Indian equity markets fell hard
on Wednesday's trading session, with Sensex & Nifty plunging by 267 and 98
points, respectively. After a cautious start, key indices traded lackluster
throughout the day, amid a private report stating that India's economic growth
is set to slow further in the April-June quarter of this year to 5.7 per cent
amid contraction in consumption, weak investments and an under-performing
service sector. Traders took a note of another report that in a bid to achieve
the fiscal deficit target, the government has cut down on its capital
expenditure by 80% in February and March. It said the government is
contributing to the slowdown rather than uplifting the corporate sector.
Markets extended their losses in the second half of the session to settle near
day's low points. The street overlooked the Retirement fund body, Employment
Provident Fund Organisation's (EPFO) latest Provisional Estimate of Net Payroll
data report showing that India created 12,23,675 new jobs in the month of June
2019 as against 8,56,870 in May 2019. Also, market participants paid no heed
towards the Union Housing and Urban Affairs Minister Hardeep Singh Puri's
statement that the government is set to achieve its target of providing housing
for all in 2020 itself, two years before its stated deadline of 2022. Finally,
the BSE Sensex lost 267.64 points or 0.72% to 37,060.37, while the CNX Nifty
was down by 98.30 points or 0.89% to 10,918.70.
The US markets settled higher on
Wednesday following the release of the minutes of the Federal Reserve's latest
monetary policy meeting, which showed the central bank intends to remain
flexible regarding future changes to interest rates. Citing a lack of clarity
about when the risks to the US economy will be resolved, the Fed said the
members plan to pay close attention to the implications of incoming data for
the economic outlook. Besides, the strength on markets also reflected a
positive reaction to upbeat earnings news from retail giants Target (TGT) and
Lowe's (LOW). Shares of Target spiked by 20.4 percent after the retailer
reported better than expected second quarter results and raised its full-year
earnings guidance. Home improvement retailer Lowe's also surged up by 10.3
percent after reporting second quarter results that exceeded street estimates
on both the top and bottom lines. The better than expected results from the
retailers added to optimism that strength in consumer spending will continue to
support the US economy despite early indicators of a looming recession. On the
economic front, existing home sales in the US showed a notable rebound in the
month of July, according to a report released by the National Association of
Realtors (NAR). NAR said existing home sales jumped by 2.5 percent to an annual
rate of 5.42 million in July after slumping by 1.3 percent to a revised rate of
5.29 million in June. Street had expected existing home sales to surge up by
2.3 percent to a rate of 5.39 million from the 5.27 million originally reported
for the previous month. The report said the median existing home price for all
housing types in July was $280,800, down 1.6 percent from $285,300 in June but
up 4.3 percent from $269,300 in the same month a year ago. Dow Jones Industrial
Average surged 240.29 points or 0.93 percent to 26202.73, Nasdaq gained 71.65
points or 0.90 percent to 8020.21 and S&P 500 was up by 23.92 points or
0.82 percent to 2924.43.
Crude oil futures ended lower on
Wednesday despite the government reported a weekly decrease in domestic crude
supplies. The drop in stockpiles was less than expected. The Energy Information
Administration (EIA) reported that US crude supplies fell by 2.7 million
barrels for the week ended August 16. The EIA data also showed that inventories
of gasoline edged up by 300,000 barrels, while distillate stockpiles rose by
2.6 million barrels last week. Besides, concerns over energy demand too
continued to pressure prices. Benchmark crude oil futures for October declined
45 cents or 0.8 percent to settle at $55.68 a barrel on the New York Mercantile
Exchange. However, October Brent rose 27 cents or 0.5 percent to settle at
$60.30 a barrel on London's Intercontinental Exchange.
