Indian equity markets concluded
the fresh week on a depressing note, tracking weak global cues as US President
Donald Trump's failure on healthcare reform, raised questions about his ability
to push through tax cuts and fiscal spending to boost the economy. The focus
also remains on Brexit-related events ahead of the British government's planned
triggering of Article 50 this week. On the domestic front, sentiments were
undermined by Skymet Weather prediction that monsoon 2017 would be below normal
with error margin of plus and minus 5%. Between June and September, which is
the monsoon season in India, rainfall is forecast to be at 95% of the long
period average of 887 mm. About 70% of India's rainfall happens in this period
and irrigates almost half of India's farmland, being of particular importance
for Kharif crops. There is a fifty percent chance of an El Nino developing in
the second half of the monsoon season, which translates into deficit rainfall
in the months of July. Although expectations about roll out of the Goods and
Services Tax from July 1, 2017 appear to be limiting the market's downside, the
mood is quite cautious with investors looking ahead to the reporting season
that is just a few sessions away. Meanwhile, aviation stocks gained traction
after the report that India has become the third largest aviation market in
terms of domestic passenger traffic. India's domestic air passenger traffic
stood at 100 million in 2016 and was behind only the US (719 million) and China
(436 million). Further, PSU Bank gained as Finance Minister Arun Jaitley last
week said that the government, in tandem with the RBI, is working on a radical
proposal to resolve the issue of bad loans in the banking system. Finally, the
BSE Sensex decreased 184.25 points or 0.63% to 29,237.15, while the CNX Nifty
was down by 62.80 points or 0.69% to 9,045.20.
The US markets closed mostly
lower on Monday, as investors reassessed the prospects for President Donald
Trump's ambitious economic agenda after a Republican plan to repeal and replace
Obamacare was scrapped last week. The failure of the health-care bill, Trump's
first major legislative test as president, raised questions about his ability
to push bills through Congress, as well as the unity of the Republican
coalition. Markets have rallied since the election on the hope that Trump's
economic proposals - including on taxes and regulation - would accelerate
economic growth, and those gains could be at risk if no legislation
materializes, especially with stock valuations at lofty levels. Meanwhile,
Chicago Federal Reserve Bank President Charles Evans said that the case for
four interest rate hikes in the United States this year is not yet solid and
would require a stronger lift in inflation. The Dow Jones Industrial Average
lost 45.74 points or 0.22 percent to 20,550.98, S&P 500 dropped 2.39 points
or 0.10 percent to 2,341.59, while the Nasdaq was up 11.63 points or 0.20
percent to 5,840.37.
Crude oil futures extending their
losses declined further on Monday, on concerns about the lingering global
supply glut. Traders even overlooked the report that OPEC and certain non-OPEC
nations are looking to extend their six month supply quota agreement until the
end of the year. But concerns over a glut in US inventories, continued to weigh
on sentiment, investors fear that the sharp increase in US crude and shale
production could dampened OPEC's efforts to rebalance supply and demand in the
industry. Benchmark crude oil futures for May delivery declined by $0.24 or 0.5%
to $47.73 on the New York Mercantile Exchange. In London, Brent crude for May
delivery ended lower by $0.8 at $50.84 on the ICE.
Continuing
its rising streak for the second straight day, Indian rupee ended considerably
stronger against dollar on Monday due to sustained selling of the US currency
by exporters and banks. Local currency got some support with Finance Minister
Arun Jaitley last week said that the government, in tandem with the Reserve
Bank of India, is working on a radical proposal to resolve the issue of bad
loans in the banking system. These will help to attract more foreign
investments in the country. As per the provisional data released by the stock
exchanges, foreign portfolio investors (FPIs) bought shares worth Rs 543.35 crore
on last Friday. However, heavy losses in the domestic equity market capped the
rupee gains. On the global front, U.S. dollar fell to its lowest level against
yen since late November as the House Republicans' failure to pass its
long-promised health-care bill gave investors another cue to buy other major
currencies. Finally, the rupee ended at 65.04, 37 paise stronger from its
previous close of 65.41 on Friday.
The
FIIs as per Monday's data were net buyers in equity and debt segments both. In
equity segment, the gross buying was of Rs 5359.81 crore against gross selling
of Rs 4776.19 crore, while in the debt segment, the gross purchase was of Rs
1472.39 crore with gross sales of Rs 557.66 crore.
The US markets continued their
consolidation mood and the major averages spent the day bouncing back and forth
across the neutral line, amid weakness overseas following the decision by
Republican leaders to withdraw their bill to repeal and replace Obamacare. The
Asian markets have made mostly a positive start led by the Japanese market
which is up by over a percent, as investors assessed the US administration's
ability to enact reform. The dollar steadied, weighed down by the chance of
slower inflation necessitating less need for quicker interest-rate increases. The
Indian markets suffered sell-off on the very first day of the F&O series
expiry and the major benchmarks deposed over half a percent with selling
intensifying in bluechips. Today, the start is likely to be in green and some
recovery can be seen on supportive global cues. Traders will also be getting
some support with the government working under a self-imposed July 1 deadline
for the goods and services tax (GST) roll-out, tabling four Bills related to
the proposed comprehensive indirect tax in Parliament for passage, among other
things, the legislation provides for a peak GST rate of 40% and setting up of
an authority to protect consumers from profiteering by businesses. There will
be some concern too, as the private forecaster Skymet has said India is likely
to receive below-normal rainfall this year owing to an evolving El NiƱo. If the
forecast turns out to be accurate, it could prove worrisome for the economy.
Traders will also be eyeing the movement of rupee, which has been on a rising
streak and touched 17 months high in last session. Meanwhile, RBI's Deputy
Governor S S Mundra has said that the central bank don't target a particular
range for the rupee. What it always do is to curb the undue volatility in the
(forex) market.
Support and Resistance: NSE
(Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9045.20
|
9014.95
|
9085.15
|
BSE Sensex
|
29237.15
|
29126.89
|
29384.05
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
Bank of Baroda
|
240.32
|
172.30
|
168.83
|
174.48
|
IDEA
|
231.64
|
87.60
|
85.90
|
90.10
|
Hindalco
|
169.88
|
188.70
|
186.02
|
192.97
|
SBI
|
159.66
|
279.45
|
276.17
|
281.77
|
ITC
|
121.55
|
281.60
|
277.63
|
284.23
|
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