Indian equity benchmarks ended
the lackluster day of trade in red terrain on Tuesday with frontline gauges
breaching their crucial 33,000 (Sensex) and 10,200 (Sensex) levels, as traders
remained concerned with retail inflation accelerating more than expected in
October. Inflation quickened to 3.58 percent in the month, the fastest pace in
seven months, from 3.28 percent increase in September. Consumer inflation rise
was mainly due to an increase in prices of consumer food items. The inflation
data showed that the Consumer Food Price Index (CFPI) - an indicator for food
prices - also rose to 1.90% in October from 1.25% in September. Traders also
remained cautious with rising crude prices and tax relief on some items under
the Goods and Services Tax (GST) which is expected to threaten the government's
fiscal targets on back of possible dip in revenues. Giving hint of further
rationalization of GST rates, Finance Minister Arun Jaitley has said that there
is scope for further rationalization of GST rates and revenue buoyancy will
decide the course of rationalization. The rising crude will also prevent the
Reserve Bank of India from cutting interest rates any further. Markets tried to
recoup their losses in second half of trade but selling in dying hour of trade
dragged markets near intraday lows, as sentiments turned down-beat after
India's inflation on wholesale level picked up in the month of October due to
increase in prices of food and fuel products. According to the latest data
released by the government, the wholesale price inflation (WPI) climbed to
3.59% in October 2017 from 2.60% in September 2017 and 1.27% during the
corresponding month of the previous year. Build up inflation rate in the financial
year so far was 2.03% compared to a build up rate of 3.53% in the corresponding
period of the previous year. Investors failed to get any sense of relief with a
private report that business confidence in the country during the ongoing
quarter has improved on account of government measures, macroeconomic boost and
festive season demand, among others. The index stood at 76.7 during
October-December of 2017, an increase of 6.4% from the preceding three months.
The index, however, fell 4.1% against the corresponding three months a year
ago. Finally, the BSE Sensex declined 91.69 points or 0.28% to 32,941.87, while
the CNX Nifty was down by 38.35 points or 0.38% to 10,186.60.
The US markets closed lower on
Tuesday, with Wall Street slumping in the face of uncertainty around efforts to
overhaul tax policy and a downturn in crude-oil futures. The Dow and S&P
500 finished in negative territory for three out of the past four trading
sessions, suggesting that a run to records may be cooling somewhat, as
investors fret about tax reform and equity valuations. On the economy front,
sentiment among small-business owners rose in October as the promise of tax
reform buoyed expectations for sales and growth. The optimism tracker from the
National Federation of Independent Business rose to 103.8 from 103. In October,
four of the index's sub-gauges rose, five declined, and one was unchanged.
Separately, the producer price index rose 0.4% in October. Another measure,
known as core PPI, rose 0.2% for the third straight month. The core rate strips
out food, energy and trade margins. The Dow Jones Industrial Average lost 30.23
points or 0.13 percent to 23,409.47, the Nasdaq dropped 19.723 points or 0.29
percent to 6,737.87, and the S&P 500 edged lower by 5.97 points or 0.23
percent to 2,578.87.
Crude oil futures plunged on
Tuesday to settle near two-week lows after the International Energy Agency
(IEA) revised down its forecast for global demand growth and said it expects
U.S producers to ramp up output. The IEA cut its oil demand growth forecast by
100,000 barrels per day (bpd) for this year and 2018, to an estimated 1.5
million bpd and 1.3 million bpd, respectively, as warmer temperatures were
expected to weigh on consumption while rising output might add to glut in the
crude supplies. Traders largely overlooked the other report that that OPEC
member compliance with deal to curb output improved, rising to 96% in October
from 87% in September. Benchmark crude oil futures for December delivery ended lower
by $1.05 at $ 55.71 a barrel on the New York Mercantile Exchange. Brent crude
for January delivery was down by 1.47 percent to $62.23 a barrel on the ICE.
Indian
rupee ended flat against US dollar on Tuesday, as traders remained cautious on
the back of higher Wholesale Price Index (WPI) data. India's wholesale
inflation grew to 3.59% during October, higher from 2.6% in September, due to
increase in prices of food and fuel products. Some concern also came with data
showing that India's retail inflation accelerated to seven-month high of 3.58%
in the month of October 2017, as compared to 3.28% in September 2017, due to an
increase in prices of consumer food items. However, the domestic currency
recovered from initial losses, taking support from a private report that India
is likely to achieve strong growth over the next decade and will overtake Japan
in nominal GDP by 2028, to emerge as the world's third largest economy. On the
global front, Pound slumped against dollar on Tuesday after October inflation
data showed price pressures stalling in the UK, easing pressure on Bank of
England policymakers for further interest rate hikes. Finally, the rupee ended
unchanged from its previous close of 65.42 on Monday.
The FIIs as per Tuesday's data
were net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 4632.82 crore against gross selling of Rs 4768.55 crore, while
in the debt segment, the gross purchase was of Rs 2263.31 crore with gross
sales of Rs 2648.67 crore.
The US markets despite coming off
their worst level of the day ended in red in the last session on lingering
uncertainty about the outlook for the Republican tax reform proposal, as the
House prepares to vote on their bill later this week. The Asian markets have
made mostly a soft start and some of the indices are down by over half a
percent as concern grows that stocks have become too expensive amid uncertainty
about US tax reform. Signs of an oversupply in commodities have led to fall in
the commodities stocks in the region. The Indian markets continued their slide
and lost over a quarter percent in the last session, traders were concerned
with likely fiscal slippages on rising crude prices and upward pressure on both
consumer and wholesale inflation. Today, the start is likely to remain weak and
the sluggishness will extend amid negative global cues. On the domestic front
traders will be concerned with trade deficit widening to its highest in nearly
three years in October, as export growth contracted for the first time after
more than a year. The trade deficit widened to $14.02 billion last month from
$8.98 billion in September. Merchandise exports for October fell 1.12 percent
from a year earlier to $23.1 billion, dropping for the first time since August
2016. There will be buzz in the market with report that government could be
looking to come out with detailed anti-profiteering guidelines. The broad idea
is to prescribe a methodology to ascertain whether companies are passing on GST
reductions and benefits derived from input tax credits to consumers. The realty
sector stocks will see some action with industry body Assocham stating that if
the real estate sector is brought within the ambit of GST, it should be along
with the stamp duty and moderate rate, and should not add to the cost of
housing and construction. There will be lots of important earnings
announcements to keep the markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10186.60
|
10158.77
|
10231.22
|
BSE Sensex
|
32941.87
|
32857.14
|
33076.58
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
Bharti Infratel
|
1,313.35
|
396.95
|
390.17
|
405.07
|
SBI
|
256.47
|
329.10
|
326.17
|
333.37
|
ICICI Bank
|
123.62
|
314.10
|
310.23
|
317.53
|
Axis Bank
|
106.45
|
545.65
|
535.52
|
552.87
|
Yes Bank
|
97.24
|
302.55
|
300.92
|
305.27
|
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