Indian equity markets heaved a
sigh of relief on Tuesday, after both the larger peers, Sensex and Nifty,
staged recovery to end the trading session in green terrain. The markets made a
worst start of the day, as sentiments got hit with the Reserve Bank of India
(RBI) governor Urjit Patel's unexpected resignation from his post on Monday.
The government and the RBI have been fighting for weeks over how much autonomy
the RBI should have as the administration of Prime Minister Narendra Modi seeks
to reduce curbs on lending and to gain access to the RBI's surplus reserves.
Adding more worries among the traders, Moody's Investors Service's said that
the independence of a country's central bank is an important consideration
while assessing a country's institutional strength and any attempt by the
government to curtail it would be credit negative. To a query on the sovereign
rating impact of the developments around RBI, Moody's said while the motivation
for the RBI Governor's resignation is unclear, the independence of a country's
central bank is an important consideration in their assessment of a sovereign's
institutional strength. However, in the second half of the session, the key
indices erased all of their losses to settle the day on positive note, tracking
firm European markets. The street took support with Commerce and Industry
Minister Suresh Prabhu's statement that the New Industrial Policy, which will
replace the 27-year-old existing policy, has been sent for the Union Cabinet's
consideration. The new industrial policy aims to resolve bottlenecks arising
from inadequate infrastructure, restrictive labour laws and complicated
business environment. Some relief came after the government made the entire 60%
of the corpus withdrawn at the time of retirement tax free. Investors took note
of Former chief economic adviser Arvind Subramanian's statement that the
inclusion of petrol and diesel in the Goods and Services Tax (GST) ambit is not
possible until the revenues under the new tax regime stabilize. Meanwhile,
assembly poll results showed BJP losing power in Rajasthan and Chhattisgarh,
while having a close finish in Madhya Pradesh. Finally, the BSE Sensex surged
190.29 points or 0.54% to 35,150.01, while the CNX Nifty was up by 60.70 points
or 0.58% to 10,549.15.
The US markets ended mostly lower
on Tuesday after a contentious fight between President Donald Trump and
Democratic leadership over border security. Trump threatened to shut down the
government if more money was not allocated towards building a wall along the
US-Mexico border. Further, cautiousness too prevailed in the markets on report
that the US will condemn China over hacking and economic espionage, potentially
ratcheting up tension between the two countries once again. However, down-move
remain capped on report that the US and China launched formal trade talks with
a phone call. The initial conversation included Treasury Secretary Steven
Mnuchin, US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu
He, where they discussed changes to fundamental Chinese economic policies. In
the call, China informed US officials that it agreed to reduce tariffs on US
autos to 15%, down from 40%. On the economic front, producer prices in the US
unexpectedly showed a modest uptick in the month of November, according to a
report released by the Labor Department. The Labor Department said its producer
price index for final demand inched up by 0.1% in November after climbing by
0.6% in October. Prices for food showed another significant increase, surging
up by 1.3% in November after jumping by 1.0% in October. On the other hand, the
report said energy prices plunged by 5.0% in November following a 2.7% spike in
the previous month. Gasoline prices plummeted by 14.0%. Excluding food and
energy prices, core producer prices rose by 0.3% in November after rising by
0.5% in October. Dow Jones Industrial Average declined 53.02 points or 0.22
percent to 24370.24 and S&P 500 lost 0.94 points or 0.04 percent to
2636.78, while Nasdaq was up by 11.31 points or 0.16 percent to 7031.83.
After falling in previous
session, Crude oil futures ended higher on Tuesday in the wake of a short-term
disruption in Libyan output. Libya's national oil company has declared force
majeure on exports from its El Sharara field after a weekend militia attack on the
facility. Meanwhile, the Energy Information Administration (EIA) in its latest
report has said that it reduced its oil-price forecasts for this year and next,
following the recent price declines that came ahead of Friday's decision by the
Organization of the Petroleum Exporting Countries and some nonmember allies to
cut production starting in January. The EIA forecasts an average 2018 WTI price
of $65.18 a barrel, down 2.4% from the November report's forecast. It also cut
its 2019 view by 16.4% to $54.19. For Brent, the EIA lowered its forecast by
2.3% to $71.30 in 2018 and by 15.2% to $61 in 2019. Benchmark crude oil futures
for January rose 65 cents or 1.3 percent to settle $51.65 a barrel on the New
York Mercantile Exchange. February Brent crude added 23 cents or 0.4 percent to
settle at $60.20 a barrel on London's Intercontinental Exchange.