Indian
rupee staged a recovery after two sessions of decline and ended higher against
dollar on Wednesday, on fresh selling of the American currency by banks and
exporters. Traders took a note of the Retirement fund body, Employment
Provident Fund Organisation's (EPFO) latest Provisional Estimate of Net Payroll
data report showed that India created 12,23,675 new jobs in the month of June
2019 as against 8,56,870 in May 2019. However, gains remain capped as
cautiousness remained in markets with a private report stating that India's
economic growth is set to slow further in the April-June quarter of this year
to 5.7 per cent amid contraction in consumption, weak investments and an
under-performing service sector. On the global front, euro struggled to make
headway against a resilient dollar on Wednesday while foreign exchange markets
remained largely calm ahead of a crucial meeting of central bankers later this
week. Finally, the rupee ended at 71.55, 16 paise stronger from its previous
close of 71.71 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
5380.42 crore against gross selling of Rs 5788.67 crore, while in the debt
segment, the gross purchase was of Rs 4489.02 crore with gross sales of Rs
2592.36 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.47
crore against gross selling of Rs 3.58 crore.
The US markets rose on Wednesday
following the release of minutes from the Federal Reserve's July monetary
policy meeting, as fresh optimism over consumer spending countered recent
worries over economic growth. Asian markets are trading mostly higher on
Thursday following the overnight gains on Wall Street. Indian markets ended
lower for second straight day on Wednesday on the back of heavy selloff as
investors remained risk-averse due to uncertainties over economic growth.
Today, the markets are likely to make a cautious start. Traders will be
concerned with Care Ratings' report that the ongoing economic slowdown has
started hurting corporates as well, with companies reporting a sharp decline in
both revenue and profit growth numbers in the June quarter. India Inc's net
sales growth for the June quarter slid to 4.6 per cent as against 13.5 per cent
for the same period last year, while the net profit growth moderated to 6.6 per
cent as compared to last year's 24.6 per cent. There will be some cautiousness
with the central bank's statement that weakening of domestic growth impulses
prompted the Reserve Bank of India governor Shaktikanta Das to opt for an
unconventional rate cut of 35 basis points to push economic activities early
this month. However, some support may come later in the day with report that
the government is planning to boost domestic production of chemicals and
petrochemicals to cut down imports and make India a manufacturing hub for the
sector. Traders may take note of report that public sector banks will embark on
second round of two-day bottom-up ideation exercise beginning Thursday for
further streamlining the banking sector to help the nation become a $5 trillion
economy in five years. Meanwhile, the Securities and Exchange Board of India
(SEBI) has eased the process for on-boarding overseas investors. The market
regulator also introduced an informant mechanism to gather better evidence
and crack down on insider-trading cases. The SEBI board clarified on the
debt-to-equity ratio companies need to maintain to be eligible for buybacks.
There will be some buzz in the auto stocks with Road Transport Minister Nitin
Gadkari's statement that the government has set no deadline to ban the
production of petrol, diesel vehicles or for automobile manufacturers to switch
to electric vehicles (EVs). There will be some reaction in reality stocks with
a private report that investments in the real estate sector tripled to Rs 1.4
lakh crore during 2014-18, mainly backed by institutional investments. As per
report, the realty sector witnessed investments to the tune of Rs 46,500 crore
between 2009-2013 and Rs 1.4 trillion during 2014-18. Also, telecom stocks will
be focus with Telecom Regulatory Authority of India (Trai) report showing that
prices of mobile data have fallen drastically by about 95 percent to Rs 11.78
per gigabyte (GB) but cumulative revenue of telecom operators has risen by
around 2.5 times to Rs 54,671 crore in the last five years.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,918.70
|
10,872.17
|
10,999.72
|
BSE Sensex
|
37,060.37
|
36,919.74
|
37,303.77
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in
Lacs)
|
Yes Bank
|
2,282.13
|
65.40
|
62.80
|
69.75
|
Tata Motors
|
835.10
|
112.40
|
106.93
|
120.43
|
SBI
|
282.26
|
277.40
|
273.93
|
283.23
|
Indiabulls Housing Finance
|
235.56
|
483.55
|
463.20
|
512.35
|
ITC
|
147.36
|
241.45
|
239.23
|
245.28
|
HCL Technologies has opened a new delivery centre in Hamilton, New Zealand.
USFDA has issued eight observations to Dr Reddy's Laboratories after the inspection of Formulations Manufacturing plant at Duvvada, Visakhapatnam in Andhra Pradesh.
Hindustan Unilever is all set to launch detergent brand Love & Care, a new India-focused product.
Maruti Suzuki has launched its all new premium MPV, the XL6.