Indian equity bourses ended in
red for yet another trading session. The start of the day was positive, amid
report that the government has stayed with the borrowing plan for the fiscal,
as announced in the budget, sending a strong signal that it will try and meet
the fiscal deficit target despite a sharp cut in corporate tax rate that is
expected to cost Rs 1.45 lakh crore. But, soon key indices turned volatile, as
India's manufacturing activity remained unchanged in September 2019, hit by
subdued demand conditions domestically and externally. As per the survey
report, the Nikkei India Manufacturing Purchasing Managers' Index (PMI) was at
51.4 in September, unchanged from August. Markets extended their losses in the
last hours of the trade. Sentiments got impacted with the Commerce and Industry
Ministry's data showing that the eight core industries in August contracted to
over three-and-half year low of 0.5%, due to decline in output of coal, crude
oil, natural gas, cement, and electricity. Adding more worries among traders,
the RBI's data showed that the country's external debt stood at $557.4 billion
in the June quarter, an increase of $14.1 billion over the quarter ended March
2019. Separately, a survey of World Economic Forum business leaders showed that
the possibility of a fiscal crisis is the biggest risk to doing business
globally. Finally, the BSE Sensex fell 361.92 points or 0.94% to 38,305.41,
while the CNX Nifty was down by 114.55 points or 1.00% to 11,359.90.
The US markets settled lower with
cut of over one and half percent on Wednesday as disappointing jobs data from
payroll processor ADP added to the economic concerns raised by yesterday's weak
manufacturing data. Adding to signs of a slowdown in the US job market, payroll
processor ADP released a report showing private sector employment rose by
slightly less than expected in the month of September. ADP said private sector
employment climbed by 135,000 jobs in September compared to street estimates
for an increase of about 140,000 jobs. The report also showed a significant
downward revision to the increase in private sector jobs in August, which was
slashed to 157,000 jobs from the originally reported 195,000 jobs. The Labor
Department is scheduled to release its more closely watched monthly jobs report
on Friday which includes both public and private sector jobs. Employment is
expected to increase by 140,000 jobs in September after rising by 130,000 jobs
in August, while the unemployment rate is expected to hold at 3.7 percent.
Besides, Automobile manufacturers stocks fell after quarterly sales reports
from Ford and General Motors added to concern over profit margins in the
industry. All 11 S&P 500 sectors were down with industries sensitive to
economic growth dropping most. The last time all 11 sectors fell for two
straight days was December 24, 2018.
Crude oil futures ended lower on
Wednesday after the Energy Information Administration (EIA) reported that US
crude supplies rose for a third week in a row, by 3.1 million barrels for the
week ended September 27. The American Petroleum Institute on Tuesday, however,
reported a drop of 5.9 million barrels. Discrepancies between the reports from
the EIA, a government agency, and the API, a trade group, are not unusual, and
are often attributed to the different ways the data are reported to the two
groups. Besides, oil price also fell on account of downbeat economic data
weighed on prospects for energy demand. Benchmark crude oil futures for
November dropped 98 cents or 1.8 percent to settle at $52.64 a barrel on the
New York Mercantile Exchange. December Brent fell $1.20 or 2 percent to settle
at $57.69 a barrel on London's Intercontinental Exchange.
Extending
weakness for the second day, Indian rupee ended weaker against dollar on
Tuesday, as good demand for the greenback from importers and weakness in
domestic shares. Traders remain concerned with a monthly survey showing that
the manufacturing sector activity in September remained unchanged amid subdued
demand conditions both domestically as well as externally. The IHS Markit India
Manufacturing PMI was at 51.4 in September, unchanged from August and thereby
posting its joint-lowest reading since May 2018. Separately, a survey of World
Economic Forum business leaders showed that the possibility of a fiscal crisis
is the biggest risk to doing business globally. On the global front, dollar
held at a 29-month high on Tuesday as renewed evidence of strength in the US
economy encouraged investors to buy the greenback. Finally, the rupee ended at
71.07, 20 paise weaker from its previous close of 70.87 on Monday.
The
FIIs as per Tuesday's data were net sellers in both equity and debt segments.
In equity segment, the gross buying was of Rs 5998.43 crore against gross
selling of Rs 6297.25 crore, while in the debt segment, the gross purchase was
of Rs 2179.41 crore with gross sales of Rs 2508.79 crore. Besides, in the
hybrid segment, the gross buying was of Rs 8.25 crore against gross selling of
Rs 7.88 crore.
The US markets declined on
Wednesday as worries intensified about slowing US manufacturing activity that
could presage a possible economic downturn. Asian markets are trading in red on
Thursday after the US opened a new trade war front by saying it will impose
tariffs on $7.5 billion of goods from the European Union. Indian markets ended
lower with cut of around a percent on Tuesday amid heavy selloffs in shares of
banking as investors fretted about the exposure of major banks to the troubled
real estate sector, compounding worries about a slowdown in economic growth.
Today, the markets are likely to extend previous session's losses with negative
start tracking weak global cues. Markets were closed on Wednesday on account of
Gandhi Jayanti. There will be some cautiousness with the finance ministry data
showing that Goods and services tax (GST) collection fell to a 19-month low of
Rs 91,916 crore in September, pointing to a deepening economic slowdown. It is
the second straight month when the collection has fallen below the Rs
1-trillion mark. Traders will be also concerned with report that the Finance
Ministry made it clear that companies opting for a lower tax of 22% will not be
eligible for accumulated additional depreciation and Minimum Alternative Tax
(MAT) credit. Also, an another report stated that India Inc's debt servicing
woes, which seemed to be getting better from FY15 to FY19, now seem to be
taking a distinct turn for the worse. Though, some respite may come later in the
day with India Ratings and Research's statement that the corporate tax cut will
help India Inc save up to Rs 65,000 crore of outgo in FY20. Some support may
also come with World Economic Forum's (WEF) statement that India, a young
economy with lot of potential, has demonstrated remarkable strength and
resilience amid global slowdown. Traders may take note of report that India and
America will launch a new initiative for clean energy to fuel economic growth
in the strategically-important Indo-Pacific region where China has been trying
to expand its sphere of influence. Besides, the Reserve Bank assured the
general public that the Indian banking system is safe and stable and there is
no need for panic based on rumours. Banking stocks will be in focus with domestic
ratings agency Crisil's report said that the Indian banking system's stock of
dud assets will further reduce to up to 8 per cent level by March 2020, but the
NBFCs may continue to face challenges. There will be some buzz in the auto
stocks with report that low consumer sentiment continued to subdue sales
performance of the Indian automobile sector in September, as major industry
players reported a significant decline in their respective sales figures.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,359.90
|
11,220.47
|
11,526.77
|
BSE Sensex
|
38,305.41
|
37,848.94
|
38,842.83
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
8,089.59
|
32.00
|
25.90
|
41.20
|
SBI
|
793.50
|
255.95
|
242.50
|
272.45
|
Axis Bank
|
494.42
|
679.15
|
656.52
|
701.52
|
Tata Motors
|
402.33
|
115.30
|
112.25
|
119.10
|
BPCL
|
341.01
|
493.90
|
477.92
|
510.72
|
Bajaj Auto has registered a fall of 20% in total sales to 402,035 units in September 2019 against 502,009 units in September 2018.
Bharti Airtel has installed 100 hops of 5G technology transmission equipment of Chinese technology major Huawei in last six months.
M&M has reported auto sales performance for September 2019 which stood at 43343 vehicles, compared to 55022 vehicles during September 2018, registering a fall of 21%.
Axis Bank has launched a digital fixed-deposit product called Express FD.