Tuesday turned out to be a
fabulous day of trade for Indian equity benchmarks, with frontline gauges
garnering gains of around three fourth of a percent ahead of RBI monetary
policy review begins today and the decision is due tomorrow. This has led to
unabated buying by domestic financial institutions, which added to the positive
mood. Sentiments remained jubilant since start with bourses making gap-up
opening, as traders took encouragement with Finance Minister FM Arun Jaitley's
indication that the government would consider reducing the goods and services
tax slabs and easing compliance burden for small taxpayers once revenues from
GST better those from the previous tax regime. Some support also came after
Industry body Assocham urged the government to relax fiscal deficit targets and
boost public expenditure as a means to accelerate India's economic growth,
which slipped to 5.7 percent in the June quarter. Former RBI Governor C
Rangarajan also said that the government needs to “pick up very fast” to be
able to maintain a healthy annual growth.
Markets maintained the bullish momentum and traded with jubilation till
end as some support came after the Nikkei India Manufacturing Purchasing
Managers' Index, or PMI, remained unchanged at 51.2 in September. As per the
report, September data painted an encouraging picture as the sector continued
to recover from the disruptions caused by the introduction of the GST in July.
Adding to the optimism, the Centre has begun a slew of measures to boost medium
and small scale industries, exports and the textile sector. As per report,
September 27 Cabinet meeting had discussed proposals related to providing
stimulus to medium and small-scale industries, exports and the textile sector
which have not performed to their optimum strength in last few quarters.
Finally, the BSE Sensex surged 213.66 points or 0.68% to 31,497.38, while the
CNX Nifty was up by 70.90 points or 0.72% to 9,859.50.
The US markets closed higher on
Tuesday, with the S&P 500 notching its sixth positive session in a row, as
the market took its cues from upbeat data, including reports on vehicle sales.
Stocks have been supported by some strong economic data, including the recent
ISM manufacturing survey for September, as well as hopes for tax-cut
legislation. However, there are lingering concerns that the market's record
advance has been overdone. That's especially as the Federal Reserve increases
borrowing costs. The dollar stepped back from a 1 1/2-month high against a
basket of currencies, as the rally triggered by strong US data fizzled on
speculation US President Donald Trump's choice for the next Fed Chair may be a
less hawkish candidate than previously thought. Meanwhile, major auto makers
posted mostly solid sales gains in September amid heavier consumer discounts
and surging demand to replace hurricane-damaged vehicles, giving the industry
relief from months of declining results and some momentum heading into the key
fourth-quarter selling season. The Dow Jones Industrial Average added 84.07
points or 0.37 percent to 22,641.67, the Nasdaq gained 14.99 points or 0.23
percent to 6,531.71, and the S&P 500 edged higher by 5.46 points or 0.22
percent to 2,534.58.
Crude oil futures extended their
weakness on Tuesday ahead of weekly inventory data which is expected to show
crude oil supplies fell for a second-straight week amid concerns that the sharp
uptick in crude prices could encourage US shale producers to ramp up
production. Also, the advent of autumn is traditionally associated with weaker
oil demand as it marks the end of the summer driving season. Meanwhile, OPEC
Secretary-General Mohammad Barkindo said that compliance with the oil output
cut deal between OPEC and non-OPEC nations is extremely high. Barkindo said
compliance was high, but at 86% last month, the cartel will simply need to get
more nations to fully commit. Benchmark crude oil futures for November delivery
ended lower by $0.16 or 0.3 percent at $50.42 a barrel on the New York
Mercantile Exchange. Brent crude for November delivery lost 0.15 cents to
$55.97 a barrel on the ICE.
Indian
rupee depreciated against the US dollar on Tuesday, as the greenback took on
more strength overseas. Investors even overlooked the report that manufacturing
activity in India showed a modest improvement in September supported by
increases in both output and new orders. The Nikkei India Manufacturing
Purchasing Managers' Index, or PMI, remained unchanged at 51.2 in September.
However, a strong domestic equity market prevented the rupee from falling
further. On the global front, dollar climbed for a second consecutive day on
Tuesday as a strong reading for US manufacturing activity pushed bond yields
higher, prompting investors to trim some of their extreme short bets against
the greenback. Finally, the rupee ended at 65.50, 23 paise weaker from its
previous close of 65.27 on Friday.
The
FIIs as per Tuesday'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
7495.43 crore against gross selling of Rs 6418.12 crore, while in the debt
segment, the gross purchase was of Rs 512.08 crore with gross sales of Rs
645.61 crore.
The US markets continued their
upmove in the last session and with the upward move on the day, the major
averages climbed to new record closing highs, as traders seemed optimistic
about the economic outlook and the prospects for Republican tax reform. The
Asian markets have made mostly a positive start with China's markets on a
week-long holiday and South Korea and Taiwan too closed for a holiday. The
Indian markets rallied in the last session, traders coming after a long weekend
went for hefty buying, with auto stocks remaining in lime light on robust sales
data. Today, the start of the important day is likely to be in green but
traders will remain cautious ahead of the RBI's monetary policy review due out
later in the day. This will be the fourth bimonthly monetary policy review of
FY2017-18. With inflation firming up and the rupee coming under pressure, the
general view is that RBI will keep the policy rates unchanged. Traders will
however be getting some support with report of core sector output growing at
its fastest pace in five months in August, driven by higher coal and
electricity production. The output grew 4.9 percent in August compared with a
revised 2.6 percent year-on-year growth in July. Meanwhile, the government sees
the decline in growth as a hiccup and expects the economy to pick up pace in
the second half of the year as teething troubles with GST get resolved and the
effect of demonetisation wanes. There will be some buzz in the oil & gas
sector stocks too, as the government has reduced basic excise duty rate on both
branded and unbranded petrol and diesel by Rs 2 per litre. The Finance Ministry
said that this has been done to cushion the impact of rising international
prices of crude petroleum oil, petrol and diesel on their retail sale prices.
Also a report by Moody's has said that India will surpass China as the
fastest-growing Asian market for petroleum products in 2018, on the back of a 6
per cent demand growth.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE Nifty
|
9859.50
|
9828.57
|
9892.92
|
BSE Sensex
|
31497.38
|
31420.15
|
31594.95
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
ITC
|
114.98
|
261.40
|
259.02
|
263.27
|
Axis Bank
|
107.13
|
509.65
|
503.50
|
516.40
|
SBI
|
105.48
|
251.30
|
249.13
|
254.93
|
Tata Motors
|
96.97
|
416.00
|
411.33
|
424.33
|
GAIL (India)
|
95.56
|
435.40
|
425.52
|
441.77
|
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