Bulls went
brisk on Dalal Street on Monday, with frontline gauges logging new record highs
for yet another day, ending just shy of their crucial 11,700 (Nifty) and 38,700
(Sensex) levels. After a gap-up opening, there appeared not even an iota of
profit booking in the session with benchmarks fervently gaining from strength
to strength to end near intraday highs, as investors continued hunt for
fundamentally strong stocks. Markets started the session on an optimistic note
with report that former Niti Aayog vice-chairman Arvind Panagariya opined that
rupee depreciation was long overdue, saying appreciated currency had hurt the
country's exports. He further said India's macroeconomic management is sound
and there was no reason to worry. Besides, the government is looking to
complete nearly three-fourths of its disinvestment target by the end of
December and has a pipeline of about 15 companies in which it will sell stakes
to achieve this interim goal. Investors took encouragement with private report
that India's twin deficit and inflation are at a far more comfortable position
than in 2013. Markets extended gains after Finance Minister Arun Jaitley said
that a series of reforms taken by the government transformed the weak economy.
He also said that the reform measures has substantially cleaned up the system
and made it more transparent, noting that decisiveness has led to easier
decision-making and made the economy stand out before several other countries.
Besides recent fall in oil prices and strong foreign portfolio investors' (FPI)
inflows will also support the domestic currency. Foreign investors have pumped
in a little over Rs 6,700 crore into the Indian capital markets so far this
month on improvement on the macro front, better corporate earnings and
correction in the mid and small-cap space. Some support came in with a report
stating that India and Singapore have signed the Second Protocol amending the
Comprehensive Economic Cooperation Agreement (CECA) in order to boost bilateral
trade. Besides, a private report highlighted that the Centre has lined up plans
to raise a massive Rs 1.7 lakh crore via the extra-budgetary resources (EBR)
route in the current fiscal, up 110% from FY18. Finally, the BSE Sensex surged
442.31 points or 1.16% to 38,694.11, while the CNX Nifty was up by 134.85
points or 1.17% to 11,691.95.
Magnifying their last session's
gains, the US markets ended higher on Monday with the S&P 500 and the
Nasdaq closing at records for a second straight session as President Donald
Trump confirmed reports the US has reached a preliminary trade deal with
Mexico. The US and Mexico reached an agreement to enter into a new trade deal
as President Donald Trump announced that he wants to drop the name North
American Free Trade Agreement from an existing deal that includes Canada. The
president said the new deal would be called the United States-Mexico Trade
Agreement rather than NAFTA. Meanwhile, Trump indicated the US would soon begin
negotiations with Canada but suggested that any agreement could be a separate
deal. Besides, it is the first time the Nasdaq traded above 8,000, taking the
tech-laden index 164 trading days to rise 1,000 points from 7,000. It marks the
second 1,000-point advance for the Nasdaq this year, something that has not
happened since 1999. On the economic front, a measure of the US economy from
the Chicago Federal Reserve slowed in July from June's robust performance, owed
in large part to lighter output at the nation's factories. The Chicago Fed's
index of national economic activity registered at a positive 0.13 last month,
down from an upwardly revised positive 0.48 in June. Dow Jones Industrial
Average surged 259.29 points or 1.01 percent to 26049.64, the S&P 500 rose
22.05 points or 0.77 percent to 2896.74 and Nasdaq was up by 71.92 points or
0.91 percent to 8017.90.
Crude oil
futures closed higher on Monday, sticking to a tight trading range as a
committee of Organization of the Petroleum Exporting Countries (OPEC) and
non-OPEC producers reportedly revealed further progress in easing output curbs,
as expected. Meanwhile, the Joint Ministerial Monitoring Committee said that
countries participating in the oil production-cut pact that was implemented at
the start of 2017 fell to 109% in July. Renewed US sanctions on Iran are also
set to weigh on global supply. Benchmark crude oil futures for October gained
15 cents or 0.2 percent to settle at $68.87 a barrel on the New York Mercantile
Exchange. October Brent crude added 39 cents or 0.5 percent at $76.21 a barrel
on London's Intercontinental Exchange.
Indian rupee depreciated against
the American currency on Monday. Rupee weakened with Reserve Bank of India's
(RBI) data showing that India's foreign exchange (Forex) reserves slipped by
$33.2 million during the week ended August 17. Traders also remain concerned
with a private report stating that high borrowing costs and weakness in rupee
is expected to impact corporates, while uncertainties in the global market has
the potential to derail the global growth story. However, Former Niti Aayog's vice-chairman
Arvind Panagariya's statement that rupee depreciation is not cause to worry and
it was pending for a long time, failed to provide any support to rupee. On the
global front, the dollar remained under some pressure after the head of the
Federal Reserve suggested it would not speed up its pace of lifting interest
rates. Finally, the rupee ended at 70.15, 24 paise weaker from its previous
close of 69.91 on Friday.
The FIIs as per Monday'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 4469.76 crore against gross
selling of Rs 4524.51 crore, while in the debt segment, the gross purchase was
of Rs 1036.44 crore with gross sales of Rs 1019.10 crore. Besides, in the
hybrid segment, the gross buying was of Rs 0.30 crore against gross selling of
Rs 0.33 crore.
The US markets ended higher on
Monday as the United States and Mexico closed a new trade deal, potentially
removing a source of uncertainty that had been plaguing investors for months.
Asian markets were trading in green in early deals on Tuesday amid hopes global
tariff tensions were abating as the United States and Mexico made a deal to
overhaul the North American Free Trade Agreement. Indian stock markets, after a
day's breather, resumed their record-setting rally to scale new peaks on Monday
supported by strong global cues after Powell's comment on fed rates. Today, the
markets are likely to make an optimistic start as traders will be getting some
encouragement with Economic policy think-tank, the National Council of Applied
Economic Research (NCAER) in its latest report retaining India's growth
forecast for the current fiscal at 7.4%, citing comfortable agricultural sector
outlook and a marked improvement in the external sector. There will be some
support with the Department of Industrial Policy and Promotion's (DIPP) latest
data showing that foreign direct investment (FDI) in India grew by 23% to
$12.75 billion during the April-June quarter of 2018-19, as compared to foreign
fund inflows of $10.4 billion in April-June 2017-18. Traders will also be
reacting to Commerce Minister Suresh Prabhu's statement that the government is
working on a comprehensive strategy to double the country's exports by 2025.
Traders may take note of finance minister Arun Jaitley's statement that the
desire to achieve a high growth rate must be accompanied by strong
macroeconomic fundamentals. Meanwhile, India has initiated probe into alleged
dumping of a certain type of steel imported from Brazil, China and Germany
following a complaint BY a domestic player. However, there may be some
cautiousness with SBI research report stating that the country's current
account deficit (CAD) is likely to touch 2.8% of GDP in the current financial
year on surge in crude oil prices and moderate growth in exports. Besides,
there will be some buzz in power sector stocks with a report that the Finance
Ministry may soon hold talks with the Reserve Bank of India to resolve issues faced
by the power sector.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,691.95
|
11,624.72
|
11,730.07
|
BSE Sensex
|
38,694.11
|
38,494.93
|
38,815.08
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
SBI
|
281.12
|
308.00
|
304.08
|
311.13
|
ICICI Bank
|
280.84
|
339.90
|
333.13
|
344.48
|
Hindalco Industries
|
135.24
|
230.25
|
226.43
|
232.53
|
Axis Bank
|
98.19
|
650.20
|
644.30
|
653.80
|
Yes Bank
|
95.63
|
383.00
|
378.45
|
386.10
|
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