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NSE Intra-day chart (14 November 2019)
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Market Commentary 15 November 2019
Benchmarks to make a positive start tracking Asian peers

 

Reversing their losses, Indian equity bourses ended Thursday's trading session on higher note. Markets made a flat start of the day, after India's retail inflation based on Consumer Price Index quickened to 16-month high of 4.62% in October from 3.99% in September 2019, on the back of higher food prices. Volatility witnessed over the street, as Moody's Investors Service cut India's economic growth forecast for current year to 5.6 per cent from 5.8 per cent estimated earlier, saying GDP slowdown is lasting longer than previously expected. It expected economic activity to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent, respectively, but the pace to remain lower than in the recent past. However, in the last hours of the trade, key indices staged smart recovery, amid reports that India's Wholesale price index (WPI) inflation again eased to 0.16% in the month of October 2019 as against 0.33% for the previous month and 5.54% during the corresponding month of the previous year. Investors took some support with SBI report showing that credit growth picked up rapid pace beginning September - jumping by Rs 1.08 lakh crore - mainly helped by housing, NBFC and lately MSME. The report further said the week up to Diwali has shown an increase in currency in circulation of Rs 30,871 crore from the previous week, thereby showing that people have been demanding cash in the festive season. Finally, the BSE Sensex rose 170.42 points or 0.42% to 40,286.48, while the CNX Nifty was up by 31.65 points or 0.27% to 11,872.10.

 

The US markets ended mostly lower on Thursday on persisting worries around US-China trade relations. Further, declines in Cisco Systems and Walmart also tempered the excitement around markets. The prospect of a US - China trade deal remains the main factor sustaining a rally that has pushed US stocks record highs in the past five weeks. Trump administration officials are frustrated that China has not offered enough concessions to justify a reduction in US tariffs on Chinese goods, a longstanding demand from Beijing that has become further entrenched in recent weeks. Earlier, the Chinese Commerce Ministry said the US and China were holding in-depth discussion on the partial trade agreement, emphasizing that the cancellation of tariffs was important to concluding a deal. However, Trump administration officials confirmed China has ended a ban on American chicken, paving the way for the US to export more than $1 billion in poultry and poultry parts to the Asian country. On the economic data front, after reporting an unexpected decrease in producer prices in the previous month, the Labor Department released a report showing US producer prices rebounded by slightly more than anticipated in the month of October. The Labor Department said its producer price index for final demand climbed by 0.4 percent in October after falling by 0.3 percent in September. Street had expected producer prices to rise by 0.3 percent. Besides, a report released by the Labor Department showed first-time claims for US unemployment benefits increased by much more than expected in the week ended November 9. The report said initial jobless claims climbed to 225,000, an increase of 14,000 from the previous week's unrevised level of 211,000. Street had expected jobless claims to inch up to 215,000.

 

Crude oil futures ended lower on Thursday after US government report revealed that domestic crude inventories rose for third straight week. The Energy Information Administration (EIA) reported that US crude supplies rose by 2.2 million barrels for the week ended November 8. The data came out a day later than usual because of Monday's Veterans Day holiday. Crude supplies were forecast to increase by 1 million barrel. The American Petroleum Institute on Wednesday reported a decline of 541,000 barrels. Besides, the EIA data showed a supply increase of 1.9 million barrels for gasoline, but distillate stocks fell by 2.5 million barrels. Benchmark crude oil futures for December fell 35 cents or 0.6 percent to settle at $56.77 a barrel on the New York Mercantile Exchange. January Brent lost 9 cents or 0.1 percent to settle at $62.28 a barrel on London's Intercontinental Exchange.

 

Snapping three day falling streak, Indian rupee staged a smart recovery against dollar on Thursday, following heavy dollar selling from banks and exporters. Sentiments turned optimistic with reports that India's Wholesale price index (WPI) inflation again eased to 0.16% in the month of October 2019 as against 0.33% for the previous month and 5.54% during the corresponding month of the previous year. Traders overlooked Moody's Investors Service report stating that it cut India's economic growth forecast for current year to 5.6 per cent from 5.8 per cent estimated earlier, saying GDP slowdown is lasting longer than previously expected.  On the global front, pound was flat against the euro and dollar on Thursday as investors await signs of how next month's general election could play out. Finally, the rupee ended at 71.96, 13 paise stronger from its previous close of 72.09 on Wednesday.

 

The FIIs as per Thursday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 7989.83 crore against gross selling of Rs 6470.96 crore, while in the debt segment, the gross purchase was of Rs 505.46 crore with gross sales of Rs 1483.08 crore. Besides, in the hybrid segment, the gross buying was of Rs 30.87 crore against gross selling of Rs 17.90 crore.

 

The US markets ended mostly in red Thursday after Cisco's dour forecast raised worries of a global economic slowdown and overshadowed strong results from big box retailer Walmart. Asian markets are trading mostly higher on Friday as traders awaited further updates on a partial US-China trade deal. Indian markets ended volatile session in green territory on Thursday helped by fag-end buying in mainly banking and IT stocks and easing wholesale inflation. Today, the markets are likely to make positive start tracking Asian peers. Traders will be taking encouragement with report that even after the flurry of sops given to various industries after the budget, Union MSME Minister Nitin Gadkari has said the government will create a special financial scheme for 10 industry segments which are import-driven. He said the government has created a scheme to support industries where imports are high by providing special financial assistance. Traders may take note that in a relief to taxpayers, the government extended the due dates for filing GST annual returns for 2017-18 to December 31 and for the financial year 2018-19, to March 31 next year. The dates for filing the reconciliation statement has also been extended accordingly. In another relief, it has also decided to simplify the two GST forms by making various fields of these forms as optional. Market participants may take note of report that the government has so far mopped up Rs 6 lakh crore or less than 50 percent of the total tax collection target of Rs 13.35 lakh crore for the current fiscal. However, there may be some cautiousness with SBI research report stating that surplus rainfall in August and September is likely to keep food and vegetable prices elevated going forward, and retail inflation may average at around 4 per cent in FY20. Meanwhile, in order to streamline the process, markets regulator SEBI has categorized modifications in futures contract specifications pertaining to quality parameters for commodity derivatives. Telecom stocks will be in focus after Bharti Airtel and Vodafone Idea posted record losses in the September quarter, ravaged by an unfavorable Supreme Court verdict on adjusted gross revenues. There will be some reaction in leather industry related stocks with Council for Leather Exports' (CLE) statement that the ongoing US-China trade war provides huge opportunities to leather exporters to increase their shipments to America. It added that the sector's exports grew about seven per cent to the US in the past four months.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,872.10

11,817.95

11,910.95

BSE Sensex

40,286.48

40,092.78

40,414.40

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

1,951.15

68.75

66.97

70.67

SBI

436.18

306.00

300.63

310.43

ICICI Bank

353.96

498.65

488.32

504.42

Vedanta

260.65

144.00

141.00

148.75

Tata Motors

254.33

167.05

164.93

169.73

 

  • Wipro has partnered with Telecom Infra Project to drive 5G adoption in the global communications service provider and enterprise markets. 
  • Tata Motors' board has approved the pricing and tenure of $300 million fund raise, through bonds to be issued later this month. 
  • ITC has entered into Share Subscription Agreement and Shareholders' Agreement to acquire up to 33.42% of the share capital of Delectable Technologies. 
  • Tech Mahindra has entered into a partnership with Mahindra TEQO to create digital solutions for the global renewable energy industry.
News Analysis