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NSE Intra-day chart (14 January 2019)
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Market Commentary 15 January 2019
Benchmarks to make positive start tacking firm Asian peers


Weak Indian industrial growth pulled key equity benchmarks down on Monday, with both the larger peers extending their losing streak for third consecutive session. Industrial growth measured by Index of Industrial Production (IIP) slipped to a 17-month low of 0.5% in November 2018, as compared to 8.5% in November 2017, on account of contraction in manufacturing sector, particularly consumer and capital goods. The previous low was in June 2017, when IIP growth contracted by 0.3 per cent. The markets made a negative opening of the week, impacted by Asian Development Bank (ADB) Country Director Kenichi Yokoyama's statement that farm loan waivers were against economic principles and cannot effectively address the agrarian distress. Domestic sentiments also got hot with private report stating that meeting the fiscal deficit target of 3.3 per cent of GDP for the current fiscal could be a challenge for the government, given the shortfall in GST collections, rising expenditure and slowing factory output. Further, in noon deals, easing wholesale price index (WPI) inflation failed to provide relief to the markets. WPI inflation eased for the second straight month in December 2018. According to the latest data released by the government, WPI slowed down to 3.80 percent in December from 4.64 percent in November. The trade remained lackluster throughput the day, following weak global markets. The street remained cautious as the Reserve Bank remained a net seller of dollars in November 2018, as it sold $ 644 million of the greenback on a net basis in the spot market. As against this, in November 2017, the Central bank had purchased $ 2.570 billion from the spot market and sold $ 1.706 billion, while in the reporting month, the monetary authority bought $ 3.127 billion from the spot market, and sold $ 3.771 billion. The trading sentiments failed to cheer with Finance Minister Arun Jaitley's statement that the government will forego revenue of close to Rs 1 trillion on all the items whose rates have revised to lower slabs under the goods and services tax (GST) regime. He also said that the various income tax benefits given to the middle class during the Narendra Modi government's existing tenure will lead to revenue foregone of Rs 97,000 crore. Finally, the BSE Sensex lost 156.28 points or 0.43% to 35,853.56, while the CNX Nifty was down by 57.35 points or 0.53% to 10,737.60.


The US markets ended in red on Monday after downbeat Chinese economic data added to signs of slowing growth around the world. Data from China's General Administration of Customs showed exports tumbled by 4.4 percent Year-over-Year in December, reflecting the biggest drop in two years. Street had expected exports to increase by 3 percent. The report also said Chinese imports plunged by 7.6 percent in December compared to the same month a year ago, defying expectations for a 5 percent jump. Besides, investors were jittery as the US corporate earnings season kicked off on Monday, with Citigroup reporting stronger-than-expected earnings. Though, the bank also said its fixed-income trading revenue fell 21 percent. Corporate profits grew massively in the first three quarters of last year, expanding by at least 25 percent in those time periods. S&P 500 earnings are expected to have grown by 12.6 percent in the fourth quarter. One of the big concerns for investors has been how much earnings growth will slow. Expectations for fourth-quarter earnings have come down a lot over the last month or two. So the reassurance or worry is going to be if companies lower guidance and say 2019 looks to be a challenging year than it's already baked in. Meanwhile, a lack of major US economic data also kept some traders on the sidelines along with uncertainty about the impact of the ongoing government shutdown. Dow Jones Industrial Average dropped 86.11 points or 0.36 percent to 23909.84, Nasdaq declined 65.56 points or 0.94 percent to 6905.92 and S&P 500 was down by 13.65 points or 0.53 percent to 2582.61.


Extending their losses for second straight session, Crude oil futures ended lower on Monday as global equity markets pulled back on further signs of weakness in China, the world's second-largest economy. Weak economic data from China raised concerns of slowing global growth, especially after weak industrial output data from Europe. However, last week, prices for oil futures rose to their highest levels since early December as data revealed declines in output from major oil producers. The price climb helped to propel oil out of a bear market, defined as a 20% decline from a recent peak. Benchmark crude oil futures for February dropped $1.08 or 2.1 percent to settle $50.51 a barrel on the New York Mercantile Exchange. March Brent crude declined $1.49 or 2.5 percent to settle at $58.99 a barrel on London's Intercontinental Exchange.


