After a sigh of relief in the
previous trading session, Indian equity benchmarks again bled on Wednesday,
with Sensex and Nifty closing lower by losses of over half a percent each.
After a firm start, key indices remained positive for the most part of the day,
aided by rating agency Crisil's latest report stating that recovery of stressed
assets through Insolvency and Bankruptcy Code (IBC) doubled to Rs 70,000 crore
in 2018-19, as against Rs 35,000 crore recovered using other resolution mechanism
including Debt Recovery Tribunal (DRT), Securitisation and Reconstruction of
Financial Assets (Sarfaesi), Enforcement of Securities Interest Act, and Lok
Adalat. The street took encouragement with a private report that the Indian
private equity (PE) market remained a hotbed for deal making in 2018 with
investments across 793 deals at $26.3 billion, which was the second highest in
the last decade in terms of total investment value. However, the markets turned
volatile during late afternoon session, mirroring weak European markets.
Markets witnessed heavy selling in last leg of trade which dragged both the
major indices near intraday lows, as domestic sentiments got hampered with a
private report stating that venture investments in the country declined marginally
to $26.3 billion in 2018, even though there was a surge in number of deals
announced. Investments by venture capital and private equity funds in the
country declined in 2018 from $26.8 billion in the previous year. Besides,
market participants also got cautious, after domestic rating agency India
Ratings said that a fall in recoveries due to weak property markets in metros,
coupled with rising delinquencies has led to weakening of the loans against
property (LAP) segment for financiers. It further noted that other segments,
especially commercial vehicle loans which were not doing so good recently, are
showing signs of improvement. Finally, the BSE Sensex slipped 203.65 points or
0.55% to 37,114.88, while the CNX Nifty was down by 65.05 points or 0.58% to
11,157.00.
The US markets ended higher on
Wednesday on reports that President Donald Trump plans to delay imposing steep
tariffs on auto imports. Reports indicated Trump plans to delay imposing the
auto tariffs by up to six months in order to allow negotiations to continue.
Trump faces a May 18 deadline to decide whether to slap a tariff of as much as
25% on imported cars and parts due to national security concerns. Besides, some
support also came in as Homebuilder confidence has improved by much more than
anticipated in the month of May, according to a report released by the National
Association of Home Builders (NAHB). The report said the NAHB/Wells Fargo
Housing Market Index climbed to 66 in May from 63 in April, while Street had
expected the index to inch up to 64. Following declines in late 2018 due to
higher interest rates and concerns over slower growth, the index has reached
its highest level since October of 2018. However, industrial production in the
US unexpectedly showed a notable decrease in the month of April, according to a
report released by the Federal Reserve. The Fed said industrial production fell
by 0.5% in April following a revised 0.2% uptick in March. Street had expected
production to come in unchanged compared to the 0.1% dip originally reported
for the previous month. The unexpected drop in production partly reflected a sharp
pullback in utilities output, which plunged by 3.5% in April after jumping by
2.2% in March. Manufacturing output also slumped by 0.5% in April after coming
in unchanged in the previous month. Dow Jones Industrial Average surged 115.97
points or 0.45 percent to 25648.02, Nasdaq rose 87.65 points or 1.13 percent to
7822.15 and S&P 500 was up by 16.55 points or 0.58 percent to 2850.96.
Crude oil futures ended higher on
Wednesday as investors focused on rising Middle East tensions. The US ordered
all nonemergency staff to leave Iraq immediately amid heightened tensions with
Iran over recent attacks against oil tankers and facilities in the Persian Gulf
region. However, the Energy Information Administration (EIA) has said that US
crude supplies rose by 5.4 million barrels for the week ended May 10. Traders
expected a fall of 1.4 million barrels. The EIA also said that gasoline
inventories were down 1.1 million barrels, while distillate stockpiles edged up
by 100,000 barrels last week. Benchmark crude oil futures for June gained 24
cents or 0.4 percent to settle at $62.02 a barrel on the New York Mercantile
Exchange. July Brent crude rose 53 cents or 0.7 percent to settle at $71.77 a
barrel on London's Intercontinental Exchange.
