Indian equity benchmarks made a smart recovery on Tuesday
to end the trading session near their intraday high points. The markets open on
a cautious note, as India's industrial production measured by Index of
Industrial Production (IIP) grew at the slowest pace in four months at 4.5% in
September 2018, with poor performance of mining sector and lower offtake of
capital goods. Anxiety also came on the street with Moody's Investors Service
report stating that global credit conditions will weaken in 2019 as economic
growth decelerates, funding costs increase, liquidity tightens and market
volatility returns. Some concerns came with the report that several ministries
have flagged major concerns over ongoing negotiations for the Regional
Comprehensive Economic Partnership (RECP) agreement, with cheap imports from
China being the biggest fear, apart from expectations that there will only be
limited gains for the country. Domestic sentiments were weak during morning
deals with SBI's report that the sharp decline in the headline inflation print
to 3.31% for October a year-year-low will result in a prolonged pause in the
rates, but raises a big question mark on the Reserve Bank's inflation
forecasting. However, the indices managed to erase all of their losses in
afternoon deals, supported by firm opening of European markets coupled with easing
inflation. India's retail inflation based on Consumer Price Index (CPI)
softened to a one-year low of 3.31% in the month of October 2018, the back of
cheaper kitchen staples, fruits and protein-rich items. Traders took
encouragement with a report stating that India is pushing for liberalising
norms to promote services trade with 15 other countries including China as part
of a mega free trade agreement as it looks for a balanced pact with these
nations. Finally, the BSE Sensex gained
331.50 points or 0.95% to 35,144.49, while the CNX Nifty was up by 100.30
points or 0.96% to 10,582.50.
The US markets ended Tuesday's choppy trading session
mostly lower, as a surge in optimism over trade talks with China was offset by
a plunge in crude prices. Besides, traders continued to express uncertainty
about the global economic outlook and the impact of an anticipated increase in
interest rates. A notable drop by Boeing (BA) weighed on the Dow after a report
said the aerospace giant withheld information about potential hazards
associated with the automated stall-prevention system on its 737 MAX 8 and MAX
9 models. Home improvement retail giant Home Depot (HD) also closed lower
despite reporting better than expected third quarter results and raising its
full-year guidance. Investors shrugged off a report from the Wall Street
Journal indicating high-level US-China trade talks have resumed ahead of a
meeting between US President Donald Trump and Chinese President Xi Jinping
later this month. The Journal said Treasury Secretary Steven Mnuchin and
Chinese Vice Premier Liu He spoke by telephone on Friday about a deal that
would ease trade tension. Traders seemed reluctant to make more significant
moves ahead of the release of closely watched reports on consumer price inflation,
retail sales and industrial production in the coming days. Dow Jones Industrial
Average declined 100.69 points or 0.40 percent to 25,286.49 and S&P 500
slipped 4.04 points or 0.15 percent to 2,722.18, while Nasdaq edged up by 0.01
points to 7,200.88.
Extending southward journey for 12th straight session,
crude oil futures ended significantly lower on Tuesday, as rising output and
likely fall in demand for oil due to weak outlook for global economic growth
weighed on the commodity. This is the lowest front-month contract finish since
November 16, 2017, and biggest one-day percentage decline in more than three
years. According to a report released by the Energy Information Administration
(EIA), crude oil production is expected to increase by 113,000 barrels a day in
December to 7.9444 million barrels a day. Benchmark crude oil futures for December fell $4.24 or
7.1 percent to settle at $55.69 a barrel on the New York Mercantile Exchange.
January Brent crude declined $4.65 or 6.6 percent to settle at $65.47 a barrel
on London's Intercontinental Exchange.