Indian rupee further weakened to nearly one month low against the US dollar on Monday, on increased demand for the American currency from importers and banks. Sentiments remained dampened after India's industrial output hit a 17-month low of 0.5 per cent in November as compared to 8.1 per cent in October mainly on the back of contraction in manufacturing sector, mining, capital goods and consumer durable goods. Traders failed to get relief with data showing that Inflation based on wholesale prices fell to 8-month low of 3.80 percent in December, 2018, on softening prices of fuel and some food items. Besides, the weak trade in the local equity market hit the sentiment of the domestic currency. On the global front, dollar edged lower, as investors expect the Fed to halt its monetary tightening policy after Chairman Jerome Powell last week reiterated that the central bank has the ability to be patient on monetary policy given that inflation remains stable. Finally, the rupee ended at 70.92, 43 paise weaker from its previous close of 70.49 on Friday.


The FIIs as per Monday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 3219.89 crore against gross selling of Rs 3845.03 crore, while in the debt segment, the gross purchase was of Rs 1440.30 crore with gross sales of Rs 1232.74 crore. Besides, in the hybrid segment, the gross selling was of Rs 5.44 crore against no buying.


The US markets fell on Monday, extending their losses for second straight session, after downbeat Chinese economic data added to signs of slowing growth around the world. Asian markets were trading in green on Tuesday, as markets recovered from the impact of weak economic data in Europe and China Monday that sparked concerns about slowing global growth. Indian markets ended lower for third straight session on Monday mirroring losses across the globe after an unexpected contraction in Chinese exports raised fears of a sharper global slowdown. Today, the markets are likely to make positive start tracking firm Asian peers coupled with easing retail inflation. Retail inflation declined to an 18-month low of 2.19 per cent in December 2018 mainly on account of sliding prices of fruits, vegetables and fuel. The inflation based on the Consumer Price Index (CPI) was 2.33 per cent in November and 5.21 per cent in December 2017. The previous low inflation was 1.46 per cent in June 2017. CPI is the main price gauge that the Reserve Bank of India (RBI) tracks. Traders may take note of Former chief economic advisor Kaushik Basu's statement that the RBI could slightly reduce interest rate to boost growth. Also, apex industry body ASSOCHAM stated that Wholesale Price Index (WPI) has recorded 3.80 per cent for December 2018 as compared to 4.64 for the previous month due to sharp decline in price of vegetables, onion and fruits. The continuing deceleration in the growth of WPI and softening of global fuel prices provide ample opportunity to MPC (monetary policy committee) to cut down policy rate at earliest which will kick start investment and revival in overall industrial growth. Meanwhile, domestic ratings agency ICRA has said there is a compelling case to revisit the restrictive retail foreign direct investment (FDI) policy as India has not been able to get sizeable investments despite opportunities. However, there may be some cautiousness with a private report that the RBI could pay between Rs 20,000 crore and Rs 25,000 crore to the government, but even that would not be enough for it to meet its non-tax revenue target of Rs 2.45 trillion. There are already concerns over the goods and services tax (GST) collections and the government overshooting expenditure in this fiscal year (2018-19 or FY19). There will be some buzz in the banking sector stocks with report that in a bid to align with the best corporate practices, the Finance Ministry has asked the public sector banks to gradually bring down the government's equity to 52 per cent. There will be some result reactions too, to keep the markets in action.


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



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  • Yes Bank has signed a MoU with Kia Motors for finance and banking solutions. 
  • Maruti Suzuki's all-new WagonR will soon entice customers with its robust body language, wider stance, dynamically crafted interiors and spacious cabin with best-in-its class boot space. 
  • NTPC has sought more coal from Coal India's subsidiary--Northern Coalfields under the Flexi Utilisation of Domestic Coal scheme. 
  • L&T has entered into a MoU with Hindustan Aeronautics to manufacture the industry-made Polar Satellite Launch Vehicle.
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