Indian equity benchmarks faced
rough ride on Thursday's trading session, with Sensex and Nifty ending lower by
around 0.25% each. After a cautious opening, key indices remained lackluster
throughout the day, as India's factory output growth, measured in terms of
Index of Industrial Production (IIP), contracted by 0.3% in December 2019 as
compared to expansion of 2.5% in December 2018, mainly on account of a decline
in manufacturing sector output. Adding more worries among traders, India's
retail inflation based on Consumer Price Index (CPI) jumped to 7.59% in January
2020. The CPI was 1.97% in January 2019 and 7.35% in December 2019. Weak trade
continued over the Dalal Street in the second half of the trading session, on
the back of Finance Minister Nirmala Sitharaman's statement that Goods and
Services Tax (GST) compensation to states is delayed due to inadequate
realisation of cess and that the Centre was not according any differential
treatment to states. Market participants paid no heed towards Chief Economic
Advisor Krishnamurthy Subramanian's statement that the coronavirus outbreak in
China provides an opportunity for India to expand exports. India is one of
China's leading trade partners in Asia and has a huge trade deficit with that
country. Finally, the BSE Sensex lost 106.11 points or 0.26% to 41459.79, while
the CNX Nifty was down by 26.55 points or 0.22% to 12174.65.
The US markets ended lower on
Thursday amid reports of a jump in new coronavirus cases. Officials revealed an
additional 242 deaths from the coronavirus in the Chinese province of Hubei as
well as 14,840 new confirmed cases. While the jump in confirmed cases was
partly due to the adoption of new methodology for counting infections, the
spike still led to renewed fears about the outbreak. On the economic data
front, with higher prices for food and shelter offsetting a steep drop in
gasoline prices, the Labor Department released a report showing a modest
increase in US consumer prices in the month of January. The Labor Department
said its consumer price index inched up by 0.1 percent in January after rising
by 0.2 percent in December. Street had expected prices to increase by 0.2
percent. The uptick in consumer prices was primarily due to an increase in
shelter costs, which climbed by 0.4 percent in January. Besides, first-time
claims for US unemployment benefits inched up by less than expected in the week
ended February 8, according to a report released by the Labor Department. The
report said initial jobless claims crept up to 205,000, an increase of 2,000
from the previous week's revised level of 203,000. Street had expected jobless
claims to rise to 210,000 from the 202,000 originally reported for the previous
week. The Labor Department said the less volatile four-week moving average was
unchanged from the previous week's revised average at 212,000. Meanwhile, the
report said continuing claims, a reading on the number of people receiving
ongoing unemployment assistance fell by 61,000 to 1.698 million in the week
ended February 1.
Crude oil futures ended higher
for third straight session on Thursday as the potential for OPEC+ output cuts
fueled some optimism, despite a rise in the number of COVID-19 cases in China
and lower forecasts for oil demand growth. China reported 254 new deaths from
the virus, while the number of new cases jumped 15,152, after the government
applied a new methodology in hard-hit Hubei province of diagnosing infections
of the novel strain of coronavirus that reportedly originated in Wuhan, China,
last year and was recently classified by the World Health Organization as
coronavirus disease. The new figures brought total deaths from the outbreak at
1,362, while the total number of confirmed cases rose to 59,804. Meanwhile, The
International Energy Agency (IEA) lowered its forecast for oil-demand growth to
its slowest pace since 2011, blaming the viral outbreak. It now expects global
demand for crude to grow by 825,000 barrels a day in 2020, down 365,000 barrels
a day from its previous forecast. Crude oil futures for March gained 25 cents
or 0.5 percent to settle at $51.42 a barrel on the New York Mercantile
Exchange. April Brent rose 55 cents or 1 percent to settle at $56.34 a barrel
on London's Intercontinental Exchange.
