Wednesday's session turned out to be a dreadful session for
the Indian equity markets as the benchmark equity indices got bludgeoned by
over a percent in the session. The wretchedness in the global markets got
transmitted into the domestic frontline indices as a new poll showing
Republican candidate Donald Trump leading the US
presidential race spooked investors. Polls suggest a tight neck-to-neck race
between the two candidates, following last week's news that the FBI had opened
a new investigation into Clinton's
private email server. Another cause for concern is crude oil prices, which
declined for the fourth straight day on expectations that U.S.
crude inventories were bolstered significantly last week. Crude oil price has
always had a positive correlation with global equities. Investors are also
cautious as the US Federal Reserve is due to announce its latest monetary
policy decision later in the day. On the domestic front, sentiments were
undermined by the report that foreign portfolio investors (FPIs) sold shares
worth a net Rs 123.96 crore on November
01, 2016. Depreciation in rupee against dollar also weighed down
sentiments. Meanwhile, Standard & Poor's affirmed India's
sovereign ratings, welcoming the country's policy stability and improved
monetary credibility, but ruled out any upgrade for this year or in 2017
because of weak public finances and low per capita income. The global rating
agency has stuck to its rating of 'BBB-' with a 'stable' outlook, saying it
would need to see more efforts to lower the country's net general government
debt level to below 60% of gross domestic product. The ratings agency also
expressed concerns that government could delay subsidy cuts, while noting the
country's banking sector would likely need capital infusions of about $45
billion by 2019, or 2% of the country's GDP, to meet global Basel III capital
norms. Market participants also overlooked ASSOCHAM's report that Indian
economy is expected to fare better in the second half of the current fiscal
backed by uptick in sales and improved capacity utilization, though fresh
investments and new jobs creation may be a concern going forward. Finally, the
BSE Sensex declined by 349.39 points or 1.25% to 27527.22, while the CNX Nifty
dropped 112.25 points or 1.30% to 8,514.00.
The US
markets closed lower on Wednesday, following the weakness seen in the previous
session after the latest polls confirmed the presidential race has tightened
days before the election. The major
upset came with rate hike signal after the Federal Reserve on Wednesday kept
interest rates unchanged, as expected, but policy makers said the case for a
rate hike has strengthened. FOMC members voted 8 to 2 to maintain interest
rates in a range of 0.25 to 0.5%. Fed said in its policy statement that committee
judges that the case for an increase in the federal funds rate has continued to
strengthen but decided, for the time being, to wait for some further evidence
of further progress toward its objectives. The Dow Jones Industrial Average declined
by 77.32 points or 0.4%, to 17,959.78, the S&P 500 index fell 13.73 points
or 0.7%, to 2,097, for its longest losing streak in five years, while the
Nasdaq lost 48.01 points or 0.9%, to 5,105.57.
Crude
oil futures slumped on Wednesday to five weeks low on reports of a build-up in
official US crude
stocks. The EIA data showed that crude supplies in the U.S.
rose by the most since at least 1984 last week. Crude oil inventories rose by 14.4
million barrels in the week ended October 28. The report also showed that
gasoline inventories decreased by 2.2 million barrels, while distillate
inventories including diesel, reported a drop of 1.8 million barrels. Also, the
doubts remain about OPEC's ability to deliver a planned cut in output to 32-5-33
million barrels a day to address a global supply glut. Though, some weakness in
dollar restricted further fall. Benchmark crude oil futures for December
delivery dropped $1.34 or 2.94 percent to close at $45.27 a barrel on the New
York Mercantile Exchange. In London,
Brent oil futures for December delivery declined by $1.51 or 3.05 percent to $46.62
a barrel on the ICE.
Indian rupee recouped its intraday losses to close little
changed against US dollar, after a volatile trading session, on dollar selling
by some banks and importers. Losses in the domestic equity market and
cautiousness ahead of US Federal Reserve's latest monetary policy decision,
also weighed on rupee sentiments. However, domestic currency got some support
with ASSOCHAM's report that Indian economy is expected to fare better in the
second half of the current fiscal backed by uptick in sales and improved
capacity utilization, though fresh investments and new jobs creation may be a concern
going forward. On the global front, US dollar slumped against its major rivals
as the US presidential election increasingly looked too close to
call, jangling investors' nerves and fuelling demand for perceived havens such
as the Japanese yen. Finally, the rupee ended at 66.72, 1 paise weaker from its
previous close of 66.71 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
4930.89 crore against gross selling of Rs 5026.88 crore, while in the debt
segment, the gross purchase was of Rs 1323.08 crore with gross sales of Rs
1010.85 crore.
The US
markets once again ended lower in last session with some polls confirming tightened presidential
race days ahead of the election and Federal Reserve's signal that an interest
rate hike is imminent. The Asian markets have made mostly a weak start and some
of the indices were down by over a percent in early deals on concern of rate
hike in US. The Indian markets suffered sharp setback in last session and the
major benchmarks deposed over a percent in a broad based selling, mainly on US
election jitters. Today the start is likely to be somber again, tailing the weak
global cues. Also, there is a big setback with global rating agency Standard
& Poor's retaining India's rating at BBB- and ruling out any upgrade in
India's sovereign rating through 2017 despite policy stability and reforms. S&P
maintained the lowest investment grade rating of 'BBB-' with a 'stable' outlook
saying it wants to see more efforts to lower government debt to below 60 percent
of GDP and that it did not expect revenues to rise enough to meaningfully lower
the deficit over the medium term. There will be some concern with GST Council
meet starting today and both the Centre and states seeming to harden their
positions with respect to the issues they disagree on. There is a raging debate on the Centre's
proposal for having multiple rates for GST. Though, some support can come with a
survey of Federation of Indian Chambers of Commerce and Industry (Ficci), which
has said that India Inc believes the economy is faring better and is optimistic
about demand rising. Expectations regarding the performance of the economy in
the next six months went up, with about 75 per cent positive on growth, up from
66 per cent. There will be some buzz in the banking stocks with two major lenders
State Bank of India (SBI) and ICICI
Bank cutting their respective lending rates for home loans to boost housing
credit during the festive season. There will be lots of earnings announcements
too, to keep the markets in action.
Support and Resistance: NSE (Nifty)
and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8514.00
|
8496.07
|
8540.72
|
BSE Sensex
|
27527.22
|
27458.91
|
27637.42 |
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
ICICI Bank
|
137.64
|
271.90
|
269.35
|
273.85
|
SBI
|
137.16
|
251.05
|
249.07
|
254.52
|
Hindalco
|
113.1
|
156.50
|
153.70
|
158.75
|
Axis Bank
|
98.86
|
476.80
|
469.77
|
482.17
|
ONGC
|
98.5
|
277.25
|
273.40
|
283.45
|
- Yes
Bank has generated $ 650 million worth of business outstanding at its IFSC
Banking Unit in Gujarat International
Finance Tec City.
- Coal
India has
produced 273.57 million tonnes of coal in the first seven months of the ongoing
fiscal, lower than the target of 307 MT, even as the demand for fossil fuel
started picking up.
- M&M has reported its auto sales numbers
for October 2016 which stood at 52,008 vehicles compared to 51,383 vehicles
during October 2015.
- Tata
Consultancy Services and University of New South Wales,
Australia have signed a
memorandum of understanding to pursue technology research collaboration.
- Bajaj
Auto has registered rise of 0.95% in total sales to 356,168 units in October
2016 against 3,52,822 units in October 2015.