Indian equity indices staged a sharp recovery in the second
half of the trading session as the market took Donald Trump's victory in its
stride. Donald John Trump was elected the 45th president of the United
States on Tuesday, becoming the least
politically experienced candidate to ascend to the office in the nation's
240-year history. Investors fear a Trump victory could cause global economic
and trade turmoil and years of policy unpredictability, discouraging the
Federal Reserve from raising interest rates in December as long expected. IT
stocks came under pressure as investors reacted to the US
presidential elections result. For the $150 billion IT services industry a
Trump victory will only add to its woes and challenges the industry is facing
on growth due to automation and technology disruption. Trump right from the
start of his campaign days has stated that he wants to bring jobs back to the US.
This includes both the manufacturing jobs that China
has taken away and employment in tech industries that has come to India.
On the domestic front, sentiments got undermined on Prime Minister Narendra
Modi's announcement that 500 and 1,000 rupee banknotes would be withdrawn from
circulation at midnight to crack down
on rampant corruption and counterfeit currency. The surprise move was designed
to bring billions of dollars worth of cash in unaccounted wealth into the
mainstream economy, but this move will adversely impact the country's economy
in near term, given that about 40% of the economy is driven by small- and
medium-sized enterprises that largely depend on cash transactions. Sectors like
real estate, construction material, and jewellery that use more of black money
will take a big knock, while e-commerce sector having cash on delivery may feel
impact on sales. Every unorganised sector in every trade also will feel the
impact of this bold move. However, investors took some sigh of relief with the
report that a new and simpler portal for the incoming Goods and Services Tax
regime went live on Tuesday that will enable easy filing of returns and tax
payments through credit/debit cards and other modes. Finally, the BSE Sensex
declined 338.61 points or 1.23% to 27252.53, while the CNX Nifty dropped 111.55
points or 1.31% to 8,432.00.
The US
markets showed strong upmove on Wednesday and the major averages closed at
their best levels of the day, with traders reacting positively to Republican
presidential nominee Donald Trump's surprise victory in the race for the White
House. Trump defeated Hillary Clinton for the presidency. On the economy front,
the Commerce Department released a report on Wednesday showing only a slight
uptick in US
wholesale inventories in the month of September. The Commerce Department said
wholesale inventories inched up by 0.1 percent in September after edging down
by a revised 0.1 percent in August. Inventories of petroleum and petroleum
products and drugs and druggists' sundries showed significant increases during
the month. On the other hand, the report said inventories of durable goods fell
by 0.4 percent in September after inching up by 0.1 percent in August. The
Commerce Department also said wholesale sales rose by 0.2 percent in September
after climbing by 0.7 percent in August. The Dow Jones Industrial Average surged
by 256.95 points or 1.4 percent to 18,589.69, the Nasdaq jumped 57.58 points or
1.1 percent to 5,251.07 and the S&P 500 surged up 23.70 points or 1.1
percent to 2,163.26.
Crude
oil futures strengthened on Wednesday, with traders taking Donald Trump's
historic election victory in stride along with stocks and the dollar which
bounced back from a huge early slide following Donald Trump's surprise victory
in the U.S.
presidential election. Traders even overlooked report of rise in inventory,
according to the Energy Information Administration (EIA) crude oil inventories
increased by 2.4 million barrels (MMbbl) to a total of 485.0 MMbbl. Benchmark
crude oil futures for December delivery was up by $0.29 or 0.6 percent to close
at $45.27 a barrel on the New York Mercantile Exchange. In London,
Brent oil futures for December delivery rose by $0.32 or 0.7 percent to $46.36 a
barrel on the ICE.
After making a weak start, Indian rupee recouped
substantial ground and ended stronger against dollar on Wednesday as the
country's move to withdraw larger banknotes from circulation was seen as a
positive for the economy, ushering transparency and leading to easing
inflation. Sentiments also got some support with the report that a new and
simpler portal for the incoming Goods and Services Tax regime went live on
Tuesday that will enable easy filing of returns and tax payments through
credit/debit cards and other modes. On the global front, yen climbed against
dollar after Donald Trump's victory in the U.S. election rattled investors. Finally, the rupee ended at
66.43, 19 paise stronger from its previous close of 66.62 on Tuesday.
