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NSE Intra-day chart (29 November 2018)
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Market Commentary 30 November 2018
Markets to make a mildly positive start; GDP data eyed

 

Indian equity benchmarks ended November F&O series on strong note on Thursday, with Sensex and Nifty rallying for the fourth day. The start of day was fabulous, as traders reacted positively 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. Domestic sentiments remained optimistic, after Commerce and Industry Minister Suresh Prabhu said that the government is taking several steps, such as reducing regulatory burden and ensuring availability of adequate funds, for budding entrepreneurs to promote startup ecosystem in the country. Some comfort also came with private report stating that the RBI won't raise interest rates until at least April, much later than thought just one month ago and rise will probably be a one-and-done. The key indices maintained their gaining momentum throughout the session to end near their intraday high points, aided by positive cues from global markets. In late noon deals, the street took note of Niti Aayog Vice-Chairman Rajiv Kumar's statement that India will have to undertake more reforms and try harder to grow at over 8%. He also pointed out that the government needs to invest more in the country's statistical system. But, investors paid no heed towards reports that Former Chief Economic Advisor Arvind Subramanian called demonetisation a massive, draconian, monetary shock that slowed economic growth to average 6.8% in the seven quarters following the move as against the 8% average growth recorded in six quarters before it. Meanwhile, the RBI's data showed that India Inc's foreign borrowings dipped nearly 66% to $1.41 billion in October this year. Finally, the BSE Sensex surged 453.46 points or 1.27% to 36,170.41, while the CNX Nifty was up by 129.85 points or 1.21% to 10,858.70.

 

Snapping three-day gaining streak, the US markets closed marginally lower on Thursday as investors concerned about the approaching trade negotiation meeting between the US and China on December 01. Further, sentiments were also downbeat following the release of some disappointing economic data, including a report from the National Association of Realtors (NAR) unexpectedly showing a substantial decrease in pending home sales in the month of October. The NAR said its pending home sales index plunged by 2.6% to 102.1 in October after climbing by 0.7% to an upwardly revised 104.8 in September. With the steep drop, the index fell to its lowest level since mid-2014. The sharp pullback surprised participants, who had expected pending home sales to rise by 0.5%, matching the increase originally reported for the previous month. The Labor Department released a report showing initial jobless claims unexpectedly rose to a six-month high in the week ended November 24. The report said initial jobless claims climbed to 234,000, an increase of 10,000 from the previous week's unrevised level of 224,000. Street had expected jobless claims to edge down to 220,000. Meanwhile, the Fed minutes from the central bank's November meeting showed that almost every member of the Federal Open Market Committee felt comfortable with raising interest rates fairly soon as long as job market and inflation data were in line with expectations, bolstering expectations of another rate hike in December. Dow Jones Industrial Average declined 27.59 points or 0.11 percent to 25338.84, S&P 500 lost 6.03 points or 0.22 percent to 2737.76 and Nasdaq was down by 18.51 points or 0.25 percent to 7273.08.

 

Crude oil futures ended higher on Thursday, bouncing back from an earlier decline that dragged the US benchmark below $50 a barrel for the first time since October 2017.  The oil prices bounce came after a private report that Russia is increasingly convinced it needs to cut oil output alongside members of the Organization of the Petroleum Exporting Countries (OPEC), though it continues to bargain with Saudi Arabia over the specifics of any coordinated reduction ahead of a meeting of OPEC members and its allies next week. Benchmark crude oil futures for January rose $1.16 or 2.3 percent to settle $51.45 a barrel on the New York Mercantile Exchange. January Brent crude gained 75 cents or 1.3 percent to settle at $59.51 a barrel on London's Intercontinental Exchange.

 

Indian rupee strengthened further to hit a fresh three-month high against the US dollar on Thursday, tracking gains in its Asian peers after comments by Federal Reserve Chairman Jerome Powell.  Sentiments remained up-beat with private report stating that the RBI won't raise interest rates until at least April, much later than thought just one month ago and rise will probably be a one-and-done. Traders also took note of Niti Aayog Vice-Chairman Rajiv Kumar's statement that India will have to undertake more reforms and try harder to grow at over 8%. He also pointed out that the government needs to invest more in the country's statistical system. Besides, good going in the local equity markets coupled with softening crude oil price revived forex market sentiments. On the global front, pound sank on Thursday amid concerns about the UK parliament's vote on Brexit and after the Bank of England warned of risks to the currency if Britain leaves the European Union in a disorderedly manner. Finally, the rupee ended at 69.85, 77 paise stronger from its previous close of 70.62 on Wednesday.

 

The FIIs as per Thursday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 6484.81 crore against gross selling of Rs 5342.74 crore, while in the debt segment, the gross purchase was of Rs 1322.74 crore with gross sales of Rs 615.52 crore. Beside, in the hybrid segment, the gross buying was of Rs 0.86 crore against gross selling of Rs 1.04 crore.

 

The US markets ended lower on Thursday as participants weighed up the outlook for Federal Reserve policy and looked nervously towards the forthcoming G20 summit in Argentina. Asian markets were trading mixed on Friday as investors await a crucial meeting between the US and Chinese presidents with the course of the trade war at stake. Indian markets ended Thursday's trading session with notable gains for fourth straight day, as strong rupee and dovish comments from US Federal Reserve Chairman Jerome Powell boosted sentiments. Today, the start of last trading day of the month is likely to be marginally in green as investors will be looking ahead to Gross Domestic Product (GDP) data for the September quarter due later in the day for clues on the strength of domestic economy. Traders will be getting some encouragement with economic policy think-tank the National Council of Applied Economic Research's (NCAER) report stating that Indian economy is projected to grow at 7-7.4 per cent in the current fiscal. It added that the real agriculture Gross Value Added (GVA) is envisaged to grow at 3 per cent and real industry GVA at 7 per cent in 2018-19. As per the report, the forecast for Gross Value Added (GVA) at basic prices is 7.0-7.4 per cent. These forecasts at constant (2011-12) prices are based on NCAER's annual GDP macro model. Also, there will be some support with a report that the Reserve Bank of India (RBI) on November 29 relaxed rules for non-banking financial companies (NBFCs) to sell or securitise their loan books, in a bid to ease persistent stress in the sector. NBFCs can now securitise loans of more than five-year maturity after holding those for six months on their books. Meanwhile, Niti Aayog Vice-Chairman Rajiv Kumar said that India will have to undertake more reforms and try harder to grow at over 8 per cent. He also pointed out that the government needs to invest more in the country's statistical system. There will be some buzz in the banking sector stocks with the RBI's statement that Net Stable Funding Ratio (NSFR) norms that mandate banks to maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities will be operational from April 2020. The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

10,858.70

10,799.68

10,900.38

BSE Sensex

36,170.41

35,993.15

36,300.76

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

2,920.43

160.45

149.13

169.38

ICICI Bank

386.93

362.20

359.47

365.67

ONGC

289.91

140.60

137.53

143.78

SBI

279.19

286.40

283.88

289.28

NTPC

256.06

142.25

140.15

145.05

 

  • Maruti Suzuki's Baleno a premium hatchback has marked another milestone by achieving 5 lakh sales in a record time of just 38 months. 
  • Tata Motors' wholly owned subsidiary -- JLR -- has won the backing of the UK government's 25-million Pounds grant intended to accelerate the development of innovative low-carbon vehicle technologies. 
  • ICICI Bank is planning to grow its retail loan portfolio in Tamil Nadu by over 40% to Rs 13,000 crore during FY19. 
  • Bajaj Auto has launched an upgraded version of its 150 cc bike Pulsar 150 Neon priced at Rs 64,998.
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