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NSE Intra-day chart (10 January 2020)
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Market Commentary 13 January 2020
Markets to open in green tracking Asian peers; CPI data eyed

 

Indian equities ended the last trading day of the week in green terrain. After a positive start, indices remained in gaining mood during first half of session, aided with Prime Minister Narendra Modi's statement that fundamentals of the Indian economy are strong and it has the capacity to bounce back. The street remained optimistic, after the Commerce and Industry Ministry examined revamping of the Special Economic Zone (SEZ) policy to meet the global challenges being faced by Indian exporters. It has also discussed ways for implementation of the remaining recommendations of Baba Kalyani report on SEZ to facilitate ease of doing business in the present global market scenario. In the second half of the trading session, gains got trimmed over Dalal Street, as American economist Nouriel Roubini said that the Indian government has chosen to focus on ideological considerations rather than economic slowdown. He also warned that there can be a loss of popularity if the economy goes down. However, bourses managed to settle higher, tracking firm global markets. Market participants were seen taking a note of Chairman of high-level panel on doubling farmers income, Ashok Dalwai's statement that the farm policies need to be reoriented to first ensure income security to farmers and later make them businessmen. Finally, the BSE Sensex gained 147.37 points or 0.36% to 41,599.72, while the CNX Nifty was up by 40.90 points or 0.33% to 12,256.80.

 

The US markets ended in red on Friday, after closing the previous two sessions higher, with the Labor Department releasing a report that showed the pace of job growth slowed by more than expected in the month of December. The report said non-farm payroll employment climbed by 145,000 jobs in December after spiking by a revised 256,000 in November. Street had expected employment to increase by about 164,000 jobs compared to the jump of 266,000 jobs originally reported for the previous month. The Labor Department said notable job gains occurred in the retail trade and healthcare sectors, while mining lost jobs. Besides, some cautiousness prevailed in the markets on report that an announcement by the Trump administration of fresh economic sanctions on Iran, following an attack on US military facilities in Iraq that was in retaliation for the killing of a top Iranian general by US forces last week. The sanctions target eight senior Iranian regime officials as well as the nation's steel, aluminum, copper and iron industries. However, losses remained capped on report that a Chinese delegation is expected to arrive in Washington on Monday to complete a phase-one trade agreement with the US, which has arguably been the most influential driver of stock moves for more than a year. President Donald Trump said he wants a partial trade deal signed by January 15 or shortly thereafter.

 

Crude oil futures settled lower on Friday amid easing tensions in the Middle East. In a significant development, the US House of Representatives approved a resolution that would force President Trump to seek consent from Congress before taking new military action against Iran. Besides, a somewhat disappointing monthly non-farm payroll data from the US Labor Department contributed a bit to oil prices' decline. Crude oil futures for February dropped 52 cents or 0.9 percent to settle at $59.04 a barrel on the New York Mercantile Exchange. March Brent declined 39 cents or 0.6 percent to settle at $64.98 a barrel on London's Intercontinental Exchange.

 

Indian rupee continued its upward momentum for the fourth day on Friday on persistent selling of the American currency by exporters. Sentiments got up-beat with Prime Minister Narendra Modi's statement that fundamentals of the Indian economy are strong and it has the capacity to bounce back. Adding to the optimism, the Commerce and Industry Ministry examined revamping of the Special Economic Zone (SEZ) policy to meet the global challenges being faced by Indian exporters. It has also discussed ways for implementation of the remaining recommendations of Baba Kalyani report on SEZ to facilitate ease of doing business in the present global market scenario. However, there was some cautiousness too ahead of Index of Industrial Production (IIP) data for November due out later in the day. On the global front, U.S. dollar rose on Friday, as dissipating geopolitical tension prompted investors to buy riskier currencies. Finally, the rupee ended at 70.94, 27 paise stronger from its previous close of 71.21 on Thursday.

 

The FIIs as per Friday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 5291.23 crore against gross selling of Rs 5134.72 crore, while in the debt segment, the gross purchase was of Rs 2048.46 crore with gross sales of Rs 1951.80 crore. Besides, in the hybrid segment, the gross buying was nil against gross selling of Rs 50.68 crore.

 

The US markets ended lower on Friday after hiring data fell short of estimates and wage growth was the weakest in more than a year. Asian markets are trading mostly in green on Monday ahead of the expected signing on a Sino-US trade deal, though talks on a phase two package are likely to drag on for month. Indian markets ended higher for second straight session on Friday mirroring optimism in world equities, as easing tensions between the US-Iran relieved investors. Today, the start of new week is likely to be positive tracking Asian peers coupled with growth in India's industrial production data. A rebound in manufacturing activity pulled up November's overall industrial output, helping it to grow 1.8% after declining for three consecutive months. Output had declined by 3.8% in October after a 4.3% contraction in September, the steepest fall in eight years. Investors will be looking ahead to the retail inflation or consumer price index (CPI) data to be out later in the day. Though, there may be some concern with report that adopting a cautious approach amid the US-Iran tensions, foreign portfolio investors have pulled out a net sum of Rs 2,415 crore from the Indian capital markets in January so far. As per latest depositories data, FPIs invested a net amount of Rs 777 crore in equities and pulled out Rs 3,192.7 crore from the debt segment between January 1-10. Traders may take note of report that the government is likely to opt for auctioning of more cash management bills (CMBs) to meet the debt obligations of government bonds in the next fiscal standing at Rs 3.02 lakh crore to avoid putting pressure on higher borrowings from the market. There will be some cautiousness as the Reserve Bank of India tweaks norms for imposing penalties on payment system operators for not complying with regulatory requirements, with a view to ensure safety and security to various stakeholders, including customers. There will be some buzz in the auto stocks as Automobile industry body SIAM (Society of Indian Automobile Manufacturers) predicted the prices of BSVI vehicles to rise up to 10%. Insurance stocks will be in focus with report that Finance minister Nirmala Sitharaman may announce second-round capital infusion for public sector general insurance companies in the upcoming Budget to improve their financial health. There will be some reaction in power stocks with report that State-run electricity distribution companies' (discoms) dues to power producers stood at Rs 80,930 crore at the end of November 2019, up 45% from a year earlier. Also, there will be some earnings announcements too to keep the markets buzzing.

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

12,256.80

12,209.60

12,307.60

BSE Sensex

41,599.72

41,439.98

41,767.29

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

3,030.72

44.75

42.92

47.47

Tata Motors

602.52

196.35

191.23

200.23

SBI

423.78

332.25

327.58

337.43

Bharti Airtel

370.30

457.00

452.15

463.90

Vedanta

209.96

159.95

157.27

162.97

 

  • HDFC Bank has launched a value-added service for religious bodies, societies, clubs and cities.  
  • Tata Motors is planning to start roll-out of over 100 BS-VI compliant models, including passenger vehicles in January 2019. 
  • HDFC has completed the acquisition of majority stake in Apollo Munich Health Insurance for Rs 1,495.81 crore. 
  • GAIL (India) has opened its 4th round of applications for Solicitation of Investment Proposals from Start-Ups operating in the area of renewable and alternate energy sources.
News Analysis