Indian markets made a nervous
start to the week as the benchmarks plummeted over half a percent, as investors
took profits off the table ahead of IIP and inflation data due later in the
day. Sentiments remained dismal, as the State Bank of India expressed concern
that demonetisation, announced in November 2016, may continue to result in
slowing down of the economy, and adversely affect its business. It said that
the long-term impact of this move on the Indian economy and the banking sector
is uncertain. Besides, weak global cues coupled with depreciation in Indian
rupee against the dollar too weighed down sentiments. The frontline indices
shaved off over half percent and breached 31,100 (Sensex) and 9,650 (Nifty)
levels on the downside. The broader markets too mirrored their larger peers and
drifted to lower levels to snap the day on a pessimistic note. Some concerns
also came after government of Maharashtra on Sunday announced a loan waiver for
farmers and decided to form a committee to decide the criteria of debt relief.
The loan waiver of around Rs 30,000 crore will affect the state fiscal and
'impact the credit discipline' among borrowers. Further, market participants
failed to get any sense of relief with the report that the southwest monsoon is
making a steady advance into Maharashtra & West Bengal and the weatherman
has predicted a good week ahead. India Meteorological Department Director
General KJ Ramesh said monsoon is in an active phase and has reached Mumbai,
Mahabaleshwar (in Maharashtra) and several parts of the Konkan region, apart
from Bijapur district in north Karnataka. Finally, the BSE Sensex declined
166.36 points or 0.53% to 31095.70, while the CNX Nifty was down by 51.85
points or 0.54% to 9,616.40.
The US markets closed lower on
Monday, for the second straight session of firm losses in technology shares,
but the shift away from tech appears to be feeding recently unloved sectors and
smaller-cap stocks. US inflation expectations tumbled last month, with one key
measure hitting its lowest level since early 2016, according to a Federal
Reserve Bank of New York survey that could amplify the central bank's concern
over a broad slump in prices. The survey of consumer expectations, an
increasingly valuable gauge for the Fed, showed that median three-year-ahead
inflation expectations fell to 2.47 percent last month, from 2.91 percent in
April. That brought the measure to a 16-month low after it had hovered near a
record high the last six months. On the economy front, the federal government
ran a budget deficit of $88 billion in May, up from $53 billion in the same
month a year ago. Spending was $329 billion in the month, compared to $277
billion in May 2016. Receipts for May were $240 billion, up from $225 billion a
year ago. The Treasury said that the monthly deficit would have been much
narrower if not for one additional Wednesday in May 2017 and a shift of timing
in benefit payments. The Dow Jones Industrial Average lost 36.3 points or 0.17
percent to 21,235.67, Nasdaq was down 32.45 points or 0.52 percent to 6,175.47,
while S&P 500 edged lower by 2.38 points or 0.10 percent to 2,429.39.
Crude oil futures extended their
gains on Monday, trimming some of last week's losses despite further signs of
robust U.S. production. Prices got a boost after, after Saudi Arabia and Russia
attempted to quell investor fears concerning the glut in supply, insisting that
declines in inventories will accelerate over the near term. Meanwhile, Energy
Information Administration (EIA) in its latest monthly release said that oil
production from the biggest US shale fields will rise by 127,000 barrels a day
to 5.475 million barrels a day in July from June. Surging US production has
offset production quotas from OPEC and Russia this year. Benchmark crude oil
futures for July delivery ended higher by $0.25 or 0.6 percent to $46.08 on the
New York Mercantile Exchange. In London, Brent crude for July delivery ended up
by $ 0.34 to $48.49 on the ICE.
Indian
rupee depreciated against the US dollar on Monday, due to fresh demand for the
American currency from banks and importers. Investors' maintained cautious
approach ahead of key macro data - index of industrial production (IIP) for
April and consumer price index-based inflation for May scheduled to be released
later in the day. Sentiments also remained dampened, as the State Bank of India
has expressed concern that demonetisation, announced in November 2016, may
continue to result in slowing down of the economy, and adversely affect its
business. Besides, dollar strengthened against other currencies overseas along
with losses in the domestic equity market too weighed on the rupee sentiments.
Finally, the rupee ended at 64.44, 19 paise weaker from its previous close of
64.25 on Friday.
The
FIIs as per Monday'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
4044.54 crore against gross selling of Rs 4113.59 crore, while in the debt
segment, the gross purchase was of Rs 4965.25 crore with gross sales of Rs 1456.21
crore.
The US markets despite coming off
the day's low ended modestly in red in the last session, tech-heavy Nasdaq
continued underperforming its counterparts, pulling back further off the record
closing high set last week. The overall weakness was partly contributed by
profit taking, with traders cashing in on some of the recent strength in the
markets. The Asian markets have once again made a mixed start, though some of
the indices are recovering, as selloff in technology shares showed signs of
easing. The Indian markets after a weak start remained below the neutral line
throughout the day in last session and ended with cut of around half a percent.
Today, the start is likely to be in green on signs of recovery in the global
markets and on getting double dose of good macro data. India's industrial
production grew by 3.1 percent in April due to good performance of electricity,
mining and manufacturing sectors, while retail inflation fell to a record low
of 2.18 percent in May, as prices of kitchen staples like vegetables and pulses
declined sharply. However, there will be some cautiousness from the global
front as the US Federal Reserve's two-day rate-setting meeting kicks off later
today. While the Fed is widely expected to hike the policy rate this time,
markets will also keenly watch its communication on US economic growth and
future rate hike trajectory. There will
be buzz in the banking sector stocks, as the government and the RBI on Monday
indicated that they will step up efforts to clean up bank books that are
saddled with record non-performing assets (NPAs), including through the
National Infrastructure Investment Fund (NIIF). Meanwhile, Finance Minister
Arun Jaitley has said the union government will not partake in state's fiscal
leverage in waiving farm loans and made it clear that the cost has to be borne
by them.
Support and Resistance: NSE
(Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9616.40
|
9594.25
|
9642.80
|
BSE Sensex
|
31095.70
|
31018.18
|
31199.33
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
Vedanta
|
139.80
|
245.10
|
242.10
|
248.50
|
Bank of Baroda
|
107.80
|
168.05
|
165.47
|
172.07
|
SBI
|
103.27
|
284.95
|
283.83
|
286.53
|
ICICI Bank
|
94.34
|
315.75
|
313.50
|
319.35
|
Sun Pharma
|
76.34
|
532.55
|
522.67
|
541.67
|
YES Bank has entered into partnership with Entrepreneurship education and incubator, Entrepreneurship Development Institute of India to fund start-ups supported by the institution.
SBI is all set to launch a planned share sale of as much as $2.3 billion as early as this week to raise funds from institutional investors.
HDFC is planning to raise Rs 1,500 crore through issuance of bonds on a private placement basis.
Tata Motors' subsidiary -- Jaguar Land Rover has invested $25 million in US ride-hailing company Lyft as part of a partnership that includes development and testing of autonomous cars.