Bears dominated Dalal Street on
Wednesday's session, with Sensex & Nifty closing lower by over 1.25% each.
The markets made a negative start of the day, as the Asian Development Bank
(ADB) lowered India's gross domestic product (GDP) growth forecast to 6.5
percent for the current fiscal (FY20), weighed down by the GDP growth slipping
to a six-year low in the April-June quarter of 2019-20. Adding more worries,
rating agency ICRA said though domestic apparel exports are expected to remain
in the positive zone during rest of the year, there are multiple threats
looming which could slow down the pace and make it challenging for exporters.
Key indices remained weak for the whole day, amid reports that India's fiscal
deficit gap is set to increase by at least 70 basis points to 4 percent of the
gross domestic product (GDP) for 2019-20 after Finance Minister Nirmala
Sitharaman announced a cut in corporate tax rates on September 20. Market
participants overlooked RBI Governor Shaktikanta Das' statement that the
government's recent move to slash corporate tax rate made India a very
attractive destination for foreign investment. He said India's corporate tax
now becomes very competitive compared to other emerging market economies in
ASEAN and other parts of Asia. Finally, the BSE Sensex slipped 503.62 points or
1.29% to 38,593.52, while the CNX Nifty was down by 148.00 points or 1.28% to
11,440.20.
The US markets ended higher on
Wednesday after President Donald Trump said that a US-China trade deal could
happen sooner than expected. Besides, markets also moved to the upside in
reaction to the release of the transcript of President Donald Trump's
controversial call with Ukrainian President Volodymyr Zelensky. The transcript
confirms Trump discussed a possible investigation of former Vice President and
Democratic frontrunner Joe Biden in the call with Zelensky, although he does
not directly link the issue to US aid. The release of the transcript comes amid
claims Trump threatened to withhold military aid from Ukraine unless Zelensky
conducted an investigation of Biden and his son Hunter. On the economic front,
reflecting an extension of the volatility seen in recent months, the Commerce
Department released a report showing US new home sales rebounded strongly in
the month of August following a sharp pullback in the previous month. The
Commerce Department said new home sales surged up by 7.1 percent to an annual
rate of 713,000 in August after plunging by 8.6 percent to a revised rate of
666,000 in July. Street had expected new home sales to jump by 3.9 percent to a
rate of 660,000 from the 635,000 originally reported for the previous month.
The bigger than expected rebound came as new home sales in the West bounced
back, spiking by 16.5 percent to a rate of 191,000 in August after plummeting
by 15.9 percent to 164,000 in July. Dow Jones Industrial Average surged 162.94
points or 0.61 percent to 26970.71, Nasdaq gained 83.76 points or 1.05 percent
to 8077.38 and S&P 500 was up by 18.27 points or 0.62 percent to 2984.87.
Extending their previous
session's losses, crude oil futures ended lower on Wednesday as US government
data revealed a second weekly climb in domestic crude inventories. The Energy
Information Administration (EIA) reported that US crude supplies rose for a
second week in a row, by 2.4 million barrels for the week ended September 20.
The American Petroleum Institute on Tuesday reported a climb of 1.4 million
barrels. The EIA data showed that gasoline inventories rose by 500,000 barrels,
while distillate stockpiles declined by 3 million barrels last week. Besides,
oil prices also declined on reports that Saudi Arabia had restored most of
crude production capacity, recovering from attacks on its facilities earlier
this month. Benchmark crude oil futures for October declined 80 cents or 1.4
percent to settle at $56.49 a barrel on the New York Mercantile Exchange.
November Brent dropped 71 cents or 1.1 percent to settle at $62.39 a barrel on
London's Intercontinental Exchange.
