Indian equity bourses managed to
close in green terrain on Wednesday after a volatile session. The start of the day was negative, amid
reports that the bilateral relationship between India and the US, which has
continuously experienced an upward trajectory for the last two decades, faces
the risk of a downward spiral unless urgent steps are taken by both the
countries to resolve their trade differences. Adding more worries, a private
report stated that despite the policymakers' efforts to revive the sagging
growth momentum, the economy is set to print in a 5.7 percent uptick in the
June quarter and is likely to bottom out from there. It noted that India
presents a picture of short-term despair and medium term hope. In the last leg
of trade, indices staged recovery to end higher, aided by reports that India
received the foreign direct investments (FDI) inflow of $64.37 billion during
the financial year 2018-19 (FY19). As per the Annual Report 2018-19 of the
Department for Promotion of Industry and Internal Trade (DPIIT), FDI worth $286
billion were received in the country in past five years. The street also got
comfort as Minister of Petroleum and Natural Gas & Steel Dharmendra Pradhan
launched Atal Community Innovation Centre (ACIC) in New Delhi, to encourage the
spirit of innovation at the community level. This initiative aims to encourage
the spirit of innovation through solution-driven design thinking to serve
society. Finally, the BSE Sensex gained 83.88 points or 0.22% to 37,481.12,
while the CNX Nifty was up by 32.60 points or 0.29% to 11,118.00.
The US markets ended sharply
lower with cut of over one percent on Wednesday after the Fed reduced interest
rates by quarter point, as expected, but Fed Chairman Jerome Powell signaled
the rate cut is not the start of a trend. The Fed said it decided to lower the
target range for the federal funds rate to 2 to 2-1/4 percent, down 25 basis
points from the previous range of 2-1/4 to 2-1/2 percent. This marks the first
rate cut by the Fed since December of 2008. The central bank cited implications
of global developments for the economic outlook as well as muted inflation
pressures as reasons for the rate cut. Powell suggested that rate cut should
not be seen as the beginning of a lengthy cutting cycle, adding, that is not
what we are seeing now, that is not our perspective now. Besides, a report
released by payroll processor ADP showed private sector employment in the US
increased by slightly more than anticipated in the month of July. ADP said
private sector employment climbed by 156,000 jobs in July after rising by an
upwardly revised 112,000 jobs in June. The report said employment in the
service-providing sector jumped by 146,000 jobs, while employment in the
goods-producing sector inched up by 9,000 jobs. Meanwhile, MNI Indicators
released a report unexpectedly showing a continued contraction in Chicago-area
business activity in the month of July. The report said the Chicago business
barometer tumbled to 44.4 in July from 49.7 in June, with a reading below 50
indicating a contraction in regional business activity. Dow Jones Industrial
Average plunged 333.75 points or 1.23 percent to 26864.27, Nasdaq dropped 98.19
points or 1.19 percent to 8175.42 and S&P 500 was down by 32.80 points or
1.09 percent to 2980.38.
Crude oil futures ended higher on
Wednesday as government data showed that domestic crude inventories dropped for
a seventh week in a row, the longest stretch of declines in a year and a half.
The Energy Information Administration (EIA) reported that US crude supplies
declined by 8.5 million barrels for the week ended July 26. Analysts polled by
S&P Global Platts, on average, expected a decline of 3.9 million barrels,
while the American Petroleum Institute on Tuesday reported a 6 million-barrel
drop. Besides, oil prices also climbed in the wake of the Federal Reserve's
decision to cut its key interest rate by a quarter percentage point. Benchmark
crude oil futures for September gained 53 cents or 0.9 percent to settle at
$58.58 a barrel on the New York Mercantile Exchange. October Brent surged 42
cents or 0.7 percent to settle at $65.05 a barrel on London's Intercontinental
Exchange.
