Indian equity
benchmarks ended the lackluster day of trade of trade with a cut of around half
a percent on account of selling occurred in last leg of trade. Markets made a
cautious start and traded in very tight range near neutral lines for most part
of the day, as traders remained on sidelines
ahead of August F&O expiry on Thursday. Traders also remained
cautious with a private report that the Indian economy is in for a rough ride,
with rising oil prices set to continue weighing on its already-weakened
currency, widen its deficit, and affect its growth outlook. However, markets
somehow managed to restrict their losses, as market participants took some
support with Care Ratings in its latest report bet on a higher GDP growth
April-June quarter as compared to the last year. Meanwhile, the department of
industrial policy and promotion (DIPP) has effectively ruled out foreign direct
investment (FDI) in inventory-based ecommerce, allaying concerns raised by
those opposed to such a move, even as it agreed with the need for a regulator
to oversee the sector. But it was selling in final hour of trade which played
spoil sports for the Indian markets and dragged frontline gauges below their
crucial 11,700 (Nifty) and 38,800 (Sensex) levels. Sentiments turned
pessimistic with the credit rating agency, India Ratings' latest report stating
that the widening current account deficit (CAD), which is projected to cross
2.6% of GDP this year, coupled with the rupee plunge, is likely to increase
borrowing costs for corporates and bring down the overall volume of fresh forex
loans. Sentiments also remain dampened with Credit rating agency Moody's
Investors Service report that there are risks of India breaching the 3.3%
fiscal deficit target for the current financial year as higher oil prices will
add to short-term fiscal pressures. Anxiety persisted on street after the
Reserve Bank of India in its annual report said that bad loans for the banking
sector are likely to increase in 2018-19 from the current levels of around
11.5%. Finally, the BSE Sensex declined 173.70 points or 0.45% to 38,722.93,
while the CNX Nifty was down by 46.60 points or 0.40% to 11,691.90.
The US markets closed higher on
Wednesday with the S&P 500 and the Nasdaq settling at a record for a fourth
session, while the Dow reached its best closing level in nearly seven months.
The US economy's strength-despite some concern about slack in the housing
market-and solid corporate results also laid the groundwork for continued
market gains. Investors' sentiment was also boosted by the resumption of
US-Canada trade talks. Canada rejoined the talks following President Donald
Trump's announcement of a preliminary trade deal with Mexico on Monday.
Canadian Foreign Affairs Minister Chrystia Freeland said difficult concessions
by Mexico have set the stage for productive conversations in the coming days.
On the economic front, the Commerce Department's report showed that economic
activity in the US grew by slightly more than initially estimated in the second
quarter. The report said real gross domestic product climbed by 4.2% in the
second quarter compared to the previously reported 4.1% increase. The pace of growth
had been expected to be downwardly revised to 4.0%. With the unexpected upward
revision, the GDP growth in the second quarter reflects a significant
acceleration from the 2.2% advance in the first quarter. Meanwhile, a separate
report from the National Association of Realtors (NAR) showed an unexpected
pullback in pending home sales in the month of July. NAR said its pending home
sales index dropped by 0.7% to 106.2 in July after jumping by 1.0$ to an
upwardly revised 107.0 in June. Dow Jones Industrial Average rose 60.55 points
or 0.23 percent to 26124.57, the S&P 500 gained 16.52 points or 0.57
percent to 2914.04 and Nasdaq was up by 79.65 points or 0.99 percent to
8109.69.
Crude oil
futures ended higher on Wednesday after a US government report showed that
domestic crude supplies fell more than expected last week. The Energy
Information Administration (EIA) reported that domestic crude supplies declined
by 2.6 million barrels for the week ended August 24. S&P Global Platts had
forecast a fall of 1 million barrels, while the American Petroleum Institute on
Tuesday reported a modest rise of 38,000 barrels. Besides, Iran oil shipments
are declining at a faster-than-expected pace ahead of US sanctions set to begin
in November. Benchmark crude oil futures for October gained 98 cents or 1.4
percent to settle at $69.51 a barrel on the New York Mercantile Exchange.
October Brent crude surged $1.19 or 1.6 percent at $77.14 a barrel on London's
Intercontinental Exchange.
Indian
rupee slumped to a fresh record low against the US dollar on Wednesday,
following bouts of month-end dollar demand from banks and importers. Investors
remained cautious with a private report that the Indian economy is in for a
rough ride, with rising oil prices set to continue weighing on its
already-weakened currency, widen its deficit, and affect its growth outlook.
Sentiments also remained dampened with Credit rating agency Moody's Investors
Service report that there are risks of India breaching the 3.3% fiscal deficit
target for the current financial year as higher oil prices will add to short-term
fiscal pressures. The rupee's losses were also caused by late hour sell-off in
domestic equity market. On the global front, dollar rose on Wednesday as relief
about a US-Mexico trade deal gave way to concern among investors that the
conflict over trade between the US and China was not about to end soon.
Finally, the rupee ended at 70.57, 47 paise weaker from its previous close of
70.10 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 4202.41 crore against gross selling of Rs 4251.27 crore, while
in the debt segment, the gross purchase was of Rs 141.89 crore with gross sales
of Rs 852.07 crore. Besides, in the hybrid segment, the gross buying was of Rs
1.03 crore against gross selling of Rs 0.37 crore.
The US markets ended higher on
Wednesday as investors grew more hopeful about trade talks between the US,
Mexico and Canada. Asian markets were trading mostly in green on Thursday as
Wall Street hit record highs in the hope that the current North American Free
Trade Agreement (NAFTA) negotiations will lead to a further easing of global
trade tensions. After registering record highs for two consecutive sessions,
the Indian markets lost steam on Wednesday and late hour sell off drag the
markets to intraday low level, as investors preferred to book profits. Today,
the start of the F&O series expiry session is likely to be in green on positive
global cues. Though, the expiry day is very much likely to bring in volatility
later in the day. Traders will be getting some encouragement with the Reserve
Bank of India's (RBI) latest annual report showing that it expects India's
economic growth rate to accelerate to 7.4% in the current financial year (FY19)
on pick up in industrial activity and good monsoon. Traders may take note of
the government's statement that demonetisation of high-value currency notes in
November 2016 achieved the objectives quite substantially even as the RBI reported most of the demonetised currency was
back with the banks. The Central Bank said that 99.3% of demonetised currency,
or Rs 15.31 lakh crore of the Rs 15.41 lakh crore demonetised, has been
returned. However, there may be some cautiousness with a report that foreign
investors have pulled out $280 million from the Indian markets so far this
year, while domestic institutional investors (DIIs) continue to invest more
aggressively and have put in a staggering $10 billion. There will be some
reaction in banking sector stocks with the RBI's report that bad loans for the
banking sector are likely to increase in 2018-19 from the current levels of
around 11.5%.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,691.90
|
11,662.77
|
11,737.12
|
BSE Sensex
|
38,722.93
|
38,605.12
|
38,915.20
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Vedanta
|
314.04
|
227.90
|
224.08
|
234.98
|
Yes Bank
|
305.45
|
366.00
|
359.15
|
375.70
|
SBI
|
243.21
|
309.65
|
306.27
|
312.52
|
ICICI Bank
|
188.68
|
340.65
|
336.75
|
343.60
|
Axis Bank
|
133.29
|
656.55
|
650.65
|
665.05
|
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