Reversing
previous session's losses, Indian rupee staged a smart recovery against dollar
on Tuesday, owing to easing global crude oil prices and better-than-expected
macro-economic data on the domestic front. The consumer price index (CPI)
inflation eased to 3.31 percent in the month of October 2018 as compared to
3.58 percent in October 2017 on low food prices. The retail inflation number is
the lowest since September 2017 when it touched 3.28 percent. Also, the prices
of vegetables fell by 8.06 percent in the month of October in comparison to a
4.15 percent contraction in September. That apart, the rupee derived its
strength from strong gains in the local equity markets as well as strength of
other Asian currencies against dollar. On the global front, euro drifted up
from a 16-month low on Tuesday as a pause in the dollar's rally prompted some
investors to purchase the single currency, though concerns about Italy's budget
proposals and Brexit negotiations capped some gains. Finally, the rupee ended
at 72.67, 22 paise stronger from its previous close of 72.89 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 6191.89 crore against gross
selling of Rs 3798.75 crore, while in the debt segment, the gross purchase was
of Rs 712.89 crore with gross sales of Rs 1334.85 crore. Besides, in the hybrid
segment, the gross buying was of Rs 1.02 crore against gross selling of Rs 0.09
crore.
The US markets ended mostly lower after a volatile
session on Tuesday as traders continued to express uncertainty about the global
economic outlook and the impact of an anticipated increase in interest rates.
Asian markets were trading mixed after volatile session on Wall Street. Indian
equity markets ended with gains of around one per cent on Tuesday on fresh fall
in oil prices and heavy buying in oil & gas, capital goods, infrastructure
and bank stocks amid firm global cues. Today, the start is likely to be mildly
positive amid falling crude oil prices. Traders will be getting some
encouragement as the Securities and Exchange Board of India (SEBI) tightened
disclosure and review norms for credit rating agencies (CRAs). SEBI ordered
CRAs to analyse deterioration in the liquidity conditions of an issuer, while
monitoring its repayment schedules and taking into account any asset-liability
mismatches. These measures will enable investors to understand underlying
rating drivers better and make more informed investment decisions. Meanwhile,
the Reserve Bank of India (RBI) has announced it will inject Rs 12,000 crore
into the system through purchase of government securities on November 15. Based
on an assessment of prevailing liquidity conditions and also of the durable
liquidity needs going forward, the RBI has decided to conduct purchase of the
following government securities under Open Market Operations. Besides, traders
will be eyeing a macro data of wholesale price inflation for October scheduled
to be release later in the day. The banking sector stocks will be in action on
report that the government is of the view that the RBI should resort to Basel
III norms for capital adequacy in banks rather than the present stricter
guidelines which restrict the lending capacity of lenders. Agriculture sector
stocks too may see some action as Agri input companies posted decent growth in
revenue and net profit for the quarter ended September 2018, due to an increase
in sales volume on normal monsoon rainfall and price hikes. There will be some
buzz in the solar sector stocks on private report which said that India's solar
capacity addition in the current financial year is expected to be 55% short of
the previous year, at 4.1 GW as the industry continues to face policy and execution
challenges. Also, there will be some buzz in the oil and gas stocks on report
that India's fuel demand rose 4.0% in October compared with the same month last
year. Besides, there will be lots of important earnings announcements to keep
the markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,582.50
|
10,483.28
|
10,638.98
|
BSE Sensex
|
35,144.49
|
34,815.21
|
35,330.76
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
SBI
|
256.34
|
278.05
|
274.37
|
280.72
|
Tata Motors
|
221.90
|
179.50
|
177.57
|
182.22
|
Yes Bank
|
190.14
|
225.45
|
221.35
|
228.20
|
ICICI Bank
|
176.85
|
360.90
|
351.82
|
365.97
|
IOC
|
148.85
|
141.40
|
138.17
|
143.47
|
Tata Motors Group global wholesales in October 2018, including Jaguar Land Rover, were at 1,09,597 nos., higher by 6%, as compared to October 2017.
M&M has launched a new variant of its popular SUV Scorpio priced at Rs 13.99 lakh.
Tata Steel has begun the phase-II expansion of Kalinganagar plant to 8 million tons per annum capacity from 3 mtpa.
Reliance Industries is planning to make a fresh investment of Rs 3,000 crore in Odisha.