The
FIIs as per Wednesday's data were net buyers in equity and debt segments both.
In equity segment, the gross buying was of Rs 3848.00 crore against gross sell
of Rs 3528.40 crore, while in the debt segment, the gross purchase was of Rs
1062.99 crore with gross sales of Rs 811.25 crore.
The US
markets recovering from the early slide posted strong gains in last session
after Donald Trump defeated Hillary Clinton. He has promised he will build a
wall along the border with Mexico,
suspend the Syrian refugee resettlement program, repeal and replace the
Affordable Care Act and renegotiate NAFTA. The Asian markets have made a strong
start and the Japanese markets has recovered more than what it had lost in last
session biggest daily drop since the Brexit poll. Other indices in the region
too are up in range of 1-2 percent. The Indian markets made a strong come back
from the severe early fall to close with cut of just over a percent. Today, the
start is likely to be in green and the markets will be recovering the previous
session losses with traders taking the Donald Trump's victory in stride. Industry
body ASSOCHAM has expressed confidence that apprehensions linked to US
President elect Donald Trump would certainly prove wrong even as India Inc
looks forward to taking bilateral economic engagement to a greater level under
the new administration. India Inc can join hands with the Trump Administration
in building of the US
infrastructure projects. The Indian industry has always been a great companion
for the US
industries in terms of enhancing value even to the American jobs. Meanwhile, Union
Finance Minister Arun Jaitley has said the Modi government's decision to
withdraw Rs 500 and Rs 1000 notes will move the country towards a cashless
economy. He also said that deposits of now-defunct old Rs 500 and Rs 1,000 currency
notes in bank accounts will not enjoy immunity from tax and law will apply on
source of such money. Traders will also be getting some support with report
that the Centre's net tax kitty rose up to Rs 8.51 lakh crore between April and
October 2016. Net
direct tax collections jumped up 10.66 per cent to Rs 3.77 lakh crore in
October while direct tax mop-up was more robust and increased 26.7 per cent to Rs
4.85 lakh crore. Pharma stocks will keep buzzing as the US
is the world's largest drug market and Drug prices and the worrying cost of
healthcare featured prominently in Trump's campaign.
Support and Resistance: NSE (Nifty)
and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8432.00
|
8130.77
|
8604.72
|
BSE Sensex
|
27252.53
|
26304.19
|
27799.12 |
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
ICICI Bank
|
464.14
|
281.45
|
256.05
|
295.80
|
SBI
|
317.62
|
260.00
|
242.98
|
269.03
|
ITC
|
230.27
|
248.15
|
239.47
|
255.92
|
BHEL
|
155.65
|
138.60
|
131.52
|
143.07
|
Sun pharma
|
149.63
|
660.75
|
598.72
|
695.97 |
- L&T
has signed a long-term ‘Technical Licence Agreement' with Chiyoda Corporation
for its 'Chiyoda Thoroughbred 121 Flue Gas Desulphurisation' Technology.
- NTPC
is well on course to meet its target of generating 10 gigawatts of solar energy
as part of the government's aim of 100 GW by 2022.
- Lupin
has reported 34.30% rise in its net profit at Rs 653.08 crore for the quarter
under review as compared to Rs 486.30 crore for the same quarter in the
previous year.
- SBI
is gearing up to make available "adequate number" of Rs 100 notes at all its
ATMs and branches within the next two days to help reduce the inconvenience to
the public after the government last night scrapped Rs 500 and Rs 1,000
banknotes.
- Power Grid has reported 32.01% rise in its net profit
at Rs 1872.00 crore for the quarter ended September 30, 2016 as compared to Rs 1418.03 crore for the same quarter
in the previous year.