Gaining for the second day, Indian rupee ended stronger
against the US dollar on Wednesday, on continued selling of the US currency by
banks and exporters. Traders took some solace with rating agency Crisil's
report that recovery of stressed assets through the Insolvency and Bankruptcy
Code (IBC) was two-times at Rs 70,000 crore compared to that through other
mechanisms in 2018-19 but resolution timelines for bad loans still remains an
issue. However, late hour sell-off in domestic equity market along with
dollar's strength against major global currencies capped the gains. On the
global front, euro held at a one-week low on Wednesday, ignoring data from Germany
that showed the economy returned to growth in the first quarter, as trade
tensions between the world's two biggest economies cast a shadow over risk
appetite. Finally, the rupee ended at 70.34, 10 paise stronger from its
previous close of 70.44 on Tuesday.
The FIIs as per Wednesday'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 4678.80 crore against gross
selling of Rs 6636.81 crore, while in the debt segment, the gross purchase was
of Rs 2060.57 crore with gross sales of Rs 959.79 crore. Besides, in the hybrid
segment, the gross buying was of Rs 29.54 crore against gross selling of Rs
27.82 crore.
The US markets ended higher on
Wednesday on hopes that thawing trade tensions will boost the outlook for the
world economy. Asian markets are trading mixed on Thursday on reports that US
President Donald Trump is planning to delay tariffs on auto imports. Indian markets
ended sharply lower on Wednesday, after a day's breather, mainly on account of
late hour sell-off as fears of worsening US-China trade tensions prompted
profit booking. Today, the markets are likely to make a cautious start amid
mixed cues from Asian peers. There will be some cautiousness with report that
India's export growth slid to a four-month low of 0.64% in April as shipments
of engineering goods, gems and jewellery, leather and other products declined,
widening the trade deficit to a five-month high. Imports increased by 4.5%, the
highest growth in the last six months as crude oil and gold shipments shot up
in the month. Also, traders will be concerned about report monsoon rains are
expected to hit Kerala on June 6, five days after its normal onset date. The
India Meteorological Department (IMD) also said the southwest monsoon arrival
over the State is likely to be slightly delayed. The agriculture in India is
heavily dependent on the monsoon rains due to lackluster irrigation facilities.
Meanwhile, the corporate affairs ministry has amended the rules pertaining to
incorporation of companies to provide more clarity and uniformity in choosing
names for the companies. The ministry has brought in amendments to the
Companies (Incorporation) Rules, 2014. The move also comes against the backdrop
of instances where applications by companies for registering their names have
been rejected due to various reasons, including trademark issues and proposed
names being too general. There may be some reaction in sugar sector stocks with
the US Department of Agriculture's (USDA) statement that India's sugar
production is likely to decline 8.4% to 30.3 million tonnes for the second
straight year in the 2019-20 marketing year that would begin from October
because of likely fall in sugarcane output. There will be some buzz in the
power sector stocks with the Central Electricity Authority estimation that
power generation from thermal, hydel and nuclear plants is expected to grow
6.5% this fiscal, nearly double of last year's rise of 3.5%. There will be some
important earnings announcements too to keep the markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,157.00
|
11,100.37
|
11,250.22
|
BSE Sensex
|
37,114.88
|
36,921.94
|
37,433.74
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
958.99
|
142.95
|
138.40
|
150.90
|
ZEEL
|
432.82
|
322.35
|
304.60
|
344.85
|
Tata Motors
|
314.28
|
169.45
|
162.58
|
181.13
|
SBI
|
279.32
|
312.10
|
309.43
|
316.33
|
ITC
|
178.94
|
297.05
|
292.93
|
300.23
|
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