Easing microeconomic data dragged
the Indian equity markets lower on Wednesday, with both the larger peers,
Sensex and Nifty, saw a drastic loss of around 1% each. The start of the day
was lackluster, as the government once again missed its Rs 1 lakh crore target
of gathering revenue from Goods and Services Tax (GST) in the month of December
2018. The GST collection declined to Rs 94,726 crore in December, lower than Rs
97,637 crore collected in November. The fall in revenue collection raised
concerns that the government may not be able to contain the fiscal deficit to
3.2% of the Gross Domestic Product (GDP). Domestic sentiments got further hit
after the Indian manufacturing sector slowed down in the month of December,
despite easing cost inflationary pressures. Growth was curtailed by competitive
pressures, labour issues and challenging public policies. As per the survey
report, the Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a
composite single-figure indicator of manufacturing performance - eased to 53.2
in December from 54 in November. The market participants also got cautious with
a private report stating that the Reserve Bank of India's (RBI) estimates of
the gross non-performing asset (GNPA) ratio, in severe stress scenarios, for
the quarter ahead have been inaccurate five out of six times in its financial
stability reports (FSR) since FY16. In the second half of the session, the
equity benchmarks saw steep fall, on the back of weak cues from European and
Asian markets. Adding to the worries, Anil Gupta, vice president of ICRA said
that MSME restructuring scheme will spoil credit culture because earlier the
borrowers were sticking to their repayment schedule but now with this
forbearance definitely any borrower will try to get a restructuring with a
longer repayment schedule. So overall it is not good for the credit culture.
Traders failed to take any sense of relief with reports that the government has
waived late fees for non-filers of summary and final sales returns for the July
2017-September 2018 period by businesses registered under the GST. The market
participants even overlooked a report showing that India remained ahead of
China to retain the tag world's fastest growing large economy withstanding
several ups and downs, spike in oil prices and global trade war like situation
during 2018. Indian economy's roller-coaster ride during the year gone by was
best captured by the Gross Domestic Product (GDP) growth. In the first quarter
of 2018-19 ending June 30, it grew at an impressive 8.2%. Finally, the BSE
Sensex lost 363.05 points or 1.00% to 35,891.52, while the CNX Nifty was down
by 117.60 points or 1.08% to 10,792.50.
The US markets ended marginally
higher on Wednesday as traders picked up stocks at reduced levels following the
steep losses posted last year. Meanwhile, participants were watching a partial
US government shutdown that is nearing its second week as President Trump mets
with top lawmakers to discuss reopening the government by resolving a dispute
over funding for the expansion of the US-Mexico border wall. However, gains
remained capped amid lingering concerns about the outlook for to the global
economy following the release of a report showing a contraction in Chinese manufacturing
activity in the month of December. The report said the Caixin/Markit
manufacturing purchasing managers' index edged down to 49.7 in December from
50.2 in November. The reading below 50 indicated the first contraction in
nineteen months. Besides, trump said that equities should recover when the US
completes trade deals with countries like China. He said our country is doing
better by far than any other country in the world. We are the talk of the
world. Further he asserted we had a
little glitch in the stock market last month, but we are still up about 30%
from the time I got elected. Dow Jones Industrial Average gained 18.78 points
or 0.08 percent to 23346.24, Nasdaq added 30.66 points or 0.46 percent to
6665.94 and S&P 500 was up by 3.18 points or 0.13 percent to 2510.03.
Crude oil futures ended higher on
Wednesday, buoyed by a reported drop in December crude exports from Saudi Arabia,
as the New Year marked the start of output cuts by the Organization of the
Petroleum Exporting Countries (OPEC) and its allies. Observed crude exports
from Saudi Arabia declined to 7.253 million barrels a day in December, from
7.717 million in November. Meanwhile, at a meeting in December, OPEC and some
non-member producers, including Russia, agreed to cut production by 1.2 million
barrels from October 2018 levels, effective as of January 2019, for an initial
period of six months. They plan to review output levels in April. Benchmark
crude oil futures for February surged $1.13 or 2.5 percent to settle $46.54 a
barrel on the New York Mercantile Exchange. March Brent crude rose $1.11 or 2.1
percent to settle at $54.91 a barrel on London's Intercontinental Exchange.
