Indian equity benchmarks pared
most of the early gains and ended flat on Monday, with Sensex & Nifty
ending higher just by 52 and 6 points, respectively. Markets made a fabulous
start of the day, aided by Fitch Solutions' statement that the Reserve Bank of
India (RBI) is expected to cut interest rates by 40 basis points before the end
of the current financial year as monetary easing till now appears to be
insufficient in boosting economic growth. Sentiments got boosted amid reports
that private equity and venture capital investments in India crossed $8 billion
in July -- the highest fund infusion in a month by PE/VC funds -- amid strong
investment activity in infrastructure and real estate asset classes. But, in
the last hour of the trade, key indices pared most of their gains, as the
Australia and New Zealand Banking Group (ANZ) slashed its forecast for India's
economic growth to 6.2% in the financial year ending next March from a previous
estimate of 6.5%, warning it would be tough for authorities to engineer a
turnaround. However, markets managed to settle in positive terrain, supported
with RBI Governor Shaktikanta Das' statement that the business community has
been facing various challenges at the moment and growth is a matter of highest
priority for the monetary policy committee (MPC) of the central bank. Finally,
the BSE Sensex gained 52.16 points or 0.14% to 37,402.49, while the CNX Nifty
was up by 6.10 points or 0.06% to 11,053.90.
The US markets ended higher on
Monday on reports that President Donald Trump's administration is once again
delaying restrictions on Chinese tech giant Huawei. Commerce Secretary Wilbur
Ross said a temporary general license set to expire on Monday will be extended
for another 90 days. The move will allow Huawei to continue purchasing supplies
from US companies despite being placed on an economic blacklist back in May.
Rose said there is another 90 days for the US telecom companies, some of the
rural companies are dependent on wild ways. So we are giving them a little more
time to wean themselves off. But there are no specific licenses being granted
for anything. Further, the continued rebound on markets also came after Trump's
economic advisers took to the Sunday talk shows to downplay concerns about a
possible recession. Meanwhile, White House trade adviser Peter Navarro said it
is a certainty the US will have a strong economy through 2020 and beyond with a
bull market, thanks to stimulus from major economies and the largest trade deal
ever in history. He also insisted the Fed will be lowering rates as part of
that global stimulus push. Besides, the strength on markets also came amid a
continued rebound in bond yields on optimism about new global stimulus. Dow
Jones Industrial Average surged 249.78 points or 0.96 percent to 26135.79,
Nasdaq gained 106.82 points or 1.35 percent to 8002.81 and S&P 500 was up
by 34.97 points or 1.21 percent to 2923.65.
Crude oil futures ended higher on
Monday after Yemen's Houthi rebels launched a drone attack over the weekend on
one of Saudi Arabia's largest oil fields. The Houthis said they targeted the
Shaybah oil field, which is owned by Saudi Arabian Oil Company, or Aramco, and
holds about 14 billion barrels of oil. Aramco said a fire was extinguished at a
natural-gas processing plant and that there were no injuries and no disruptions
to production at the field, which produces around 1 million barrels of oil a
day. Besides, gains were extended, buoyed by encouraging comments from
President Donald Trump and other officials on trade talks, along with a move by
China over the weekend to lower borrowing costs for companies. Benchmark crude
oil futures for October rose $1.33 or 2.4 percent to settle at $56.14 a barrel
on the New York Mercantile Exchange. October Brent rose $1.10 or 1.9 percent to
settle at $59.74 a barrel on London's Intercontinental Exchange.
Snapping
its two-day winning streak, Indian rupee ended weaker against dollar on Monday,
amid strong demand for the American currency from importers. Sentiments turned
pessimistic as the Australia and New Zealand Banking Group (ANZ) slashed its
forecast for India's economic growth to 6.2% in the financial year ending next
March from a previous estimate of 6.5%, warning it would be tough for
authorities to engineer a turnaround. Traders overlooked Fitch Solutions'
statement that the Reserve Bank of India (RBI) is expected to cut interest
rates by 40 basis points before the end of the current financial year as
monetary easing till now appears to be insufficient in boosting economic
growth. Dollar's strength against major global currencies overseas also weighed
on the local unit. On the global front, Sterling fell back from a near
three-week high against the euro on Monday but sentiment towards the pound was
better than in recent sessions as investors hoped Britain and the European
Union would make some progress in Brexit talks. Finally, the rupee ended at
71.43, 29 paise weaker from its previous close of 71.14 on Friday.