Indian
rupee ended marginally lower against US dollar on Wednesday, due to fresh
demand for the American currency from banks and importers. Traders remained
cautious as the Asian Development Bank (ADB) lowered India's gross domestic
product (GDP) growth forecast to 6.5 percent for the current fiscal (FY20),
weighed down by the GDP growth slipping to a six-year low in the April-June
quarter of 2019-20. Heavy losses in the domestic equity market along with
dollar's strength against major global currencies overseas also weighed on the
domestic unit. On the global front,
dollar recovered on Wednesday after falling when a formal impeachment inquiry
began against US President Donald Trump, while the latest Sino-US trade row
hurt currencies correlated with global growth. Finally, the rupee ended at 71.04,
3 paise weaker from its previous close of 71.01 on Tuesday.
The
FIIs as per Wednesday's data were net sellers in both equity and debt segments.
In equity segment, the gross buying was of Rs 5338.88 crore against gross
selling of Rs 6085.93 crore, while in the debt segment, the gross purchase was
of Rs 877.56 crore with gross sales of Rs 1066.43 crore. Besides, in the hybrid
segment, the gross buying was of Rs 87.10 crore against gross selling of Rs
81.81 crore.
The US markets ended higher on
Wednesday on robust US housing data and the notion a strong economy would
overcome any investor skittishness over a possible impeachment of President
Donald Trump. Asian markets are trading mostly in green on Thursday amid hopes
that the US and China may soon end their year-long trade war boosted demand for
riskier assets. Indian markets declined on Wednesday tracking heavy losses in
banking and auto stocks as investors turned jittery over geopolitical
uncertainties and global slowdown concerns. Today, the start of F&O expiry
session is likely to be in green tracking positive global cues coupled with
sharp fall in crude oil prices. However, the expiry day is very much likely to
bring in volatility later in the day. Traders will be taking some encouragement
with report that easing the regulatory framework for foreign portfolio
investors, SEBI has simplified KYC requirements for them and permitted them to
carry out the off-market transfer of securities. Besides, the regulator has
broad-based the classification for foreign portfolio investors (FPIs) and
simplified their registration process. Some support will also come with
Employees' State Insurance Corporation's (ESIC) latest payroll data showing
that around 14.24 lakh jobs were created in July, higher than 12.49 lakh in the
previous month. Though, some concern may come with report that the United
Nations Conference on Trade and Development (UNCTAD) has forecast India's
growth to moderate to 6% in 2019 from 7.4% in 2018 due to lower-than-targeted
tax collections and limited public spending. Traders may take note of NITI
Aayog CEO Amitabh Kant's statement that the government is determined to take
India back to a high trajectory growth rate of 8-9 percent and the real
challenge before the country is to sustain that growth. Meanwhile, SEBI has
come out with new norms that make it mandatory for companies to provide details
on delayed loan repayments and possible defaults to credit rating agencies amid
concerns over banks citing client confidentiality to resist sharing of such
information by their borrowers. Public sector banking stocks will be in focus
with rating agency ICRA's report that profitability and return on assets (RoA)
of public sector banks (PSBs) are likely to remain low during the current
financial year on the back of continued provisioning on existing and fresh bad
loans. There will be some buzz in the telecom stocks with Trai's report that
gross revenue of telecom operators slipped 7.13% in 2018, while licence fee and
spectrum charges that the government collects from them fell 10.29% and 17.7%,
respectively, during the year.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE
Nifty
|
11,440.20
|
11,382.55
|
11,531.40
|
BSE
Sensex
|
38,593.52
|
38,373.93
|
38,950.16
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,524.31
|
53.70
|
52.25
|
56.00
|
SBIN
|
730.63
|
280.25
|
273.47
|
292.27
|
Tata Motors
|
475.68
|
123.05
|
119.73
|
128.13
|
Zee Entertainment
Enterprises
|
399.79
|
273.45
|
263.63
|
288.63
|
BPCL
|
331.59
|
465.20
|
451.30
|
476.25
|
SBI has launched its digital banking app YONO in the UK, marking its global launch.
Maruti Suzuki India has decided to reduce the price of select models by Rs 5,000.
ZEE5, a video on demand website run by Zee Entertainment Enterprises, has entered into partnership with Kaltura for the deployment of the Kaltura TV Platform Player.
QNB Group has selected the TCS BaNCS Global Securities Platform to support the digital transformation of its capital markets operations.