Indian
rupee remained unchanged as compared to its previous close, as weak
macro-economic data disappointed market participants. India's retail inflation
based on Consumer Price Index (CPI) spiked to 7.59 per cent for the month of
January 2020 from 7.35 per cent in December 2019, due to costlier food products
like vegetables, pulses and protein-rich items. Industrial production
contracted by 0.3 per cent in December 2019 as against 2.5 per cent growth in
same month a year ago, weighed by a decline in the manufacturing sector. A weak
trend at Dalal Street and rising crude oil prices weighed on the local unit,
while weakening of the American currency supported the local unit to some
extent. On the global front, yen rose from a three-week low against the dollar
on Thursday after China's Hubei province, the epicenter of a coronavirus
outbreak, reported a sharp jump in the number of new cases in a jolt to markets
and sparking a flight for safe-haven assets. The last traded price of rupee was
71.33, unchanged from its previous close on Wednesday.
The
FIIs as per Thursday's data were net sellers in equity and debt segments, In
equity segment, the gross buying was of Rs 4949.58 crore against gross selling
of Rs 5612.59 crore, while in the debt segment, the gross purchase was of Rs
963.32 crore with gross sales of Rs 1706.64 crore. Besides, in the hybrid segment,
the gross buying was of Rs 6.38 crore against gross selling of Rs 9.34 crore.
The US markets ended in red on
Thursday as investors grappled with a jump in reported coronavirus cases and
the virus' possible economic impact. Asian markets are trading mostly higher on
Friday as China is set to halve tariff rates on certain US products with effect
later during the day. Indian markets ended lower on Thursday after government
data showed a surprise drop in December industrial output and a rise in January
inflation to a six-year high. Today, the start of session is likely to be in
green following Asian peers and ahead to the wholesale inflation numbers to be
out later in the day. Traders will be getting encouragement with report that
foreign investors turned net buyers in the Indian markets in the December
quarter, pumping in a staggering $6.3 billion on the back of the government's
intent to bring reforms for supporting the economic growth. Some support will
also come as global ratings agency Standard and Poor's affirmed India's
sovereign rating at BBB- with stable outlook, saying the country's GDP growth
is likely to gradually recover towards longer-term trend rates over the next
two to three years. Besides, the Reserve Bank of India's (RBI) data showed that
banks credit and deposits grew at 7.13 percent and 9.91 percent to Rs 101.02
lakh crore and Rs 133.24 lakh crore, respectively, in the fortnight ended
January 31. Traders may take note of report that the Office of the US Trade
Representative (USTR) said India has been removed from the list of developing
countries and instead will now be considered a developed nation. However, there
may be some cautiousness with the International Monetary Fund's (IMF)
communications director Gerry Rice's statement that India's economy looks
weaker than the IMF projected earlier in January and the government needs to
focus on more ambitious structural and financial sector reform measures.
Meanwhile, markets watchdog Securities and Exchange Board of India (SEBI) has
issued guidelines for portfolio managers and said they cannot charge upfront
fee from clients. There will be some buzz in the banking stocks with Moody's
report that the RBI's recent asset recognition norms that allows banks not to
treat real estate loans as restructured for one year is credit negative for
Indian banks. Construction industry stocks will be in focus as India Ratings
revised its outlook for the construction industry to negative for FY21 on the
back of muted order inflows and subdued bank credit flow. There will be some
reaction in textile stocks with Union Textile Secretary Ravi Capoor's statement
that the Central government would address all issues in its new National
Textile Policy which is likely to be announced in a couple of months.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
12,174.65
|
12,134.42
|
12,220.27
|
BSE Sensex
|
41,459.79
|
41,295.63
|
41,666.62
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,683.40
|
37.20
|
36.13
|
38.13
|
SBI
|
625.16
|
327.45
|
322.65
|
331.60
|
Tata Motors
|
250.50
|
169.50
|
167.62
|
171.87
|
GAIL
|
246.88
|
130.30
|
128.97
|
132.07
|
ZEEL
|
221.31
|
237.15
|
231.97
|
241.67
|
HDFC Bank has signed MoU with the Odisha government, in a bid to strengthen the startup ecosystem in the state.
Bajaj Auto has launched BS-VI compliant version of its popular motorcycle Pulsar 150 at a starting price of Rs 94,956.
Tata Motors' wholly owned subsidiary -- JLR has launched the BS-VI version of its SUV Discovery Sport in both petrol and diesel engines.
Bajaj Finance has raised funds worth Rs 3000 crore through allotment of 30000 Secured Redeemable NCDs of face value of Rs 10 lakh each on Private Placement basis.