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NSE Intra-day chart (23 December 2019)
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Market Commentary 24 December 2019
Benchmarks likely to get slightly negative start

 

Indian equity bourses paused record closing rally on Monday, with Sensex & Nifty closing on lower note. After a weak beginning of the day, indices remained highly volatile, impacted with Assocham president Niranjan Hiranandani's statement that the economy is facing a liquidity problem and demand recession, and it requires measures to lift consumption, including reduction in goods and services tax and personal income tax and improved credit flow, to revive. Adding more worries, International Monetary Fund chief economist Gita Gopinath said that while it was anticipated that India's growth will slow down, the current numbers come as a shocker with a sharp decline in both investment and consumption. In the second half of the trading session, losses got intensive, amid a private report stating that after taking a big hit from the falling rate of economic growth in 2019, the job market may remain muted in the New Year as well in terms of workforce expansion and salary hikes as more and more companies are expected to prefer up-skilling of existing staff rather than hiring new ones. However, key indices staged some recovery at the end to come off day's low points, with reports that India's forex reserves continued on the northward trajectory, rising to a new record of $454.492 billion on the back of a $1.07 billion accretion for the week ended December 13. Finally, the BSE Sensex lost 38.88 points or 0.09% to 41,642.66, while the CNX Nifty was down by 9.05 points or 0.07% to 12,262.75.

 

The US markets ended higher on Monday, extending the upward trend seen over the past session, as investors focused on a report that China will cut import tariffs for frozen pork, pharmaceuticals and some high-tech components. China said tentative import tax rates will be implemented for 859 types of products beginning January 1 in order to optimize the trade structure and promote high-quality economic development. The tentative import tax rates, which were imposed on 706 types of products last year, are lower than the most-favored-nation tariffs. The move by Beijing comes following the recent reports that the US and China have reached an agreement on a phase one trade deal. Besides, some support came in on report released by the Commerce Department showed a significant increase in US new home sales in the month of November. The Commerce Department said new home sales jumped by 1.3 percent to an annual rate of 719,000 after plunging by 2.7 percent to a revised rate of 710,000 in October. The rebound in new home sales came as sales in the Northeast soared by 52.4 percent to a rate of 32,000 and sales in the West surged up by 7.5 percent to a rate of 216,000. However, reflecting a steep drop in orders for transportation equipment, the Commerce Department released a report showing an unexpected slump in new orders for US manufactured durable goods in the month of November. The report said durable goods orders plunged by 2.0 percent in November after edging up by a downwardly revised 0.2 percent in October. The sharp decline came as a surprise to participants, who had expected durable goods orders to jump by 1.5 percent compared to the 0.5 percent increase that had been reported for the previous month.

 

Crude oil futures ended marginally higher on Monday as traders refrained from making big moves ahead of upcoming Christmas and New Year holidays. The possibility of Organization of the Petroleum Exporting Countries (OPEC) and allies considering easing output cuts next year weighed on oil prices. An increase in US drilling activity and a deal between Kuwait and Saudi Arabia to renew crude output along their border pressured prices amid thin trading conditions. Kuwait and Saudi Arabia are likely to sign an agreement to resume oil output in the neutral zone on Tuesday. Benchmark crude oil futures for February gained 8 cents or 0.1 percent to settle at $60.52 a barrel on the New York Mercantile Exchange. February Brent added 25 cents or 0.4 percent to settle at $66.39 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended marginally lower against US dollar on Monday, due to fresh demand for the American currency from banks and importers. Traders remained cautious with Assocham president Niranjan Hiranandani's statement that the economy is facing a liquidity problem and demand recession, and it requires measures to lift consumption, including reduction in goods and services tax and personal income tax and improved credit flow, to revive. Some anxiety also came with International Monetary Fund (IMF) chief economist Gita Gopinath's statement that while it was anticipated that India's growth will slow down, the current numbers come as a shocker with a sharp decline in both investment and consumption. Besides, lackluster trade in local equity markets weighed on the rupee. On the global front, dollar stood near two-week highs on Monday after the release of decent US economic data late last week, while sterling's brief recovery hit the buffers. Finally, the rupee ended at 71.18, 6 paise weaker from its previous close of 71.12 on Friday.

 

The FIIs as per Monday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 9632.52 crore against gross selling of Rs 9160.20 crore, while in the debt segment, the gross purchase was of Rs 1206.77 crore with gross sales of Rs 4407.21 crore. Besides, in the hybrid segment, the gross buying was of Rs 40.15 crore against gross selling of Rs 41.41 crore.

 

The US markets ended higher on Monday on the heels of report that China's Finance Ministry has announced plans to lower tariffs on a range of products, including frozen pork, pharmaceuticals and some high-tech components. Asian markets are trading mixed on Tuesday despite overnight gains on Wall Street. Indian markets ended a range-bound session slightly lower on Monday dragged by energy and FMCG stocks. Today, the markets are likely to make flat-to-negative start as investors are likely to avoid making big bets ahead of the Christmas holiday and the expiration of near-month derivative contracts. There will be some cautiousness on report that the International Monetary Fund (IMF) has retained India's economic growth forecast at 6.1 per cent for FY20, but said risks to the outlook are tilted to downward side. It added that India needs to consolidate its finances by curbing expenditure and boosting taxes to trim its debt. However, some support may come with report that to protect consumers interest, the Reserve Bank of India (RBI) has said that on a peer-to-peer lending (P2P) platform the permissible exposure of a lender to all borrowers should not exceed Rs 50 lakh at any given point of time. Traders may take note of Industry chamber PHDCCI's statement that the definition of micro, small and medium enterprises (MSMEs) on the basis of turnover will help in promoting the ease of doing business as the process of identification and dealings with such entities will become simpler and faster. Besides, the RBI has purchased Rs 10,000 crore worth of long-term government securities and sold Rs 6,825 crore of four short-term securities through the special open market operations (OMOs). There will be some buzz in the metal socks with Union minister Dharmendra Pradhan's statement that the government will soon come out with a white paper on steel industry that will focus on ways to reduce the tax-related expenditure in the sector and make it competitive. There will be some reaction in power stocks with report that the Power Ministry has scrapped the auction to procure 2,500 MW electricity for medium term (three years) under a scheme to provide relief to thermal power plants plagued by short coal supplies.

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

12,262.75

12,221.62

12,295.52

BSE Sensex

41,642.66

41,510.97

41,737.98

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

2,767.77

49.65

48.13

51.73

SBI

301.50

332.40

328.88

337.38

Tata Motors

271.92

176.05

173.80

178.65

ZEEL

207.72

294.80

286.80

299.60

ITC

190.82

238.90

237.43

241.58

 

  • HCL Technologies has entered into partnership with Critical Manufacturing to provide pre-and post-sales consulting, development, and implementation support. 
  • Hero MotoCorp has organized its unique adventure riding activity XTracks -Live the Thrill in Pune. 
  • HDFC Bank has set up a blood storage unit in Udaipur in the state of Rajasthan. 
  • Power Grid has acquired Meerut-Simbhavali Transmission as a special purpose vehicle to establish transmission system in Uttar Pradesh.
News Analysis