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NSE Intra-day chart (29 October 2019)
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Market Commentary 30 October 2019
Markets to get a slightly positive start on Wednesday


Bulls rejuvenate on Dalal Street post Diwali session and markets rallied around one and a half percent on Tuesday. The investors' mood remained up-beat throughout the day and there appeared not even an iota of profit booking, as investors continued hunt for fundamentally strong stocks. Soon after making marginal positive start, markets gained traction as traders took some encouragement with the Reserve Bank's statement that continuing its northward surge, India's forex kitty has swelled by $1.039 billion to a new life-time high of $440.751 billion for the week ended October 18. Some support also came with World Bank group President David Malpass' statement that India must undertake financial reforms in three key areas like sound regulations for non-banking financial companies (NBFCs), allow private sector banks in a big way in the banking sector and deepen capital market to aide growth. Adding optimism, Central Board of Indirect Taxes and Customs (CBIC) favored extending incentives based on parameters like job creation and committed investments across the country. Markets extended gains and settled above their crucial 39,800 (Sensex) and 11,750 (Nifty) levels with a report that Prime Minister Narendra Modi embarked on a two-day visit to Saudi Arabia to help draw investments and bolster bilateral ties, with a dozen agreements expected to be signed in sectors, including energy, Defence procurement and civil aviation. Besides, Union Steel Minister Dharmendra Pradhan said that India will spend about $1.4 trillion on its infrastructure development in the next five years. Meanwhile, urging government to probe the business model of e-commerce majors, the Confederation of All India Traders (CAIT) has said that deep discounts on products by them are causing loss of Goods and Services Tax (GST) revenue to the Centre and state governments. However, traders ignored a private report that declining for the fourth consecutive month, consumer confidence in the month of October nosedived by 3.5% tracking pessimism around jobs, economy, finances, and investment. Finally, the BSE Sensex gained 581.64 points or 1.48% to 39,831.84, while the CNX Nifty was up by 159.70 points or 1.37% to 11,786.85.


The US markets ended choppy trading session slightly in red on Tuesday as traders seemed reluctant to make significant moves ahead of the Federal Reserve's highly anticipated monetary policy announcement on Wednesday. Traders took a wait-and-see approach even though the Fed is widely expected to cut interest rates by another quarter point. Some pessimism came amid report suggesting a phase one trade deal between the US and China may not be signed by a summit in Chile next month. A US administration official noted a failure to sign the deal by the summit just means more time is needed. A mixed reaction to the latest batch of earnings news also contributed to the lackluster performance, with a notable drop by Google parent Alphabet (GOOGL) weighing on the tech-heavy Nasdaq. Alphabet reported third quarter earnings that missed street estimates. On the economic front, the Conference Board released a report showing consumer confidence unexpectedly edged lower in the month of October, although the drop came from an upwardly revised level in the previous month. The Conference Board said its consumer confidence index dipped to 125.9 in October from an upwardly revised 126.3 in September. Street had expected the consumer confidence index to climb to 128.5 in October from the 125.1 originally reported for the previous month. Meanwhile, a separate report released by the National Association of Realtors (NAR) on Tuesday showed another significant increase in pending home sales in the US in the month of September. NAR said its pending home sales surged up by 1.5 percent 108.7 in September after spiking by 1.4 percent to a revised 107.1 August. Street had expected pending home sales to climb by 0.9 percent.


Crude oil futures ended lower for second straight session on Tuesday amid expectation of notable jump in crude inventories and as remarks from a Russian government official suggested that he believed it was too early to discuss deeper production cuts as part of its agreement with the Organization of the Petroleum Exporting Countries. The Energy Information Administration's (EIA) data is due out on Wednesday. Before that, the American Petroleum Institute (API) will release its weekly oil report after oil futures settle. Besides, after last week's steep rise, a bit of profit taking too contributed to oil's decline in Tuesday's session. Also, recent data showing a drop in profits of China's industrial firms weighed on the prices. Benchmark crude oil futures for December declined 27 cents or 0.5 percent to settle at $55.54 a barrel on the New York Mercantile Exchange. However, December Brent gained 2 cents or 0.03 percent to settle at $61.59 a barrel on London's Intercontinental Exchange.