Indian rupee ended weaker on
Tuesday as sentiments got hit with the Reserve Bank of India (RBI) governor
Urjit Patel's unexpected resignation from his post on Monday. The government
and the RBI have been fighting for weeks over how much autonomy the RBI should
have as the administration of Prime Minister Narendra Modi seeks to reduce
curbs on lending and to gain access to the RBI's surplus reserves. Sentiments
also remain dampened after Moody's Investors Service's said that the
independence of a country's central bank is an important consideration while
assessing a country's institutional strength and any attempt by the government
to curtail it would be credit negative. To a query on the sovereign rating
impact of the developments around RBI, Moody's said while the motivation for
the RBI Governor's resignation is unclear, the independence of a country's
central bank is an important consideration in their assessment of a sovereign's
institutional strength. Assembly poll results showed BJP losing power in
Rajasthan and Chhattisgarh, while having a close finish in Madhya Pradesh, too
dampened sentiments. Finally, the rupee ended at 71.85, 53 paise weaker from
its previous close of 71.32 on Monday.
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
5963.87 crore against gross selling of Rs 4169.29 crore, while in the debt
segment, the gross purchase was of Rs 553.34 crore with gross sales of Rs
1996.02 crore. Besides, in the hybrid segment, there was no buying and selling.
The US markets ended Tuesday's
volatile session mostly in red as investors weighed mounting political tension
in the nation's capital. Asian markets were trading mostly in green on
Wednesday following positive signs on the outlook for US-China trade talks.
Indian markets recouped early losses and ended higher on Tuesday mainly on the
back of strong buying across consumer durable pharma, banking and information
technology stocks. Also, investors awaited the final outcome of the state
assembly elections results. Today, the markets are likely to make a cautious
start ahead of macro-economic data amid mixed global cues. Market-men will be
eyeing the macro economic data of industrial production and consumer price
inflation to be released after the market hours. There will be some
cautiousness with the Reserve Bank of India's (RBI) data showing that the
Central Bank continued to remain a net seller of the US dollar in October, as
it sold $7.204 billion of the greenback in the spot market. In the reporting
month, the central bank purchased $945 million, while sold $8.149 billion in
the spot market. RBI maintains that its intervention in the foreign exchange
market is to curb volatility in the rupee and not to target a level of the
domestic currency. However, traders may take some support with Industry body
CII's statement that the appointment of former bureaucrat Shaktikanta Das as
the new Reserve Bank of India (RBI) Governor comes as a huge sentiment booster
to the industry and expressed confidence that he will take urgent steps to
address the liquidity squeeze in economy. Das was appointed as the new governor
of the RBI, a day after his predecessor Urjit Patel's resignation. Moreover,
CII also said that the government should consider permitting 100% foreign
direct investment (FDI) in multi-brand retail trade and further improve ease of
doing business for the sector to promote growth in the segment. Meanwhile, the
Agriculture Ministry launched online portal Ensure to connect with direct
benefit transfer and provide simple, useful and transparent system to the
beneficiary. There will be some reaction in stocks related to renewable energy
(RE) sector with rating agency ICRA expecting a capacity addition of 10,000 MW
in fiscal year 2020, and has maintained a stable outlook for the sector. The
share of renewable energy in the generation mix has increased from 5.6% in
FY2015 to 7.8% in FY2018. Also, there will be some buzz in construction sector
stocks with CARE Ratings' report that the pace of the construction sector is
set to face a decline in FY20 on funding shortage for new projects.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE
Nifty
|
10,549.15
|
10,399.62
|
10,632.92
|
BSE
Sensex
|
35,150.01
|
34,648.42
|
35,429.46
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
851.03
|
177.85
|
167.82
|
183.87
|
ICICI Bank
|
368.86
|
342.80
|
337.53
|
346.53
|
SBI
|
309.27
|
281.25
|
271.98
|
286.88
|
Sun Pharma
|
246.88
|
422.30
|
400.33
|
434.53
|
IOC
|
217.99
|
131.95
|
129.67
|
134.12
|
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Tata Consultancy Services and Singapore Airlines have launched the Intelligent Airline Operations Solution.
Dr. Reddy's Laboratories has launched Omeprazole Delayed-Release Tablets, 20 mg in the United States market.
Mahindra & Mahindra's owned -- Mahindra Racing has launched M5 Electro race car in India.