Indian
rupee ended stronger against dollar on Wednesday due to increased selling of
the American currency by exporters and banks. Sentiments remained positive with
the government data showing that India received the highest-ever FDI inflow of
$64.37 billion during the fiscal ended March 2019. According to the Annual
Report 2018-19 of the Department for Promotion of Industry and Internal Trade
(DPIIT), foreign direct investments (FDI) worth $286 billion were received in
the country in past five years. However, upside remained capped with a private
report that despite the policymakers' efforts to revive the sagging growth
momentum, the economy is set to print in a 5.7 percent uptick in the June
quarter and is likely to bottom out from there. It noted that India presents a
picture of short-term despair and medium term hope. On the global front, dollar
held firm, as a wait-and-see mood prevailed, with traders looking ahead to the
outcome of the Federal Reserve's meeting later in the day when policymakers are
expected to cut interest rates for the first time since 2008. Finally, the
rupee ended at 68.79, 6 paise stronger from its previous close of 68.85 on
Tuesday.
The FIIs as per Wednesday'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 4544.50 crore against gross selling
of Rs 5219.86 crore while in the debt segment, the gross purchase was of Rs
2380.11 crore with gross sales of Rs 2125.90 crore. Besides, in the hybrid
segment, the gross buying was of Rs 3.38 crore against gross selling of Rs 4.64
crore.
The US markets declined on
Wednesday after the Federal Reserve signaled caution on future interest-rate
cuts shortly after the central bank lowered rates for the first time in a
decade. Asian markets are trading mixed on Thursday as a private survey showed
Chinese factory activity contracted in July. Indian markets snapped two-day
losing streak and ended in green on Wednesday mainly on the back of late buying
by market participants. Today, the start of the August month is likely to be
negative amid mixed cues from Asian peers and lackluster domestic data. There
will be concerned with the government data showing that growth of eight core
industries dropped to 0.2 per cent in June mainly due to a contraction in
oil-related sectors as well as in cement production. The eight core sector
industries - coal, crude oil, natural gas, refinery products, fertiliser,
steel, cement and electricity - had expanded by 7.8 per cent in June last year.
Also, there will be some cautiousness with the Controller General of Accounts
(CGA) data showing that the government's fiscal deficit touched Rs 4.32
trillion for the June quarter, which is 61.4 per cent of the budget estimate
for 2019-20 fiscal. In absolute terms, the fiscal deficit, the gap between
expenditure and revenue, was Rs 4.32 trillion at June-end. However, some
support may come later in the day with report that India's monsoon rains in the
week ending on July 31 were above average for the second time since the start
of the season on June 1, helping farmers accelerate the planting of summer-sown
crops and easing concerns of drought. Traders may also take note of Commerce
and Industry Minister Piyush Goyal's statement that India's exports will have
to contribute $1 trillion as the country aims to become a $5 trillion economy
in the next few years. Meanwhile, the government has decided to hike the
subsidy on sulphur fertiliser to Rs 3.56 per kg and keep the support unchanged
for other non-urea nutrients for promoting balanced use of farm supplements.
The auto sector stocks will also be in action, reacting to their monthly sales
numbers. Besides, Ind-Ra said that automobile manufacturers in the country
slashed production by 11 percent in April-June period this fiscal over the
year-ago period amid the industry facing the worst slowdown with sales
declining month after month. There will be lots of earnings reaction based on
the performance of the companies, to keep markets buzzing.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,118.00
|
11,029.83
|
11,175.73
|
BSE Sensex
|
37,481.12
|
37,214.13
|
37,662.24
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in
Lacs)
|
Yes Bank
|
1,330.55
|
91.20
|
86.52
|
94.12
|
Axis Bank
|
558.37
|
674.10
|
656.30
|
693.40
|
Tata Motors
|
270.25
|
135.60
|
133.27
|
137.17
|
SBI
|
227.41
|
332.20
|
326.33
|
335.63
|
ICICI Bank
|
223.30
|
424.60
|
420.47
|
429.47
|
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