Giving up most of their early gains, Indian rupee ended slightly higher against dollar on Tuesday on account of selling of US dollar by bankers and exporters. Besides, rally in domestic equity markets added support to the local unit. Moreover, easing crude prices and gains in other Asian currencies also supported the rupee. Some support also came with the Reserve Bank's statement that continuing its northward surge, India's forex kitty has swelled by $1.039 billion to a new life-time high of $440.751 billion for the week ended October 18. Besides, in the special Muhurat trading session, foreign institutional investors remained net buyers in the capital markets, putting in Rs 6.61 crore on October 27. On the global front, Sterling fell towards a ten-day low against the dollar as investors waited for Prime Minister Boris Johnson's next attempt to push for a General Election. Finally, the rupee ended at 70.84, 6 paise stronger from its previous close of 70.90 on Friday.


The FIIs as per Tuesday'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 5389.50 crore against gross selling of Rs 5797.43 crore, while in the debt segment, the gross purchase was of Rs 2108.36 crore with gross sales of Rs 673.64 crore. Besides in the hybrid segment, the gross buying was of Rs 3.59 crore against gross selling of Rs 0.59 crore.


The US markets ended lower on Tuesday as investors looked ahead to key Federal Reserve meeting. Asian markets are trading mostly in red on Wednesday as the prospect of a rate cut by the Federal Reserve was countered by worries that Sino-US first-stage trade deal could be delayed. Indian markets rallied on Tuesday with gains of over one percent each, led by the strong buying in auto and metal index. Today, the markets are likely to make a flat-to-positive start amid fall in crude oil prices. Traders will be taking encouragement with report that the Department for Promotion of Industry and Internal Trade (DPIIT) has kickstarted an exercise to relax India's foreign direct investment (FDI) norms. The department held an inter-ministerial meeting to discuss further opening up in sectors, especially where 100% FDI is not allowed on the automatic route. Some support may come with report that the finance ministry and regulators are reviewing the possibility of scrapping the dividend distribution tax (DDT) in a bid to regain investor confidence in the equity markets. It is also considering rationalisation of the long-term capital gains (LTCG) taxation structure by classifying three asset classes against six at present. Traders may take note of report that Prime Minister Narendra Modi called upon global investors to benefit from India's vibrant start-up ecosystem, which stands as the third-largest in the world, adding that he firmly believes that any investment in India's innovation sector would yield huge returns. However, weak global cues may weight on market sentiments. Telecom stocks will in focus amid report that the Centre has set up a Committee of Secretaries under the cabinet secretary to suggest measures to alleviate financial stress in the telecom sector. The committee will look at ways of creating a favourable investment environment for the sector. There will be some reaction in oil & gas stocks with Prime Minister Narendra Modi's statement that India will invest $100 billion in oil and gas infrastructure to meet energy needs of an economy that is being targeted to nearly double in five years, as he sought investment from oil kingpin Saudi Arabia and other nations to boost supplies. There will be some buzz in the metal stocks with report that India's steel production growth rate slowed down to a 5-month low of 1.6% in September this year due to the slump in key sectors like automobiles, consumer durables and a decline in spending on infrastructure. There will be lots of earnings reaction based on the performance of the companies.


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



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  • M&M's subsidiary -- Mahindra Two Wheelers Europe is planning to acquire 100% ownership of Peugeot Motocycles. 
  • Reliance Industries has received an approval from board of directors for the formation of wholly-owned digital services subsidiary with a capital infusion of Rs 1.08 lakh crore. 
  • NTPC has entered into a Joint Venture & Shareholders Agreement with the Ceylon Electricity Board for incorporation of 50:50 Joint Venture Company at Kerawalapitiya, Sri Lanka. 
  • ICICI Bank has exited the GST Network by selling its entire 10 per cent stake to as many as 13 state governments.
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