Wednesday turned-out to be a
disappointing day of trade for Indian equity benchmarks, with frontline gauges
ending below their crucial 34,400 (Sensex) and 10,450 (Nifty) levels, on the
back of high fuel prices and weakness in rupee. Markets started the session on
pessimistic note as sentiments remained downbeat on report that fuel prices hit
a fresh record high on Tuesday as petrol prices rose 30 paise to Rs 84.70 per
litre in Mumbai. Similarly, diesel prices rose 27 paise to Rs 72.48 per litre
in Mumbai. Anxiety spread among investors as former Union Finance Minister P
Chidambaram criticised the Centre for the fuel price hike and claimed that the
rate can be reduced by Rs 25 per litre but the government is not doing it.
Traders paid no heed towards Employment Provident Fund Organisation's (EPFO)
latest Overall Payroll Data report showing that India created 39.36 lakh new
jobs in seven months period till March 2018. As per the report, total 6,13,134
new payrolls were created during March 2018 as against 5,89,034 created in the
previous month, registering a growth of 4.09%. Selling got intensified in
second half of the trade after rupee touched fresh 16-month low of 68.29
against US Dollar. The market participants overlooked report that the
agriculture ministry released the Model Contract Farming Act, 2018, which lays
emphasis on protecting the interests of farmers, considering them as weaker of
the two parties entering into a contract. Traders shrugged off private report
that an open data ecosystem will impact India's GDP by $22 billion, or the
equivalent of two times the amount raised through the sale of 4G spectrum in
2017. The report claims that an open data ecosystem has the power to double
farmers' income by 2022, provide Universal Health coverage and provide
microloans to three million plus micro, small and medium enterprises among
other benefits. Finally, the BSE Sensex declined 306.33 points or 0.88% to
34,344.91, while the CNX Nifty was down by 106.35 points or 1.01% to 10,430.35.
The US markets ended higher on
Wednesday after the minutes from the Federal Reserve's May 2 meeting confirmed
that policy makers support a June rate increase and are maintaining a calm
attitude about the inflation outlook. The markets started the session in red
terrain and remained under pressure in early deals as geopolitical and trade
concerns continued to dent investor sentiment. However, Markets rebounded
modestly as Fed minutes appeared to have reassured investors that the central
bank will not be too aggressive with raising interest rates. The probability of
three more rate hikes by the end of this year instead of two slipped
immediately after the minutes. According to CME's FedWatch tool, Fed funds
futures market is pricing in less than a 40% chance of a fourth rate hike in
2018. On the economic front, the Commerce Department released a report showing
a pullback in new home sales in the month of April. The report said new home
sales fell by 1.5 percent to an annual rate of 662,000 in April after jumping
by 2 percent to a revised rate of 672,000 in March. The street had expected new
home sales to drop to a rate of 679,000 from the 694,000 originally reported
for the previous month. The Dow Jones Industrial Average surged 52.40 points or
0.21 percent to 24886.81, the S&P 500 jumped 8.85 points or 0.32 percent to
2,733.29 and the Nasdaq was up by 47.50 points or 0.64% to 7,425.96.
Crude oil futures settled lower
for second straight day on Wednesday on the back of unexpected jump in weekly US
crude supplies. According to data from the Energy Information Administration
(EIA), inventories of US crude rose by 5.778 million barrels for the week ended
May 18, confounding expectations for a draw of 1.567 million barrels. Besides,
traders also remained cautions with report that the OPEC may decide to boost
output to make up for a Venezuelan production shortfall and potential lost
supply from Iran. However, Brent crude future managed to end with modest gains
for second straight session. Benchmark crude oil futures for July delivery
slipped 36 cents or 0.50 percent to settle at $71.84 a barrel on the New York
Mercantile Exchange. July Brent crude was up by 23 cents or 0.30 percent to
settle at $79.80 a barrel on London's Intercontinental Exchange.
Indian
rupee depreciated to near seventeen-month low against dollar on Wednesday,
following continued outflows by foreign investors from the local equity and
bond markets amid surging crude oil prices. Traders failed to get relief with
the private report that an open data ecosystem will impact India's GDP by $22
billion, or the equivalent of two times the amount raised through the sale of
4G spectrum in 2017. The report claims that an open data ecosystem has the
power to double farmers' income by 2022, provide Universal Health coverage and
provide microloans to three million plus micro, small and medium enterprises
among other benefits. On the global front, dollar climbed against most of its
rivals on Wednesday, but lost ground against the yen as geopolitical worries
spurred buying in Japan's haven currency. Finally, the rupee ended at 68.41, 37
paise weaker from its previous close of 68.04 on Tuesday.
The FIIs as per Wednesday's data were
net sellers in equity and debt segments both. In equity segment, the gross buying
was of Rs 3310.96 crore against gross selling of Rs 4738.53 crore, while in the
debt segment, the gross purchase was of Rs 42.15 crore with gross sales of Rs 1214.06
crore. Besides, in the hybrid segment, the gross buying was of Rs 1.18 crore against
gross selling of Rs 2.48 crore.
The US markets ended higher on
Wednesday, following the release of the minutes of the latest Federal Reserve
meeting. Asian markets are trading mostly in red on Thursday as investors
fretted about new setbacks in US-China trade talks, however losses remained
capped as negative sentiment was tempered by US Federal Reserve meeting minutes
suggesting it would not raise the tempo at which it increases interest rates. Indian
equity benchmarks edged lower on Wednesday amid continued selling by foreign
funds as oil stayed at multi-year peaks and the rupee traded near 17-month low
against the dollar. Today, the markets are likely to start slightly in green
with dovish Fed minutes as well as a drop in crude oil prices likely to offer
some support after recent heavy losses. Traders will get some support with
report that India's direct tax collections for the last financial year crossed
the Rs 10 lakh crore mark, registering an increase of 18 per cent over the
previous fiscal. Some support will also come with report that India has moved
one notch higher, to the 44th place in terms of competitiveness, in the annual
rankings compiled by International Institute for Management Development (IMD)
which placed the US in the top slot. The US became the most competitive economy
globally driven by its strength in economic performance and infrastructure,
followed by Hong Kong and Singapore in the second and third place,
respectively. Traders will also react to union minister Ravi Shankar Prasad's
statement that the government is working on a long-term solution to fuel
prices. Meanwhile, the government has cleared amendments to the Insolvency and
Bankruptcy Code (IBC), incorporating changes suggested by a
government-appointed panel.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,430.35
|
10,387.58
|
10,503.33
|
BSE Sensex
|
34,344.91
|
34,209.04
|
34,574.62
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
SBI
|
712.02
|
263.20
|
255.08
|
270.53
|
Vedanta
|
182.26
|
252.65
|
247.40
|
260.70
|
Tata Motors
|
176.98
|
309.45
|
304.15
|
316.00
|
Tata Steel
|
171.48
|
540.05
|
526.30
|
564.90
|
Hindustan Petroleum
|
164.65
|
287.00
|
276.82
|
303.92
|
Tata Steel will raise funds worth Rs 16,500 crore through debt instruments to fund Rs 32,500 crore acquisition of Bhushan Steel.
Cipla has reported net profit of Rs 178.61 crore for Q4FY18 as compared to net loss of Rs 61.79 crore for Q4FY17.
Yes Bank has recovered an amount of Rs 184 crore, against an original claim filed for Rs 325 crore, pursuant to the sale of Bhushan Steel to Tata Steel.
L&T's construction arm -- L&T Construction's Transportation Infrastructure business has bagged an order worth Rs 1,425 crore.