Indian benchmark indices extended the sorrow of closing in
the red territory for the second consecutive session on Thursday as investors
fretted over the rising chances that maverick tycoon Donald Trump could win the
US presidency in next Tuesday's election. Trump's provocative stand on key
issues like global trade, immigration, outsourcing, internal security,
globalization and trade barriers have caused a considerable amount of anxiety
among the global business community. Further, the US Federal Reserve on
Wednesday indicated a likely hike in interest rates in December due to
improving economic conditions, too induced a prolonged spell of volatility in
the local market. On the domestic front, sentiments were undermined by the
repot that GST Council, which began 2-day deliberations today, is likely to
shortly finalize a tax structure as 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. Market participants were also
disappointed with the S&P Global Ratings' decision to rule out an upgrade
for India over
the next two years even as it affirmed the stable outlook on the country's
‘BBB-' long-term and ‘A-3' short-term sovereign credit ratings. The global
rating agency has stuck to its rating, 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. However, investors got some comfort with the report
indicating India's
Services sector activity gathered pace in October, driven by sharper increase
in new business orders amid strong demand and improved market conditions. The
Nikkei India Services Purchasing Managers' Index (PMI), which tracks services
sector companies on a monthly basis, stood at 54.5 in October as against 52.0
in September. Some support also came with the report that India Inc is
optimistic about its business prospects with a majority of firms saying current
economic conditions are 'moderately to substantially better' compared to the
last six months, even as cost and availability of credit remain a concern. The
Overall Business Confidence Index (OBCI) rose to a six quarter high in the
Business Confidence Survey conducted by FICCI, indicating that demand is
gaining traction. The index value stood at 67.3 in the current round as against
62.8 in the previous poll. Finally, the BSE Sensex declined by 96.94 points or
0.35% to 27430.28, while the CNX Nifty dropped 29.05 points or 0.34% to
8,484.95.
The
US markets extended their fall on Thursday and the S&P 500 fell for
an eighth straight session, its longest losing streak since the 2008 financial
crisis, as Facebook shares weighed. Facebook shares tumbled 5.7 percent as the
world's largest online social media network warned that revenue growth would
slow this quarter. Investors were also unnerved by signs the US
presidential race between Democrat Hillary Clinton and Republican Donald Trump
is tightening. Weak oil prices pressured energy shares, while lackluster
economic data contributed to the weakness on Wall Street ahead of Friday's
October jobs report. The Dow Jones Industrial Average lost 28.97 points or 0.16
percent to 17,930.67, Nasdaq dropped 47.16 points or 0.92 percent to 5,058.41,
while S&P 500 was down by 9.28 points or 0.44 percent to 2,088.66.
Crude
oil futures stabilized and moved a bit higher on Thursday, after plunging
nearly 3% to five-week lows in the prior session. However, any major gains were
capped with the possibility that producers could walk away empty-handed from
the November meeting looms large after Iraq, Iran, Nigeria and Libya all
signaled they might not take part in the proposed production cut deal. Benchmark
crude oil futures for December delivery gained $0.06 or 0.13 percent to close
at $45.40 a barrel on the New York Mercantile Exchange. In London,
Brent oil futures for December delivery was up by $0.23 or 0.49 percent to $47.09
a barrel on the ICE.
Indian rupee depreciated for the second consecutive session
against the US dollar on Thursday due to fresh demand for the American currency
from banks and importers. Sentiments remained dampened as global rating agency,
Standard & Poor (S&P) retained India's sovereign rating at ‘BBB-' with
stable outlook and ruled out any upgrade in two years, citing weak public
finances. S&P maintained the lowest investment grade rating 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. Losses in equity market and uncertainties about the
outcome of the US elections next week also weighed on the rupee sentiments.
On the global front, sterling jumped against dollar on Thursday after a UK court ruled that the government must seek parliamentary
approval to begin the formal process of leaving the European Union. Finally,
the rupee ended at 66.74, 2 paise weaker from its previous close of 66.72 on
Wednesday.
The
FIIs as per Thursday'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
3695.41 crore against gross selling of Rs 4309.18 crore, while in the debt
segment, the gross purchase was of Rs 723.30 crore with gross sales of Rs
603.06 crore.
The US
markets continued their slide in last session on concern over the Presidential
election outcome amid lackluster economic data. The Asian markets have extended
the somberness and most of the indices have made a weak start with Japanese
market taking the lead despite the services sector in Japan
swinging to expansion in October, as yen turned stronger. The Indian markets lost
their tempo in the final hours and ended in red again, with Nifty slipping
below 8500 mark. Traders even over looked the good services PMI amid global
concern. Today, the start is likely to be in red on feeble global cues but
traders may get some respite with report that in a major breakthrough for
rollout of the Goods and Services Tax regime from April 1 next year, the
government finalized four-tier GST tax structure of 5, 12, 18 and 28 percent
that aims to lower tax incidence on most goods and keep out essential items. Luxury
items like high-end cars and demerit goods including tobacco, pan masala and
aerated drinks, will be taxed at the highest rate and would also attract a cess
in a way that the total incidence of tax remains at almost the current level. Chief
Economic Advisor Arvind Subramanian has said that the GST Council's decision to
peg the tax rate on items of mass consumption at 5 per cent will bring down
prices and soften inflation. Though, all the cigarette companies are likely to
be under pressure. There will be some buzz in the coal sector stocks, as the Coal
secretary Anil Swarup has said that the government was considering giving mines
to private players for commercial mining but the demand situation was holding
it back from taking a final call. There will be some buzz in steel stocks too,
as the Finance Ministry has imposed provisional anti-dumping duty on import of
hot rolled steel products (bars and rods) from China.
This anti-dumping duty will be valid for a period of six months.
Support and Resistance: NSE (Nifty)
and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8484.95
|
8461.52
|
8523.02
|
BSE Sensex
|
27430.28
|
27352.78
|
27554.26 |
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
Hindalco
|
261.47
|
162.80
|
157.57
|
167.22
|
SBI
|
129.02
|
245.65
|
242.73
|
250.68
|
ICICI Bank
|
113.5
|
269.75
|
266.63
|
274.63
|
ITC
|
88.69
|
240.30
|
236.77
|
243.07
|
Tata Steel
|
84.94
|
403.30
|
394.73
|
415.78 |
- ICICI
Bank has launched a credit facility against home loans for salaried customers.
- Hero
MotoCorp has reported a 3.65% increase in sales at 6,63,153 units in October,
its third consecutive month of six-lakh plus sales after August (616,424) and
September (674,961).
- Tech
Mahindra has launched its Virtual Network Function Exchange, along with a
number of leading new age providers of Software Defined Networks and Network
Functions Virtualization products.
- Ambuja
Cements has reported 80.39% jump in its net profit at Rs 277.02 crore for the
quarter under review as compared to Rs 153.57 crore for the same quarter in the
previous year.
- Mahindra
and Mahindra's South Korean subsidiary SsangYong Motor, has sold a total of
13,728 units in October 2016.