Indian equity benchmarks
retreated from record highs and ended the session with a cut of around one
third of a percent on Wednesday, as Reserve Bank of India's (RBI's) decision to
lower the policy rate by 25 bps to 6% failed to boost sentiment. This was the
first rate cut since October 2016 and the interest rate is now at a 6-year low.
No change in cash reserve ratio (CRR) too dampened sentiments. Though, markets
started the session on positive note, as traders took some encouragement with
Minister of State for Finance Santosh Kumar Gangwar's statement that the
government has collected over Rs 1.80 lakh crore in direct tax till July 15 in
the current fiscal, an increase of 21.4% year-on-year, ‘belying' fears of
slowdown in economic activities. The current growth rate is higher than the
target rate of 15.32% required to achieve the Budget Estimate. Meanwhile,
Finance Minister Arun Jaitley has said that the GST Council, at its next
meeting later this week, will finalise a mechanism to operationalise
anti-profiteering clause which seeks to protect consumers' interest. GST
Council comprising state finance minister will meet on August 5 to take stock
of implementation of GST which was rolled from July 1. However, markets turned
red and extended fall despite the announcement of a 25 basis points cut in the
repo rate by RBI, as the markets appear to have already factored in a quarter
percentage point rate cut. Traders also remained concerned after finance
minister Arun Jaitley cautioned that the fiscal deficit of states may rise this
year, with states likely to tap the markets to raise funds to finance farm debt
waivers. Some cautiousness also came with the Central Electricity Authority's
(CEA) statement that about 7% of India's coal-fired power plants may never be
able to comply with new environmental norms because they lack the space to
install emission-cutting equipment, potentially leading to their shutdown.
Finally, the BSE Sensex shed 98.43 points or 0.30% to 32,476.74, while the CNX
Nifty was down by 33.15 points or 0.33% to 10,081.50.
The US markets closed mostly
higher on Wednesday, with the Dow finishing above the 22,000 threshold for the
first time, with sharp gains for Apple helping the blue-chip index to notch its
seventh straight daily rise as Nasdaq struggled. Adding to the positive tone on
the day, private sector hiring remained strong in July as employers added
178,000 jobs. ADP revised June's gain to 191,000. Details of ADP's report
showed that small private-sector businesses added 50,000 jobs in July, medium-size
businesses added 83,000 and large businesses added 45,000. Most of those gains
were in the service sector - 174,000 jobs added there, compared with only 4,000
for goods producers. Meanwhile, San Francisco Fed President John Williams said
that the US economy will likely be strong enough for the Federal Reserve to
trim its bond holdings in September, in a sign the central bank was close to
unwinding a controversial stimulus tool. He added that he was comfortable with
the view that the Fed could raise interest rates once more this year and around
three times next year. The Dow Jones Industrial Average added 52.32 points or
0.24 percent to 22,016.24, the S&P 500 edged higher by 1.22 points or 0.05
percent to 2,477.57, while the Nasdaq lost 0.29 points to 6,362.65.
Crude oil futures made some
recovery and ended higher on Wednesday, as investors cheered data showing
supplies of U.S. crude fell for the fifth-straight week while refinery activity
continued to grow. Crude prices though were under pressure in the early trade
but recovered after a report from the Energy Information Administration (EIA)
showed crude and gasoline stockpiles fell last week, pointing to an uptick in
demand for crude and refinery activity. EIA reported that inventories of U.S.
crude fell by roughly 1.5m barrels in the week ended July 28. Gasoline
inventories fell by roughly 2.5m barrels, while distillate stockpiles fell by
150,000 barrels. Benchmark crude oil futures for September delivery gained $0.42
or 0.87 percent to $49.59 on the New York Mercantile Exchange. In London, Brent
crude for September delivery ended higher by 0.71 percent at $52.15 a barrel on
the ICE.
Indian
rupee appreciated against US dollar to hit over 2-year high and breached
64-mark on Wednesday, on increased liquidation of the American currency by
exporters and banks. Local currency gained further momentum after the Reserve
Bank of India (RBI) decided to cut its key policy rate, or the repo rate, by 25
bps to 6%, which was in line with market expectations. On the global front,
dollar was near 15-month lows against a currency basket on Wednesday as
investors turned their attention to key economic events this week, particularly
Friday's US jobs report for July. Finally, the rupee ended at 63.70, 38 paise
stronger from its previous close of 64.08 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
4579.68 crore against gross selling of Rs 5499.50 crore, while in the debt
segment, the gross purchase was of Rs 3249.80 crore with gross sales of Rs
2005.58 crore.
The US markets made mostly a
positive close in the last session and the, Dow notched a psychological
milestone at 22,000, highlighting a steady record ascent for the blue-chip
benchmark. The Asian markets have made
mostly a negative start, with investors assessing the strength of company
earnings before American labor-market data provides the latest clues on the
health of global growth. The Japanese market too was down as the yen rose
against the dollar. The Indian markets kept losing pace through the day after a
positive start and ended with cuts of over a quarter percent in the last
session, as the RBI's 25 bps repo rate cut and no change in cash reserve ratio
fell short of market expectations. Today, the start is likely to remain somber
and the weakness may extend amid the soft global cues. Traders will ponder rate
outlook, a day after the RBI maintained its neutral stance, citing record low
inflation. Most of the market participants are not expecting any further rate
cut this year, saying the present low inflation print is not sustainable.
However, the Bankers have said the RBI's move to cut its policy rate by 0.25
percentage point would help boost credit demand, improve investor sentiment and
propel growth. Traders will also be getting some support with Finance Minister
Arun Jaitley's indications that there could be scope for rationalisation of
rates under the Goods and Services Tax (GST) as its implementation progresses.
Jaitley also said that he was under pressure to change the GST Network which
people said was faulty but felt the structure was correct. Additionally, John
Chambers, Chairman of the newly-formed US-India Strategic Partnership Forum,
predicted that India would turn out to be a role model for the world economies.
He said India will figure among the top three economic powers in the world over
the next 10-15 years. There will be some buzz in the telecom sector, on report
that the government may soon consider the telecom industry's demand of doing
away with telecom circles and will work towards the concept of one nation, one
network and one licence. There will be lots of important earnings during the
day to keep the markets in action.
Support and Resistance: NSE (Nifty) and BSE
(Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10081.50
|
10044.52
|
10128.17
|
BSE Sensex
|
32476.74
|
32352.26
|
32643.85
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
NTPC
|
185.60
|
171.85
|
167.48
|
174.58
|
SBI
|
170.06
|
307.70
|
304.73
|
311.23
|
ITC
|
98.67
|
285.45
|
283.20
|
288.80
|
ICICI Bank
|
83.48
|
301.85
|
299.55
|
304.30
|
ONGC
|
77.43
|
165.40
|
163.83
|
167.23
|
Hero MotoCorp has sold 623,269 units of two-wheelers in July 2017, registering a healthy growth of 17.1% over the corresponding month of the previous fiscal when the company sold 532,113 units.
Lupin has reported a fall of 59.40% in its consolidated net profit at Rs 358.06 crore for the quarter ended June 30, 2017 as compared to Rs 881.95 crore for the same quarter in the previous year.
Coal India has reported provisional production of 36.64 million tonnes in July 2017, as against a target of 37.66 MT.
NTPC is planning to add 20 more charging stations for electric vehicles after successfully commissioning two charging stations in Delhi.