Indian equity benchmarks ended
the volatile day of trade with marginal gains on Thursday. Sentiments remained
up-beat in the beginning of the trade with traders eyeing on Goods and Services
Tax (GST) Council meeting starting in Guwahati today. GST Council is likely to
slash the indirect tax rates on as many as 165 items at its meeting in
Guwahati, which begins later today. At present, these 165 items attract 28%
tax, which could be moved to the 18% category. The street took note that a year
after demonetization, India is getting ready to give digital payments yet
another push. It could consider providing incentives in the GST regime for
payments that are settled electronically. Investors took note that in a move
that could unlock defence contracts of more than Rs 25,000 crore, the
government is amending its defence procurement manual (DPM), which will enable
the armed forces to procure the latest tech in a speedy manner. Markets pared
all of their early gains to enter into red terrain in noon deals, as traders
turned cautious with Grant Thornton's latest International Business Report
(IBR) highlighting that India slipped to the 7th position in the September
quarter from the 2nd spot in the previous three months in its ‘business
optimism index', showing clear signs of lag in the economy. Investors also took
note of the finance ministry's statement that raising the individual limit of
foreign investment up to 15% in power exchanges would be unwise unless a clear
business case is established and a strong and adequate regulatory mechanism
exists. However, short covering in last leg of trade helped markets to end tad
above their neutral lines. Finally, the BSE Sensex gained 32.12 points or 0.10%
to 33,250.93, while the CNX Nifty was up by 5.80 points or 0.06% to 10,308.95.
The US markets closed lower on
Thursday in their worst session in two weeks with the Dow snapping a seven-day
winning streak on worries over a possible delay in much-anticipated corporate
tax cut. However, main indexes trimmed losses after the House Ways and
Committee approved a bill to overhaul the tax code, setting up a vote by the
full House. Meanwhile, a popular measure of implied volatility, as measured by
the CBOE Volatility index VIX, soared as much as 20%, but pared gains to be up
11% at 10.86, still below its historic average at around 19 but pointing to
elevated levels of market anxiety. Stocks were initially battered by fears that
tax cuts would be delayed as the Senate Finance Committee released its version
of a tax plan that would defer implementing a 20% corporate tax until 2019,
versus next year, as proposed by House Republicans. On the economy front,
initial US jobless claims, a proxy for layoffs, rose by 10,000 to 239,000 in
the week ended November 4. The more stable monthly average of claims decreased
by 1,250 and stood at 231,250 to the lowest level since March 1973. The Dow
Jones Industrial Average lost 101.42 points or 0.43 percent to 23,461.94, the
Nasdaq dropped 39.065 points or 0.58 percent to 6,750.05, and the S&P 500
edged lower by 9.76 points or 0.38 percent to 2,584.62.
Crude oil futures bounced back
and ended higher on Thursday despite a report tempering expectation for further
supply cuts from OPEC. Traders got some support with the ongoing unrest in the
Middle East, while Saudi Arabia's plan to slash crude exports too lifted
sentiment. It was reported that Saudi Arabia plans to cut its crude exports by
120,000 barrels per day in December compared with November, slashing
allocations to all regions. In recent days oil has jumped to the highest in two
years on speculation the global oil market will re-balance in the near future. Benchmark
crude oil futures for December delivery ended higher by $0.36 at $ 57.17 a
barrel on the New York Mercantile Exchange. Brent crude for January delivery
was up by $0.47 to $63.96 a barrel on the ICE.
Indian
rupee ended marginally higher against dollar on Thursday due to selling of the
US currency by exporters and banks. The domestic currency got the support of
dollar's weakness against major world currencies overseas. This was the second
consecutive session when the rupee traded higher against dollar. However,
further gains were restricted as some concern came with Grant Thornton's latest
International Business Report (IBR) highlighting that India slipped to the 7th
position in the September quarter from the 2nd spot in the previous three
months in its ‘business optimism index', showing clear signs of lag in the
economy. On the global front, dollar slipped against yen on Thursday on the
sudden plummeting of the Nikkei stock index as well as uncertainties over the
US tax reforms. Finally, the rupee ended at 64.94, 1 paise stronger from its
previous close of 64.95 on Wednesday.
The
FIIs as per Thursday'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
12524.10 crore against gross selling of Rs 6536.61 crore, while in the debt
segment, the gross purchase was of Rs 1848.90 crore with gross sales of Rs
2235.65 crore.
The US markets despite coming off
the worst levels of the day ended lower in the last session, reacting to
reports regarding the Senate version of tax reform legislation, which has several
key differences with the House version, including a delay in the implementation
of the cut in the corporate tax rate. Also, there was report of bigger than
expected increase in initial jobless claims for the week. The Asian markets
have made mostly a lower start tailing the US markets and led by the Japanese
broader index, which is down by over a percent after the yen strengthened against
the dollar. Investors in the region appeared to be growing pessimistic about
the prospects for meaningful US fiscal reform. The Indian markets after a
volatile day of trade managed modestly higher close in the last session and
snapped their two days declining trend. Today, the mood once again is looking
somber on weak global cues and traders will be cautious ahead of the key macro
data of industrial production and the GST Council meeting outcome later in the
day. Though, it is expected that the GST Council would rationalize tax rates
for 100-150 items in the 28 percent tax slab along with taking a call on
recommendations of the ministerial panel's suggestions to make the composition
scheme attractive, but traders will look for the final outcome. Bihar Deputy
Chief Minister Sushil Kumar Modi, who heads the panel on the Goods and Services
Tax Network (GSTN), has indicated that the rates on over 200 daily-use items
are expected to come down from 28 per cent to 18 per cent. There will be buzz
in the realty sector, as the government in its bid to give a fillip to the
housing sector and push construction activities has announced that central
government employees can get loans up to Rs 25 lakh from the government under
the house building advance (HBA) scheme, which is more than three times of the
earlier norm. There will be lots of important earnings announcements too, to
keep the markets in action.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10308.95
|
10261.12
|
10362.62
|
BSE Sensex
|
33250.93
|
33087.05
|
33439.31
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
Tata Motors
|
405.47
|
440.15
|
426.90
|
452.15
|
SBI
|
218.46
|
313.70
|
308.60
|
318.40
|
ITC
|
202.46
|
260.05
|
257.40
|
264.60
|
Yes Bank
|
154.67
|
304.65
|
301.50
|
308.30
|
ICICI Bank
|
127.16
|
311.30
|
307.13
|
315.13
|
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