Friday turned out to be a
disappointing day of trade for Indian equity benchmarks, with frontline gauges
ending the session with marginal losses, as better-than-expected Q4 GDP numbers
failed to cheer Dalal Street. Indian economy grew at 7.7% during January-March
quarter of financial year 2017-18 compared to 6.1% a year ago, driven by gains
in manufacturing and consumer spending. However, the GDP growth for the entire
fiscal of 2017-18 was at 6.7%, lower than 7.1% in 2016-17. Though, domestic
gauges made a positive start as traders took some support with report that
eight infrastructure industries recorded 4.7% growth in April helped by healthy
performance in segments like coal, natural gas and cement. The growth rate of
eight core sectors, which also include fertilisers and steel, was 2.6% in April
2017. Traders took some solace with Moody's Investors Service's statement that
tax reforms are likely to expand revenue base in fast growing economies like
India but they will be most effective when accompanied by lowering of fiscal
deficit and effective management of expenditure. However, frontline gauges
pared all of their initial gains to enter into red terrain, as sentiments
turned pessimistic with a report that activity in India's manufacturing sector
declined marginally in May on the back of weaker expansion in output, new order
growth and employment. A buildup of inflationary pressures, amid persistent
crude oil rally led to the input and output cost rising at the fastest pace
since February, thereby impacting activity growth. The Nikkei India
Manufacturing Purchasing Managers Index (PMI) fell from 51.6 in April to 51.2
in May. Sentiments also remained dampened on report that India's per capita
income grew at a slower pace of 8.6% to Rs 1,12,835 during the last fiscal
ended March 2018. The per capita net national income in 2016-17 stood at Rs
1,03,870, witnessing a growth of over 10.3% from the preceding fiscal ended
March 2016 (at Rs 94,130). Finally, the BSE Sensex declined 95.12 points or
0.27% to 35,227.26, while the CNX Nifty was down by 39.95 points or 0.37% to
10,696.20.
Resuming northward journey, the
US markets ended with notable gains on Friday after a day of halt, following an
upbeat May jobs report that showed a modest gain in wages. The US economy added
223,000 jobs in May to push unemployment down to an 18-year low of 3.8% from
3.9% in April, signaling that a nine-year-old economic expansion still has
plenty of steam despite being one of the oldest ever. Average hourly earnings
rose 0.3% last month. Dow Industrial gained more than 200 points, while Nasdaq
advanced more than 100 points to reach at its best closing level in well over
two months, as easing fears political upheaval in Italy and trade wars also
supported sentiment. Besides, gains in Europe also boost the rally in US
markets, after populist parties the League and the 5 Star Movement struck a
deal to form a coalition government on Thursday evening, ending months of
political deadlock and averting new elections this summer. On the economic
front, the Institute for Supply Management released a report showing growth in
manufacturing activity accelerated by more than expected in the month of May.
The ISM said its purchasing manager's index climbed to 58.7 in May from 57.3 in
April, with a reading above 50 indicating growth in the manufacturing sector. The
Dow Jones Industrial Average surged 219.37 points or 0.90 percent to 24635.21
and the S&P 500 increased 29.35 points or 1.08% to 2734.62 and the Nasdaq
was up by 112.21 points or 1.51 percent to 7554.33.
Extending losses for second
straight day, crude oil futures settled sharply lower on Friday as rising rig
counts signal output expansion. Oil suffered its lowest finish since April, as
an upbeat jobs report lifted the dollar and dented commodities. Besides, the
possibility that OPEC and its allies may decide to boost output too dampened
sentiments. According to data from energy services firm Baker Hughes, the
number of oil rigs operating in the US increased by 2 to 861, its highest level
since March 13, 2015, pointing to signs of an expansion in US output. The
uptick in drilling activity emerges as the Energy Information Administration
said Thursday US oil output rose 215,000 barrels per day to a record 10.47
million barrels per day in March. Benchmark crude oil futures for July delivery
slipped $1.23 or 1.8 percent to settle at $65.81 a barrel on the New York
Mercantile Exchange. August Brent crude fell 77 cents or 1 percent to settle at
$76.79 a barrel on London's Intercontinental Exchange.
Exhibiting
strength against the dollar for the third straight day, Indian rupee ended
higher on Friday, on continued selling of the American currency by banks and
exporters amid robust macroeconomic data. Indian economy grew at 7.7 percent
during January-March quarter of financial year 2017-18 compared to 6.1 percent
a year ago, driven by gains in manufacturing and consumer spending. However,
the GDP growth for the entire fiscal of 2017-18 was at 6.7%, lower than 7.1
percent in 2016-17. Adding to the optimism, eight infrastructure industries
recorded 4.7 percent growth in April helped by healthy performance in segments
like coal, natural gas and cement. The growth rate of eight core sectors, which
also include fertilisers and steel, was 2.6 percent in April 2017. Besides, a
muted show by the greenback against other currencies overseas also supported
the rupee uptrend. On the global front, euro edged higher on Friday and looked
set to break a six-week losing streak, supported by a drop in Italian bond
yields after a revived coalition deal between two anti-establishment parties
pulled the country back from snap elections. Finally, the rupee ended at 67.06,
34 paise stronger from its previous close of 67.40 on Thursday.
The FIIs as per Friday'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 21916.41 crore against gross
selling of Rs 22431.95 crore, while in the debt segment, the gross purchase was
of Rs 646.22 crore with gross sales of Rs 575.39 crore. Besides, in the hybrid
segment, the gross buying was of Rs 0.69 crore against gross selling of Rs 0.25
crore.
The US markets ended higher on
Friday following the release of a report from the Labor Department showing
stronger than expected job growth in the month of May. Asian markets are
trading mostly in green in early deals, tracking gains seen on Wall Street
after Friday's expectation-topping U.S. jobs report and shrugging off
trade-related concerns. Indian equity benchmarks ended slightly lower on Friday
as renewed trade war fears offset encouraging GDP data for the March quarter
and news on the formation of a new government in Italy, the euro zone's
third-largest economy. Today, the markets are likely to make optimistic start
amid firm global cues. Traders will get some encouragement with Prime Minister
Narendra Modi's statement that India's economy will sustain a growth of 7.5 to
8 per cent per year. He said, the Indian government has kept its economic
growth forecast for the current fiscal unchanged at 7.5 per cent, buoyed by
turnaround in manufacturing and pick up in investment. Traders will be eyeing
services sector data for May slated to be released on June 5, while the Reserve
Bank's rate decision will be announced on June 6. The RBI is expected to take a
wait-and-watch approach despite the higher GDP growth figures released last
week. However, there will be some concern with report that collections from the
Goods and Services Tax in May fell to Rs 94,016 crore, from the Rs 1.03 lakh
crore collected in April. Meanwhile, foreign investors pulled out a massive Rs
29,714 crore from the capital markets in May, making it the biggest outflow in
18 months, primarily due to a surge in global crude prices. There will be buzz
in public sector banks on report that losses by state-run banks have almost
entirely wiped out the $13-billion capital infusion by the government, and the
situation is unlikely to improve in the current fiscal year.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,696.20
|
10,663.55
|
10,746.80
|
BSE Sensex
|
35,227.26
|
35,123.67
|
35,384.54
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ICICI Bank
|
296.76
|
289.30
|
284.12
|
297.22
|
Vedanta
|
186.41
|
248.25
|
243.70
|
255.60
|
SBI
|
165.75
|
266.70
|
264.27
|
269.47
|
Tata Motors
|
158.41
|
287.20
|
283.38
|
290.68
|
ONGC
|
98.48
|
173.20
|
170.53
|
175.93
|
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