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NSE Intra-day chart (27 December 2019)
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Market Commentary 30 December 2019
Markets to get a cautious start following weak cues in other Asian trade

 

After 3 days of poor run, Indian equity bourses resumed their gaining rally on Friday, with Sensex & Nifty rising around a percent each. Indices made a firm start, as Reserve Bank announced simultaneous purchase and sale of government securities through special open market operations for Rs 10,000 crore each on December 30 following a review of liquidity situation. Adding some relief, ICRA said that aided by better recoveries and declining slippages, overall net non-performing assets (NPAs) of the banking sector are likely to improve to 3.2-3.3 per cent by the end this fiscal from 3.7 per cent in September 2019. Bulls held their tight grip on the Dalal Street in the second half of the trading session, on account of positive cues from the global markets. Market participants remained positive with Food & Agriculture Organisation's (FAO) latest data showing  that select agri and agri-based commodities such as meat, milk and fruits, among others, present export opportunity worth over $97 billion (about Rs 6.9 lakh crore) for India. The street paid no heed towards a private report indicating that the government could miss its FY20 divestment target by as much as Rs 50,000 crore. Finally, the BSE Sensex gained 411.38 points or 1.00% to 41,575.14, while the CNX Nifty was up by 119.25 points or 0.98% to 12,245.80.

 

The US markets ended mostly higher on Friday amid reports that US and China reached an agreement on a phase one trade deal has helped lift some of the uncertainty hanging over the markets. However, buying interest remained somewhat subdued as the details of the deal are still unknown and the trade dispute between the US and China will persist even after the agreement is signed. As the same time, the somewhat stifled nature of the rally has made traders reluctant to take profits amid concerns about missing out on any further upside. Many traders remained away from their desks following the Christmas holiday on Wednesday and the New Year's Day holiday next Wednesday. A lack of major US economic data also kept traders on the sidelines as they attempt to deduce what is in store for the economy in the New Year. Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets.

 

Crude oil futures ended marginally higher on Friday after a report showed a bigger-than-expected decline in US stores of crude and its byproducts. The Energy Information Administration (EIA) reported that US crude supplies fell by 5.467 million barrels for the week ended December 20. Analysts polled by S&P Global Platts had forecast a decrease of 3 million barrels, although the less closely followed American Petroleum Institute report showed a 7.9 million-barrel tumble on Tuesday. EIA data also showed supply increases of 1.963 million barrels for gasoline stocks and a decline of roughly 152,000 barrels for distillates. Crude oil futures for February added 4 cents or less than 0.1 percent to settle at $61.72 a barrel on the New York Mercantile Exchange. February Brent gained 24 cents or 0.4 percent to settle at $68.16 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended marginally lower against US dollar on Friday, due to fresh demand for the American currency from banks and importers. Traders remained cautious with private report indicating that the government could miss its FY20 divestment target by as much as Rs 50,000 crore. Traders also took a note of the International Monetary Fund (IMF) raised doubts over India's methodology to calculate gross domestic product (GDP) numbers, saying certain changes to historical series and discrepancies between GDP by activity and GDP by expenditure have made the growth calculation process complex. However, strong gains in the domestic equity markets capped the rupee losses. On the global front, dollar hovered near a six-month high versus the Japanese yen on Friday, buoyed by easing Sino-US trade tensions. Finally, the rupee ended at 71.35, 4 paise weaker from its previous close of 71.31 on Thursday.

 

The FIIs as per Friday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 2830.57 crore against gross selling of Rs 2699.09 crore, while in the debt segment, the gross purchase was of Rs 2705.18 crore with gross sales of Rs 236.80 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.42 crore against gross selling of Rs 1.35 crore.

 

The US markets ended mixed on Friday as many traders remained away from their desks following Christmas. Asian markets were trading lower in early deals on Monday from the highest level in a year and a half, with few financial-market catalysts going into the year-end. Indian equity markets snapped their three-session losing streak on Friday to end at a gain of one percent as investors bought into banking, energy and auto stocks. Today, the start is likely to remain cautious following weak cues in other Asian trade. Traders will remain concern on report that the Reserve Bank of India has flagged falling government revenue as a threat to the overall fiscal numbers -- with tax and non-tax revenues lagging way behind targets -- saying this along with weaker private consumption and investment could prove to be a challenge. Trades may take note with Commerce Secretary Anup Wadhawan's statement that the continuous contraction in India's exports is likely to stop next year but the rate of growth will be subdued on account of the uncertain global trade situation due to rising protectionism. Also, Niti Aayog distinguished fellow Ramgopal Agarwala said the country's economy is going through a difficult situation but not in a crisis. The reforms like demonetisation, Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC) were required but hastily implemented. However, traders may get some support with industry body CII's statement that India's economy is expected to rebound in 2020 on the back of measures taken by the government and the RBI coupled with easing of global trade tensions. Meanwhile, the Reserve Bank of India (RBI) in latest data has stated that the country's foreign exchange reserves increased by $456 million to a fresh lifetime high of $454.948 billion in the week to December 20. In the previous week, the reserves had swelled by $1.070 billion to $454.492 billion. In the reporting week, the rise in reserves was mainly on account of an increase in foreign currency assets, a major component of the overall reserves, which surged by $311 million to $422.732 billion. There will be some reaction in non-banking financial companies (NBFCs) stocks as RBI in its Financial Stability Report has said that Non-bank lenders witnessed stress in their asset quality in the first half of the current fiscal, with gross NPA ratio increasing to 6.3 per cent in September 2019 from 6.1 per cent in March. However, the net NPA ratio of NBFCs remained steady at 3.4 per cent between end-March 2019 and end-September 2019.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

12,245.80

12,182.98

12,283.53

BSE Sensex

41,575.14

41,356.28

41,702.63

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

1,549.57

48.00

47.18

49.28

State Bank of India

334.77

337.25

334.05

339.40

Vedanta

126.36

151.75

150.23

153.08

Zee Entertainment Enterprises

124.51

299.00

295.13

303.88

Tata Motors

120.96

176.15

175.02

177.12

 

 

  • Bharti Airtel's subsidiary -- Airtel Payments Bank has started NEFT facility for its customers on 24x7 basis, in-line with the RBI guidelines.
  •  SBI is going to introduce OTP based cash withdrawal system to help protect its customers from unauthorised transactions at ATMs.
  •  ZEE5, a video on demand website run by Zee Entertainment Enterprises, has unveiled a new Progressive Web App, in order to increase the web reach of the service.
  •  HDFC has filed an application to list Commercial Paper at BSE for an Issue Size of Rs 1,000 crore.
News Analysis