Indian rupee witnessed
depreciation and settled on weaker note amid strengthening of the American
currency and weakness in domestic equities. Rupee sentiments also remained
dampened after the government once again missed its Rs 1 lakh crore target of
gathering revenue from Goods and Services Tax (GST) in the month of December
2018. The GST collection declined to Rs 94,726 crore in December, lower than Rs
97,637 crore collected in November. Sentiments also weighed down on report that
the Indian manufacturing sector slowed down in the month of December, despite
easing cost inflationary pressures. Growth was curtailed by competitive
pressures, labour issues and challenging public policies. As per the survey
report, the Nikkei India Manufacturing Purchasing Managers' Index (PMI) - a
composite single-figure indicator of manufacturing performance - eased to 53.2
in December from 54 in November. Finally, the rupee ended at 70.18, 75 paise
weaker from its previous close of 69.43 on Tuesday.
The FIIs as per Wednesday'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 2193.74 crore against gross selling of Rs 1722.12 crore,
while in the debt segment, the gross purchase was of Rs 39.00 crore with gross
sales of Rs 601.18 crore. Besides, in the hybrid segment, the gross buying was
of Rs 1.72 crore against gross selling of Rs 0.21 crore.
The US markets ended marginally
higher on Wednesday, extending a recent stretch of volatility as anxiety about
global growth and interest rates rippled across markets. Asian markets were
trading mostly in green on Thursday thanks to bargain hunting and a bump in
crude oil prices. However, upside remain limited after Apple Inc. added to
global growth concerns by cutting its guidance due to weaker sales in China.
Indian equity markets ended Wednesday's trading session with cut of over a
percent following weak cues from Asia and Europe as the US government shutdown
entered its 12th day and manufacturing data from China disappointed investors.
Today, the markets are likely to open in green tracking positive global cues.
Traders will be taking encouragement with the Finance Ministry in its 2018
review saying that the Indian economy is projected to be the fastest-growing
major economy in the current and upcoming fiscal 2019-20. It also emphasized
that the government has taken several steps to boost investors' confidence. It
added that the average growth of the Indian economy between 2014-15 and 2017-18
was 7.3%, fastest among the major economies in the world. Some support may also
come with the Finance Ministry's another statement that the direct tax-to-GDP
ratio of 5.98% achieved during 2017-18 fiscal is the best in the last 10 years.
It was 5.57% in 2016-17 and 5.47% in 2015-16. Also, traders will be getting
some support with the government's decision to provide 3% interest subsidy to
merchant exporters, entailing an expenditure of Rs 600 crore, to enhance
liquidity with a view to boosting outbound shipments. There will be some
reaction in IT sector stocks with R Chandrashekhar, Former President of the
industry body NASSCOM, saying that the ongoing digital transformation taking
place globally is making India's information technology (IT) industry stronger,
a trend that would continue its growth momentum at least in the foreseeable
future. There will be some buzz in the
banking sector with the Reserve Bank of India's (RBI) data showing that the
banking sector failed to meet the priority-sector lending (PSL) targets
overall. The banks also failed to meet targets of specific sectors such as agriculture
and micro, small and medium enterprises (MSMEs). PSBs met their PSL target for
agriculture of 18%, private banks and foreign banks failed to meet the targets
at 16.2% and 16.7%, respectively. Also,
there will be some buzz in coal sector stocks with Minister for Coal, Piyush
Goyal's statement that the current focus of the government is on boosting
production from operational coal mines.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,792.50
|
10,719.92
|
10,880.22
|
BSE Sensex
|
35,891.52
|
35,671.45
|
36,174.14
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
325.83
|
184.65
|
182.43
|
186.93
|
SBI
|
255.60
|
293.90
|
290.50
|
299.90
|
Vedanta
|
189.35
|
193.15
|
190.43
|
197.93
|
ICICI Bank
|
182.43
|
364.60
|
360.63
|
368.23
|
ONGC
|
174.37
|
147.05
|
145.75
|
148.35
|
Tata Consultancy Services has launched Jile 2.0, a new major release of Jile, its Agile DevOps product-on-cloud.
Bajaj Auto has registered a rise of 18% in total sales to 346,199 units in December 2018 against 292,547 units in December 2017.
Eicher Motors and Volvo Group's joint venture -- VE Commercial Vehicles has reported 2.4% increase in sales for December 2018 to 6,236 units.
Coal India's subsidiary -- Northern Coalfields production and offtake grew by 11% and 7%, respectively, during the April-December period.