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NSE Intra-day chart (12 December 2019)
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Market Commentary 13 December 2019
Markets to open in green amid firm global cues

 

Rally continued on the Dalal Street for the second straight day on Thursday. The start of the day was fabulous, as the Union Cabinet approved changes to the insolvency law, including a provision to ring-fence successful resolution applicants from criminal proceedings with regard to offences committed by previous promoters of a company. The amendments to the Insolvency and Bankruptcy Code are aimed at removing certain difficulties being faced during insolvency resolution process to realise the objects of the Code and to further ease doing of business. Firm trade persisted during the whole day, also because of positive cues from global markets. Key equity indices traded at their intraday fresh highs in the second half of the trading session, taking support with Former President Pranab Mukherjee's statement that certain things that are happening would have its impact and he was not worried over the economic slowdown. Mukherjee, further said there is nothing wrong in public sector banks needing capital infusion. Market participants remained optimistic ahead of GST Council meeting, headed by Finance Minister Nirmala Sitharaman, which is schedule on December 18 in the backdrop of lower-than-expected GST collection and pending compensation to many states. Finally, the BSE Sensex gained 169.14 points or 0.42% to 40,581.71, while the CNX Nifty was up by 61.65 points or 0.52% to 11,971.80.

 

The US markets closed higher on Thursday, with S&P 500 and Nasdaq Composite indexes ending at record highs, while the Dow Jones Industrial Average saw a new intraday record, after President Donald Trump said that the US and China were nearing a big deal that could avoid fresh tariffs, planned to go in effect December 15, and potentially roll back some existing duties. The latest developments on the trade front come as Trump is meeting with top trade advisers to discuss current plans to raise tariffs on $160 billion worth of Chinese goods on December 15. Besides, a private report said officials circulated talking points ahead of the meeting downplaying the repercussions the new tariffs would have on the US economy. On the economic data front, first-time claims for US unemployment benefits jumped by much more than expected in the week ended December 7, according to a report released by the Labor Department. The report said initial jobless claims surged up to 252,000, an increase of 49,000 from the previous week's unrevised level of 203,000. Street had expected jobless claims to edge up to 213,000. With the much bigger than expected increase, jobless claims reached their highest level since hitting 257,000 in September of 2017. Meanwhile, with higher prices for goods offsetting lower prices for services, the Labor Department released a report showing US producer prices came in unchanged in the month of November. The Labor Department said its producer price index for final demand was flat in November after climbing by 0.4 percent in October. Street had expected prices to rise by 0.2 percent.

 

Crude oil futures ended higher on Thursday after President Donald Trump hinted that the US was very close to enter into a trade deal with China. Besides, optimism about the reception of Saudi Arabia's behemoth oil refinery initial public offering during its second day of trading also provided a lift to oil markets. However, the International Energy Agency (EIA) in its report has said it still expected global crude inventories to rise by 700,000 barrels a day in the first three months of the year, despite OPEC+ efforts to balance the market, though it did trim its 2020 non-OPEC oil supply growth forecast by 200,000 barrels a day to 2.1 million barrels a day. Benchmark crude oil futures for January surged 42 cents or 0.7 percent to settle at $59.18 a barrel on the New York Mercantile Exchange. February Brent gained 48 cents or 0.8 percent to settle at $ 64.20 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended marginally higher for seventh consecutive day against US dollar on Thursday on selling in American currency by banks and exporters. Traders found solace with Piyush Goyal's statement that the government has carried out a number of reforms in various sectors and it is a continuous process for improvement in the economy. Market participants remained optimistic ahead of GST Council meeting, headed by Finance Minister Nirmala Sitharaman, which is schedule on December 18 in the backdrop of lower-than-expected GST collection and pending compensation to many states. Traders also remained on sidelines ahead of Consumer Price Index (CPI) data for November scheduled to be released today. On the global front, pound reached the highest since March as British voters headed to the polls to decide between Conservatives hoping to deliver Brexit in January and a Labour Party promising a second referendum. Finally, the rupee ended at 70.83, 2 paise stronger from its previous close of 70.85 on Wednesday.

 

The FIIs as per Thursday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 4941.73 crore against gross selling of Rs 4557.64 crore, while in the debt segment, the gross purchase was of Rs 2110.35 crore with gross sales of Rs 1554.84 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.73 crore against gross selling of Rs 9.08 crore.

 

The US markets ended in green on Thursday on reports that the United States and China reached a tentative trade deal. Asian markets are trading higher on Friday amid reports that US and Chinese negotiators have agreed in principle to an initial phase one trade deal. Indian markets ended higher for second straight session on Thursday led by gains in banking, auto and metal shares. Today, the start of session is likely to be positive following firm global cues. Some support will come with Union Minister Rao Inderjit Singh's statement that Indian economy is resilient and there is no cause for apprehension on decline in GDP with a slew of steps directed at boosting it. He added that the government has been undertaking various measures to boost GDP growth. However, weak macro-economic data may put pressure on sentiments. The National Statistical Office (NSO) data stated that industrial production shrank for third consecutive month in October by 3.8 per cent, mainly due to output fall in manufacturing, mining and electricity sectors, showing signs of economic slowdown. Besides, rising food prices pushed the retail inflation in November to over three-year high of 5.54 per cent, on the back of costlier vegetables, pulses and protein rich items. Also, there may be some concern as S&P Global Ratings forecast India's 2019-20 gross domestic product (GDP) to grow at 5.1 per cent and warned of a rating downgrade if an economic recovery does not happen. Meanwhile, the government may impose anti-dumping duty on a chemical used in polyester fibres and films, imported from five countries as the commerce ministry has launched an investigation for the same. There will be some buzz in the telecom stocks as ratings firm ICRA maintained a negative outlook for the Indian telecom industry, saying that recovery measures by beleaguered telcos will not be able to sustain the massive blow dealt by the Supreme Court order on adjusted gross revenue (AGR). Auto stocks will be in focus with report that the domestic electric vehicle (EV) market is projected to grow 36 percent annually between 2019 and 2026 as the market has gained traction following the implementation of the second phase of the EV incentives scheme in April. Also, there will be some reaction in textile stocks with report that India's cotton yarn production is expected to remain largely stable at current levels and increase only marginally about 1.5-2.5% to reach 4,200-4,250 million kilogram (mkg) in FY20, despite high prices of the fibre and subdued demand.

 

       Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

11,971.80

11,935.37

12,006.87

BSE Sensex

40,581.71

40,477.38

40,699.34

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

3,981.99

45.35

42.50

48.50

Tata Motors

661.39

173.35

165.60

178.00

SBI

378.04

321.85

315.95

325.35

Power Grid

357.15

184.75

181.08

188.38

ZEEL

153.59

284.30

278.75

288.30

 

  • Maruti Suzuki India has joined hand with Federal Bank a leading private sector bank to provide dealer finance and customized auto retail financing solutions to customers. 
  • Reliance Industries' wholly-owned subsidiary -- RSBVL has acquired equity shares of NowFloats Technologies for a cash consideration of Rs 141.63 crore. 
  • ITC is aiming to garner up to 20 per cent of the Rs 7,400 crore frozen food market in India in next three years with the firm expanding its offering in the category. 
  • Tech Mahindra has bagged largest smart city project worth Rs 500 crore from Pimpri Chinchwad Municipal Corporation, Asia's richest municipal corporation.
News Analysis