Indian equity benchmarks
witnessed bloodbath on Friday with frontline gauges ending below their crucial
35,800 (Sensex) and 10,800 (Nifty) levels on global growth concern. Markets
started the session on cautious note, as traders remained pessimistic with the
central bank's statement that the total external commercial borrowings (ECB)
will now be rule-based and will be capped at 6.5% of the gross domestic
product. The limit now works out to be about $160 billion for the current
fiscal year, against the actual outstanding of $126.29 billion as on September
30. The central bank already has a rule-based exposure for foreign investors'
exposure in bonds. Foreigners are allowed to invest up to 6% of the outstanding
debt. Sentiments on the street weakened further with Parliamentary Committee
expressing concern over the huge losses suffered by some Central Public Sector
Undertakings (CPSUs) and the low rate of return on assets and pressed the
urgent need for optimum utilisation of their assets to generate better
earnings. Markets extended southward journey to end near intraday lows, as
traders shrugged off report that the Lok Sabha passed the Consumer Protection
Bill, and the government introduced a Bill to amend the Companies Act to
further improve the ease of doing business and ensure better compliance levels.
The Consumer Protection Bill seeks to strengthen the rights of consumers and
provide a mechanism for redressing complaints regarding defects in goods and deficiency
in services. Meanwhile, International Institute of Sustainable Development
(IISD) stated that India's total energy subsidies amounted to Rs 1,51,480 crore
in financial year 2017, a 36 per cent decrease since FY14. India's fossil-fuel
subsidies fell sharply by nearly 70 per cent, from Rs 1,73,330 crore in FY14 to
Rs 52,980 crore in FY17. Finally, the BSE Sensex plunged by 689.60 points or
1.89% to 35,742.07, while the CNX Nifty was down by 197.70 points or 1.81% to
10754.00.
The US markets end lower on
Friday, sending the Dow Jones Industrial Average to its worst week since the
financial crisis in 2008, down nearly 7 percent. The Nasdaq Composite Index
closed in a bear market and the S&P 500 was on the brink of one itself,
down nearly 18 percent from its record earlier this year. Sentiments were
down-beat as traders kept an eye on developments on Capitol Hill, with a
shutdown of several key government agencies just hours away. Ahead of a
midnight deadline, lawmakers appear to be at an impasse over funding for
President Donald Trump's controversial wall on the border with Mexico. The
currently Republican-controlled House voted 217 to 185 in favor of a short-term
spending bill, although the bill includes more than $5 billion for the
construction of the wall opposed by Democrats. House Republicans took up the
bill, which also provides $7.8 billion for disaster relief, after Trump said he
would not sign a stopgap spending approved the Senate that did not include wall
funding. On the economic front, reflecting downward revisions to consumer
spending and exports, the Commerce Department released a report showing
slightly slower than previously estimated US economic growth in the third
quarter. The report said real gross domestic product surged up by 3.4 percent
in the third quarter compared to the previously estimated 3.5 percent jump. The
pace of GDP growth had been expected to be unrevised. The increase in consumer
spending, which accounts for about 70 percent of the economy, was downwardly
revised slightly to 3.5 percent from 3.6 percent. Dow Jones Industrial Average
plunged 414.23 points or 1.81 percent to 22445.37, Nasdaq dropped 195.41 points
or 2.99 percent to 6333.00 and S&P 500 was down by 50.80 points or 2.06
percent to 2416.62.
Crude oil futures ended lower on
Friday, down more than 11% for the week, as a rise in active US oil rigs
exacerbated concerns tied to growing global crude production and a slowdown in
energy demand. Meanwhile, the number of active US rigs drilling for oil, a key
metric of activity in the sector that offers a hint on future output, rose by 10
to 883 this week. That was the biggest weekly rise since the week ended
November 9 and it followed two straight weeks of declines. A slowdown in global
growth could lead to weaker energy demand and that, along with continued growth
in US crude production, feeds worries about a worldwide glut of supplies.
Benchmark crude oil futures for February declined 29 cents or 0.6 percent to
settle $45.59 a barrel on the New York Mercantile Exchange. February Brent
crude lost 53 cents or 1 percent to settle at $53.82 a barrel on London's
Intercontinental Exchange.
Snapping
its four-day winning streak, Indian rupee ended considerably weaker against
dollar on Friday as demand for the American unit from importers and banks
picked up. Sentiments turned pessimistic with the central bank's statement that
the total external commercial borrowings (ECB) will now be rule-based and will
be capped at 6.5% of the gross domestic product. The limit now works out to be
about $160 billion for the current fiscal year, against the actual outstanding
of $126.29 billion as on September 30. The central bank already has a
rule-based exposure for foreign investors' exposure in bonds. Foreigners are
allowed to invest up to 6% of the outstanding debt. Besides, a sharp sell-off
in the domestic stock market put pressure on the rupee. On the global front,
dollar hovered near a one-month low against its peers on Friday, weighed down
by a subdued outlook towards US interest rates and the economy, while risk
aversion in the broader markets boosted the yen. Finally, the rupee ended at
70.18, 48 paise weaker from its previous close of 69.70 on Thursday.