The
FIIs as per Monday's data were net buyers in both equity and debt segments. In
equity segment, the gross buying was of Rs 8548.88 crore against gross selling
of Rs 7230.42 crore, while in the debt segment, the gross purchase was of Rs
3222.88 crore with gross sales of Rs 2657.04 crore. Besides, in the hybrid
segment, the gross buying was of Rs 2.25 crore against gross selling of Rs 3.14
crore.
The US markets ended higher on
Monday amid optimism about a potential resolution to the trade war and a limit
to its economic fallout. Asian markets are trading mostly in green on Tuesday
amid signs of progress on trade negotiations and speculation of government
stimulus to shore up economic growth. Indian markets cut most of gains and
ended marginally higher on Monday on the back of late hour selling pressure in
auto and PSU bank counters. Today, the markets are likely to make a cautious
start as markets await a relief package from the government to revive growth.
There will be some cautiousness with report that former Reserve Bank of India
(RBI) Governor Raghuram Rajan has called slowdown in the economy very worrisome
and said the government needs to fix the immediate problems in power and
non-bank financial sectors and come out with a new set of reforms to energise
private sector to invest. Traders will be concerned with Care Ratings' report
that India's jobs scene -- with unemployment at a 45-year high -- is looking
gloomy with hiring activity slowing across most sectors. Also, some
cautiousness may come with report that the Reserve Bank of India will sell five
government securities worth Rs 17,000 crore on Friday. The move will suck out
liquidity from the financial system. However, some respite may come later in
the day with Finance Minister Nirmala Sitharaman's statement that corporate tax
rate for companies with over Rs 400 crore turnover will be gradually cut to 25%
and the government will support wealth creators. Traders may take note of a
report that a top American lawmaker has urged the Trump Administration to
resolve the trade tension with India as soon as possible, saying the dispute
benefits none. There will be some buzz in the auto stocks with Federation of
Automobile Dealers Associations' (FADA) report that retail sales of passenger
vehicles (PV) declined by 11% to 2,43,183 units in July as compared to the same
period last year, hit by weak demand across the country. The non-banking
financial companies (NBFCs), housing finance companies (HFCs) will be in focus
as the government has removed the redemption reserve requirement for issuance
of debentures by NBFCs, HFCs and listed firms, a move aimed at reducing cost
for raising capital. There will be some reaction in agriculture stocks with
government data showing that India's foodgrains production is almost flat at
284.95 million tonnes (MT) in 2018-19 crop year due to fall in pulses and
coarse cereals output even as the country harvested record rice as well as
wheat crops.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,053.90
|
11,012.20
|
11,121.25
|
BSE Sensex
|
37,402.49
|
37,267.69
|
37,628.08
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,276.52
|
76.65
|
74.85
|
79.60
|
Tata Motors
|
231.95
|
120.80
|
119.67
|
122.27
|
Indiabulls Housing Finance
|
228.35
|
536.85
|
520.95
|
562.70
|
SBI
|
198.31
|
286.85
|
284.43
|
290.83
|
ITC
|
125.25
|
251.55
|
249.23
|
255.58
|
Tech Mahindra is all set to divest 73.38% equity investment held by the Company in FixStream Networks Inc., USA, a subsidiary company.
HCL Technologies has signed a MoU with MADC for expansion of its MIHAN campus in Nagpur, in-line with HCL's plan for Tier-II cities in the country.
Maruti Suzuki is looking for tax relief for hybrid and CNG cars in addition to EVs in order to promote green mobility in the country.
Tata Motors has launched offers across its Tiago, Tigor, Hexa and Nexon range sold in India during this monsoon.