Indian equity bourses paused
record closing rally on Monday, with Sensex & Nifty closing on lower note.
After a weak beginning of the day, indices remained highly volatile, impacted
with Assocham president Niranjan Hiranandani's statement that the economy is
facing a liquidity problem and demand recession, and it requires measures to
lift consumption, including reduction in goods and services tax and personal
income tax and improved credit flow, to revive. Adding more worries,
International Monetary Fund chief economist Gita Gopinath said that while it
was anticipated that India's growth will slow down, the current numbers come as
a shocker with a sharp decline in both investment and consumption. In the
second half of the trading session, losses got intensive, amid a private report
stating that after taking a big hit from the falling rate of economic growth in
2019, the job market may remain muted in the New Year as well in terms of
workforce expansion and salary hikes as more and more companies are expected to
prefer up-skilling of existing staff rather than hiring new ones. However, key
indices staged some recovery at the end to come off day's low points, with
reports that India's forex reserves continued on the northward trajectory,
rising to a new record of $454.492 billion on the back of a $1.07 billion
accretion for the week ended December 13. Finally, the BSE Sensex lost 38.88
points or 0.09% to 41,642.66, while the CNX Nifty was down by 9.05 points or
0.07% to 12,262.75.
The US markets ended higher on
Monday, extending the upward trend seen over the past session, as investors
focused on a report that China will cut import tariffs for frozen pork,
pharmaceuticals and some high-tech components. China said tentative import tax
rates will be implemented for 859 types of products beginning January 1 in
order to optimize the trade structure and promote high-quality economic
development. The tentative import tax rates, which were imposed on 706 types of
products last year, are lower than the most-favored-nation tariffs. The move by
Beijing comes following the recent reports that the US and China have reached an
agreement on a phase one trade deal. Besides, some support came in on report
released by the Commerce Department showed a significant increase in US new
home sales in the month of November. The Commerce Department said new home
sales jumped by 1.3 percent to an annual rate of 719,000 after plunging by 2.7
percent to a revised rate of 710,000 in October. The rebound in new home sales
came as sales in the Northeast soared by 52.4 percent to a rate of 32,000 and
sales in the West surged up by 7.5 percent to a rate of 216,000. However,
reflecting a steep drop in orders for transportation equipment, the Commerce
Department released a report showing an unexpected slump in new orders for US
manufactured durable goods in the month of November. The report said durable
goods orders plunged by 2.0 percent in November after edging up by a downwardly
revised 0.2 percent in October. The sharp decline came as a surprise to
participants, who had expected durable goods orders to jump by 1.5 percent
compared to the 0.5 percent increase that had been reported for the previous
month.
Crude oil futures ended
marginally higher on Monday as traders refrained from making big moves ahead of
upcoming Christmas and New Year holidays. The possibility of Organization of
the Petroleum Exporting Countries (OPEC) and allies considering easing output
cuts next year weighed on oil prices. An increase in US drilling activity and a
deal between Kuwait and Saudi Arabia to renew crude output along their border
pressured prices amid thin trading conditions. Kuwait and Saudi Arabia are
likely to sign an agreement to resume oil output in the neutral zone on
Tuesday. Benchmark crude oil futures for February gained 8 cents or 0.1 percent
to settle at $60.52 a barrel on the New York Mercantile Exchange. February
Brent added 25 cents or 0.4 percent to settle at $66.39 a barrel on London's
Intercontinental Exchange.
Indian
rupee ended marginally lower against US dollar on Monday, due to fresh demand
for the American currency from banks and importers. Traders remained cautious
with Assocham president Niranjan Hiranandani's statement that the economy is
facing a liquidity problem and demand recession, and it requires measures to
lift consumption, including reduction in goods and services tax and personal
income tax and improved credit flow, to revive. Some anxiety also came with
International Monetary Fund (IMF) chief economist Gita Gopinath's statement
that while it was anticipated that India's growth will slow down, the current
numbers come as a shocker with a sharp decline in both investment and
consumption. Besides, lackluster trade in local equity markets weighed on the
rupee. On the global front, dollar stood near two-week highs on Monday after
the release of decent US economic data late last week, while sterling's brief
recovery hit the buffers. Finally, the rupee ended at 71.18, 6 paise weaker
from its previous close of 71.12 on Friday.
The
FIIs as per Monday'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
9632.52 crore against gross selling of Rs 9160.20 crore, while in the debt
segment, the gross purchase was of Rs 1206.77 crore with gross sales of Rs
4407.21 crore. Besides, in the hybrid segment, the gross buying was of Rs 40.15
crore against gross selling of Rs 41.41 crore.
The US markets ended higher on
Monday on the heels of report that China's Finance Ministry has announced plans
to lower tariffs on a range of products, including frozen pork, pharmaceuticals
and some high-tech components. Asian markets are trading mixed on Tuesday
despite overnight gains on Wall Street. Indian markets ended a range-bound
session slightly lower on Monday dragged by energy and FMCG stocks. Today, the
markets are likely to make flat-to-negative start as investors are likely to
avoid making big bets ahead of the Christmas holiday and the expiration of
near-month derivative contracts. There will be some cautiousness on report that
the International Monetary Fund (IMF) has retained India's economic growth
forecast at 6.1 per cent for FY20, but said risks to the outlook are tilted to
downward side. It added that India needs to consolidate its finances by curbing
expenditure and boosting taxes to trim its debt. However, some support may come
with report that to protect consumers interest, the Reserve Bank of India (RBI)
has said that on a peer-to-peer lending (P2P) platform the permissible exposure
of a lender to all borrowers should not exceed Rs 50 lakh at any given point of
time. Traders may take note of Industry chamber PHDCCI's statement that the
definition of micro, small and medium enterprises (MSMEs) on the basis of
turnover will help in promoting the ease of doing business as the process of
identification and dealings with such entities will become simpler and faster.
Besides, the RBI has purchased Rs 10,000 crore worth of long-term government
securities and sold Rs 6,825 crore of four short-term securities through the
special open market operations (OMOs). There will be some buzz in the metal
socks with Union minister Dharmendra Pradhan's statement that the government
will soon come out with a white paper on steel industry that will focus on ways
to reduce the tax-related expenditure in the sector and make it competitive.
There will be some reaction in power stocks with report that the Power Ministry
has scrapped the auction to procure 2,500 MW electricity for medium term (three
years) under a scheme to provide relief to thermal power plants plagued by
short coal supplies.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
12,262.75
|
12,221.62
|
12,295.52
|
BSE Sensex
|
41,642.66
|
41,510.97
|
41,737.98
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
2,767.77
|
49.65
|
48.13
|
51.73
|
SBI
|
301.50
|
332.40
|
328.88
|
337.38
|
Tata Motors
|
271.92
|
176.05
|
173.80
|
178.65
|
ZEEL
|
207.72
|
294.80
|
286.80
|
299.60
|
ITC
|
190.82
|
238.90
|
237.43
|
241.58
|
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