The FIIs as per Friday'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 4017.59 crore against gross
selling of Rs 4647.55 crore, while in the debt segment, the gross purchase was
of Rs 2673.06 crore with gross sales of Rs 1913.83 crore. Besides, in the
hybrid segment, the gross selling was of Rs 0.44 crore against no buying.
Extending their previous session
losses, the US markets settled sharply lower on Friday as investors remained
gripped by fears of a partial government shutdown, rising interest rates and
flagging global growth and uncertainty surrounding US-China trade relations.
Asian markets have made a weak start and are trading in red in early deals on
Monday, as investors fretted that political instability in the United States
was leaving the country rudderless at a time when the global economy was
showing signs of faltering. Indian Equity markets ended in red with a cut of
around two percent on Friday tracking a selloff in global markets. Domestic
shares tracked broader Asian markets as the possibility of a US government
shutdown and further rate hikes by the Federal Reserve next year made investors
jittery. Today, the start is likely to be cautious on sluggish global cues.
Traders may remain concern on report that Finance Commission Chairman N.K.
Singh has sounded a note of caution against fiscal slippage, saying it would
adversely impact the country's macroeconomic stability as well as investment
climate. He expressed apprehension that some states are not according priority
to fiscal discipline, which was not the case earlier. Meanwhile, the Reserve Bank of India's (RBI) data has
showed the country's foreign exchange reserves declined by $613.9 million to
$393.12 billion in the week to December 14, due to fall in foreign currency
assets. In the reporting week, foreign currency assets, a major component of
the overall reserves, dropped by $631.6 million to $367.865 billion. However,
traders will be getting some encouragement in later part of trade with Finance
minister Arun Jaitley expressing confidence of meeting the fiscal deficit
target of 3.3 % of GDP for the current financial year (FY19) despite revenue
loss on account of reduction in GST rates. The GST Council in its 31st meeting
has decided to cut rates on 23 commonly used goods and services. There will be
also some support with Ficci's President Sandip Somany stating that a gradual
reduction in GST rates would further stabilise and strengthen the tax regime.
Traders may take note of a report, in a bid to promote cleaner fuel and cut
down on the huge crude oil import bills, Union Minister Nitin Gadkari has said
that India endeavours to take the Rs 110 billion methanol economy to about Rs 2
trillion in five years. Sugar sector stocks may see some action on report that
the government is considering an additional soft loan of Rs 7,400 crore to
sugar mills for creating ethanol capacity under a recently launched scheme.
There will be some buzz in the solar stocks as the GST council issued clarity
on the confusion over the rates for solar power projects. It clarified that 70%
of the gross value of project shall be deemed as the value of supply of said
goods attracting 5% rate. Aviation stocks will keep buzzing on report that
India's domestic air passenger traffic grew by 11.03 per cent to 11.64 million
in November 2018. Passenger traffic during the January-November 2018 period
grew by 19.21 per cent. Also, the
logistics stocks may keep buzzing on report that in a bid to cut India's
massive logistics costs, the commerce department is arming itself with a
national digital tool to map logistics bottlenecks, freight movements and even
toll congestions, along with a logistics portal where businesses can procure
and sell services.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,754.00
|
10,673.88
|
10,898.88
|
BSE Sensex
|
35,742.07
|
35,463.38
|
36,252.13
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
408.64
|
182.95
|
179.72
|
187.32
|
IOC
|
346.81
|
139.75
|
138.30
|
142.00
|
Tata Motors
|
237.42
|
176.25
|
174.10
|
179.45
|
ONGC
|
177.68
|
148.50
|
147.63
|
149.33
|
NTPC
|
157.97
|
150.55
|
148.73
|
151.88
|
HCL Technologies has partnered with Cloudify to bring Network Function Virtualization orchestrated network slicing to telecoms providers.
Tata Motors has joined hands with self-drive rental car firm Zoomcar to offer the electric version of its compact sedan Tigor in Pune city as part of the shared mobility plans.
Power Grid Corporation has got shareholders' approval to raise shareholding limit of FPI to 35 percent from 30 percent at present.
Vedanta has sought the permission from the TNPCB for reopening of its copper smelter plant, known as Sterlite Copper in Tuticorin, following a favourable decision from the NGT.