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NSE Intra-day chart (28 November 2018)
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Market Commentary 29 November 2018
Markets to make optimistic start on firm global cues


 

Indian equity bourses logged strong gains on Wednesday to continue northward rally for straight third session, on the back of covering-up of pending short positions ahead of November F&O expiry on Thursday. The markets made a cheerful start, taking support with a report that the Reserve Bank of India (RBI) Governor Urjit Patel told law makers that the note ban's impact was transient and the economy is robust. He said the economy would get a boost from oil prices cooling off from four-year highs and asserted that the fundamentals were robust. Adding enthusiasm among the traders, banks credit flow to commercial sector has gone up by 15.6% on year-on-year basis, registering highest growth since demonetisation. According to the fortnightly data released by the RBI, the adjusted non-food bank credit stood at Rs 97.32 lakh crore as on November 9, 2018 as compared to Rs 84.22 lakh crore reported in the year-ago fortnight. The trade remained positive throughout the session, following positive global markets. Investors reacted positively to the Commerce and Industry Minister Suresh Prabhu's statement that he has taken up the issue of declining credit to exporters with the finance ministry to ensure adequate availability of funds to them. The street got comfort with a private report stating that Indian analytics, data science and big data industry is estimated to be $2.71 billion in revenues and growing at a healthy rate of 33.5% CAGR.  Some relief also came with Finance Minister Arun Jaitley stating that as many as 3 lakh poor people have benefited from Ayushman Bharat health scheme in the last one-and-a-half months. Meanwhile, the RBI has decided to inject a higher amount of Rs 40,000 crore through purchase of government securities under open market operations (OMOs) in December 2018. Finally, the BSE Sensex surged 203.81 points or 0.57% to 35,716.95, while the CNX Nifty was up by 43.25 points or 0.40% to 10,728.85.

 

The US markets ended sharply higher on Wednesday, with the Dow Jones Industrial Average surging more than 600 points, on the heels of Federal Reserve Chairman Jerome Powell's remarks in a speech to the Economic Club of New York that were interpreted as dovish for interest rates. Powell said that interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy- that is, neither speeding up nor slowing down growth. Meanwhile, economic growth in the US was unrevised in the third quarter, according to the second reading released by the Commerce Department. The report said real gross domestic product jumped by 3.5% in the third quarter, unrevised from the initial estimate and in line with street estimates. Upward revisions to non-residential fixed investment and private inventory investment were offset by downward revisions to consumer spending and state and local government spending. The Commerce Department said consumer spending, which accounts for about 70% of the economy, surged up by 3.6% compared to the previously reported 4.0% spike. However, new home sales in the US showed a substantial decrease from an upwardly revised level in the month of October, according to a report released by the Commerce Department. As per the report, new home sales plummeted by 8.9% to an annual rate of 533,000 in October from an upwardly revised rate of 597,000 in September. Dow Jones Industrial Average surged 617.70 or 2.50 percent points to 25366.43, S&P 500 gained 61.62 points or 2.30 percent to 2743.79 and Nasdaq was up by 208.89 points or 2.95 percent to 7291.59.

 

Crude oil futures ended lower for second straight-day on Wednesday, sending US prices sliding toward $50 a barrel on the back of a 10th straight weekly rise in US crude stockpiles. The Energy Information Administration reported that domestic crude supplies rose by 3.6 million barrels for the week ended November 23. That followed weekly increases over each of the past nine weeks. The string of 10 increases is the longest run since autumn 2015. Both benchmarks marked their lowest finish for a front-month contract since October 2017. Benchmark crude oil futures for January declined $1.27 or 2.5 percent to settle $50.29 a barrel on the New York Mercantile Exchange. January Brent crude dropped $1.45 or 2.4 percent to settle at $58.76 a barrel on London's Intercontinental Exchange.

 

Indian rupee appreciated against the American currency due to selling of dollar by exporters as well as banks. Rupee was moving in a narrow range with traders looking ahead to important G20 meeting scheduled during this weekend. Some support came with report that the Reserve Bank of India (RBI) has decided to inject a higher amount of Rs 40,000 crore through purchase of government securities under open market operations (OMOs) in December 2018. Rupee sentiments were also buoyed with a report that the RBI Governor Urjit Patel told law makers that the note ban's impact was transient and the economy is robust. He said the economy would get a boost from oil prices cooling off from four-year highs and asserted that the fundamentals were robust.  Besides, strong gains in local equity markets also aided the currency's appreciation. On the global front, the dollar rose versus most of its major peers, as concerns about Sino-U.S. trade tensions propped up safe haven currencies and as investors awaited cues from the US Federal Reserve on the path of future interest rate increases. Finally, the rupee ended at 70.62, 17 paise stronger from its previous close of 70.79 on Tuesday.

 

The FIIs as per Wednesday'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 5536.04 crore against gross selling of Rs 4859.67 crore, while in the debt segment, the gross purchase was of Rs 1052.82 crore with gross sales of Rs 1338.53 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.87 crore against gross selling of Rs 0.93 crore.

 

The US markets extended gains on Wednesday on the heels of Federal Reserve Chairman Jerome Powell's remarks in a speech to the Economic Club of New York that were interpreted as dovish for interest rates. Asian markets were trading mostly in green on Thursday tracking a Wall Street rally as comments from Jerome Powell boosted investor sentiment towards riskier assets. Indian markets extended their gains for third straight session on Wednesday on positive global cues. Besides, buying in IT stocks such as TCS and Infosys also supported the markets. Today, the markets are likely to make gap-up opening of November future and options (F&O) expiry session on firm global cues as the US Federal Reserve Chair Jerome Powell's comment boosted investors' sentiments. Traders will be getting some encouragement with Union Minister Suresh Prabhu's statement that the commerce and industry ministry is preparing an action plan for implementing the proposed new industrial policy, aimed at promoting manufacturing and economic growth of the country. Traders will also be reacting to a private report that the Reserve Bank of India (RBI) may have to conduct open market operations (OMOs) of another Rs 1,60,000 crore in the fourth quarter of the current fiscal to tide over the banking liquidity crisis. Meanwhile, the RBI's data showed that India Inc's foreign borrowings dipped nearly 66% to $1.41 billion in October this year. Moreover, Finance Minister Arun Jaitley will present the interim Budget for 2019-20 fiscal on February 01, 2019. There will be some buzz in the banking sector stocks with Fitch Ratings' stating that the decision to restructure loans of up to Rs 25 crore for the MSME sector is a step backwards and the risks to the banking sector will manifest in the next 6-9 months.

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

10,728.85

10,699.87

10,757.82

BSE Sensex

35,716.95

35,607.47

35,824.29

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

1,407.20

162.10

154.60

175.30

IOC

204.51

134.05

132.25

137.05

SBI

198.38

284.55

280.88

290.33

ICICI Bank

181.63

359.00

354.32

362.62

Infosys

177.20

666.40

648.03

676.73

 

  • Tech Mahindra has received an order of Rs 270 crore project from Coal India to deploy modern technologies in the state-owned company. It will span over period of five years. 
  • Hero MotoCorp has renewed its association with the globally admired, Golfing great Tiger Woods.  
  • HDFC Bank has launched its next-gen mobile banking application that provides improved security features like biometric and facial recognition based log-in. 
  • Reliance Industries' wholly owned subsidiary -- Reliance Industrial Investments and Holdings has invested in New Emerging World of Journalism.
News Analysis