesday as investors weighed up the prospect of fiscal stimulus from some of
the world's biggest economies. Asian markets are trading mixed on Wednesday as
fresh worries about a global recession led investors to dump risky assets, with
US President Donald Trump showing no signs of backing down in his trade war
with China. Indian markets snapped three-day winning streak and ended volatile
session in red territory on Tuesday, as cautious investors awaited more details
on reports of a corporate tax rate cut by the government before making fresh
bets. Today, the markets are likely to make slightly negative start amid
lackluster cues from global markets. Investors will be looking for the release
of the minutes of the Reserve Bank of India's (RBI's) Monetary Policy meeting
later in the day. The central bank lowered the repo rate by 35 basis points to
5.40% during its August meeting. There will be some cautiousness with a private
report that with the issue of higher tax surcharge proving to be a thorn, a
lobby of FPIs has urged the government to use information on beneficiaries to
identify them and spare broad-based entities. The Budget proposal to impose a
higher tax surcharge - from 15% to 25% for incomes between Rs 2 crore and Rs 5
crore and from 15% to 37% for higher incomes - on non-corporate FPIs had
rattled the market. However, traders may take note of report that for effective
transmission of the RBI's lower policy rates, the country's largest lender SBI
suggested the regulator should ask banks to link incremental bulk deposits to
repo rate as it would help in reducing cost of funds without hurting small
depositors and senior citizens. Meanwhile, with an aim to further safeguard
investors' interests and to take defaulters to task, capital market regulator
SEBI is planning to unveil a slew of reforms, including for greater checks on
credit rating agencies and for rewarding informants in insider trading cases
with up to Rs 1 crore reward. There will be some buzz in the banking stocks
with a private report that overall loan growth for banks in the first quarter
ending June dropped 1.2% quarter-on-quarter led by modest net interest income
(NII) and a sharp drop in pre-provision operating profits. Insurance stocks
will be in focus with the Insurance Regulatory and Development Authority of
India's (Irdai) data showing that non-life insurance companies earned a premium
income of Rs 14,378.45 crore in July this year, up nearly 23% from a year ago.
There will be some reaction in aviation stocks as the government extended the
process of temporary allocation of slots and bilateral foreign flying rights of
defunct airline Jet Airways to other airlines till December.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE
Nifty
|
11,017.00
|
10,976.10
|
11,067.10
|
BSE
Sensex
|
37,328.01
|
37,194.76
|
37,486.41
|
Nifty Top volumes
Stock
|
Volume
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
(in
Lacs)
|
Yes
Bank
|
1,679.67
|
71.20
|
68.82
|
75.27
|
Tata
Motors
|
348.09
|
123.85
|
120.30
|
126.10
|
Indiabulls
Housing Finance
|
255.58
|
521.40
|
504.37
|
539.32
|
SBI
|
232.04
|
283.70
|
280.43
|
287.18
|
ICICI
Bank
|
161.81
|
416.90
|
411.87
|
422.57
|
State Bank of India has launched a number of offers including cheaper rates for home and auto loan borrowers, to cash in on festival fervour.
Maruti Suzuki India has launched offer of 5-year, 1-lakh km warranty at its countrywide dealerships across 1,893 towns and cities for various models.
Dr. Reddy's Laboratories has launched Vigabatrin Powder for Oral Solution, USP in 500 mg per packet approved by the USFDA.
NTPC is planning to set up an ultra-mega solar park in the Kutch region of Gujarat that will produce up to 5,000 mega watts and involve an investment of Rs 20,000 crore or more.