Indian equity bourses came back
in green terrain in Tuesday's trading session, with Sensex and Nifty ending
higher by around 0.50% each. The start of the day was fabulous, aided with
Commerce and Industry Minister Piyush Goyal's statement that use of artificial
intelligence (AI) in different forms can help achieve the target of making
India a $5 trillion economy in the coming years. Adding more relief on the
street, the Reserve Bank of India (RBI) has revised the Supervisory Action
Framework (SAF) for urban cooperative banks (UCBs), with an aim to ensure
expeditious resolution of financial stress being faced by some of them. But,
indices pared some of gains in noon deals, amid a private report that India's
government is likely to cut spending for the current fiscal year by as much as
Rs 2 lakh crore ($27.82 billion) as it faces one of the biggest tax shortfalls
in recent year. It added that Asia's third largest economy, which is growing at
its slowest pace in over six years because of lack of private investment, could
be hurt further if the government cuts spending. Some concerns also came with
reports that markets view the rally in Brent oil prices, triggered by
geopolitical tensions, as a threat to the improvement in India's FY20 current
account deficit and forecasts for a balance of payment surplus. Finally, the
BSE Sensex gained 192.84 points or 0.47% to 40,869.47, while the CNX Nifty was
up by 59.90 points or 0.50% to 12,052.95.
The US markets ended lower on
Tuesday amid uncertainty about the impact of rising tensions between the US and
Iran following the US airstrike that killed top Iranian military commander
Qasem Soleimani. Iran has vowed to take revenge against the US for the killing
of Soleimani. However, losses remained capped on report that while traders
generally seem optimistic that the war of words between Washington and Tehran
will not escalate into a full-fledged military conflict, the uncertainty has
kept buying interest in check. On the economic data front, a report released by
the Commerce Department showed a pullback in new orders for US manufactured
goods in the month of November. The Commerce Department said factory orders
fell by 0.7 percent in November after inching up by a downwardly revised 0.2
percent in October. Street had expected orders to drop by 0.8 percent compared
to the 0.3 percent increase originally reported for the previous month.
Besides, with exports rising and imports falling, the Commerce Department
released a report showing the US trade deficit narrowed significantly in the
month of November. The report said the trade deficit narrowed to $43.1 billion
in November from a revised $46.9 billion in October. The trade deficit shrank
to its smallest since hitting $42.0 billion in October 2016. The narrower trade
deficit came as the value of exports climbed by 0.7 percent to $208.6 billion
in November after edging down by 0.1 percent to $207.3 billion in October.
Meanwhile, the report said the value of imports slumped by 1.0 percent to
$251.7 billion in November after tumbling by 1.7 percent to $258.7 billion in
October.
Crude oil futures settled lower
on Tuesday on hopes that the war of words between Washington and Teheran will
not escalate into a full-fledged military conflict. Meanwhile, there were
conflicting reports about American military repositioning troops in preparation
for leaving Iraq. Besides, traders were awaiting the data on crude inventory.
While the American Petroleum Institute will release its weekly oil report late
Tuesday, the Energy Information Administration's inventory data is due
Wednesday. Crude oil futures for February declined 57 cents or 0.9 percent to
settle at $62.70 a barrel on the New York Mercantile Exchange. March Brent
dropped 64 cents or 0.9 percent to settle at $68.27 a barrel on London's
Intercontinental Exchange.
Reversing
its three-session fall, the rupee bounced back to end higher against the US
currency on Tuesday, on persistent selling of the American currency by
exporters. Sentiments turned optimistic with Commerce and Industry Minister
Piyush Goyal's statement that use of artificial intelligence (AI) in different
forms can help achieve the target of making India a $5 trillion economy in the
coming years. Besides, positive trend in equity market supported the rupee.
However, local unit cut most of its early gains, as some concern came with
private report that India's government is likely to cut spending for the
current fiscal year by as much as Rs 2 lakh crore ($27.82 billion) as it faces
one of the biggest tax shortfalls in recent year. It added that Asia's third
largest economy, which is growing at its slowest pace in over six years because
of lack of private investment, could be hurt further if the government cuts
spending. On the global front, Japanese yen pulled back from recent highs on
Tuesday as investors became less anxious about the chances of an all-out
conflict between the United States and Iran. Finally, the rupee ended at 71.82,
11 paise stronger from its previous close of 71.93 on Monday.
The
FIIs as per Tuesday's data were net sellers in both equity and debt segments.
In equity segment, the gross buying was of Rs 3675.19 crore against gross
selling of Rs 3694.18 crore, while in the debt segment, the gross purchase was
of Rs 528.96 crore with gross sales of Rs 3946.55 crore. Besides in the hybrid
segment, the gross buying was nil against gross selling of Rs 39.45 crore.
The US markets ended lower on
Tuesday as investor caution persisted amid a dispute between the United States
and Iran. All the Asian markets are trading in red on Wednesday following
reports that rockets were fired at an Iraqi air base that hosts American
troops. Indian markets ended higher on Tuesday with gains around half a percent
each as no fresh aggressive moves from the US and Iran helped crude prices
ease. Today, the benchmarks are likely to make gap-down opening tracking
sell-off in Asian peers amid jump in oil prices. Traders will be concerned with
the first advance estimates released by the Central Statistics Ministry showing
that the government has estimated India's GDP growth during fiscal 2019-20 at
5% as compared to 6.8% in the year-ago period. The decline has been mainly on
account of deceleration in manufacturing sector growth, which is expected to
come down to 2% in 2019-20 from 6.2% in the year-ago fiscal. Also, there will
be some cautiousness with a private report indicating that markets view the
rally in Brent oil prices, triggered by geopolitical tensions, as a threat to
the improvement in India's FY20 current account deficit and forecasts for a
balance of payment surplus. However, some respite may come later in the day
with Finance minister Nirmala Sitharaman's statement that the government is
taking various steps to simplify the taxation system and eliminate harassment
of honest taxpayers. Some support may also come with the government data on national
income showing that the country's per-capita monthly income is estimated to
have risen by 6.8% to Rs 11,254 during 2019-20. Meanwhile, as per a new
amendment made to the norms by the Insolvency and Bankruptcy Board of India
(IBBI), a secured creditor cannot sell assets of a company undergoing
liquidation process to any person barred from submitting an insolvency
resolution plan. Reality stocks will be in focus with a private report that
despite a slowdown in the economic, housing sales witnessed a marginal rise
2019 across eight major cities to nearly 2.46 lakh units. There will be some
reaction in metal stocks with ICRA's statement that prices of aluminium and
copper are showing signs of recovery in the last three months as trade tensions
in international markets have eased to an extent leading to an improvement in
sentiment.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
12,052.95
|
11,988.15
|
12,134.95
|
BSE Sensex
|
40,869.47
|
40,654.51
|
41,157.28
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,110.95
|
45.05
|
43.87
|
46.32
|
SBI
|
509.67
|
318.40
|
313.53
|
325.13
|
Tata Motors
|
349.95
|
184.70
|
181.53
|
188.63
|
Vedanta
|
244.18
|
156.00
|
153.43
|
157.68
|
ICICI Bank
|
161.02
|
522.90
|
517.83
|
531.78
|
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