Snapping their ten-day gaining
streak, Indian equity benchmarks came under selling pressure on Thursday and
ended with losses of more than two percent, on account of sustained selling in
frontline line blue-chip stocks amid weak cues from global markets. After a
slightly positive opening, the domestic bourses soon slipped into negative
terrain, as traders turned cautious with Chief Economic Adviser K V
Subramanian's statement that there will be a temporary impact on investment
flow to start-ups due to the curbs imposed by the government to stop
opportunistic takeover by firms from countries with which India has border
tensions. Traders also remain concerned with the International Monetary Fund
(IMF) stating that India's public debt ratio, which remarkably remained stable
at around 70 per cent of the GDP since 1991, is likely to jump by 17 percentage
points to nearly 90 per cent because of increase in public spending due to
COVID-19. Director of the IMF's Fiscal Affairs Department said in our
projections, the increase in public spending, in response to COVID-19, and the
fall in tax revenues and economic activity, will make public debt jump up by 17
percentage points to almost 90 per cent of GDP. The selling intensified during
the second half of the session to end near day's low point, as sentiments
weakened further with World Bank President David Malpass' statement that the
world is experiencing one of the deepest recessions since the Great Depression
in the 1930s owing to the novel coronavirus. He also termed the COVID-19
pandemic a catastrophic event for many developing and the poorest countries. He
also said that given the extent of the economic contraction, there was a rising
risk of disruptive debt crises in countries. Market participants also took a
note of Finance Minister Nirmala Sitharaman's statement that the International
Monetary Fund's (IMF) debt restructuring programme should aim at helping the
countries overcome the fiscal stress caused by the coronavirus pandemic. She
said it would be important to take into consideration the circumstances and
concerns of both creditors and debtors and that in the process of debt
restructuring, care must be taken to not saddle the debtor countries with overly
burdensome conditionalities. Finally, the BSE Sensex fell 1066.33 points or
2.61% to 39,728.41, while the CNX Nifty was down by 290.70 points or 2.43% to
11,680.35.
The US markets ended lower on
Thursday amid uncertainty about a new stimulus bill after Treasury Secretary
Steven Mnuchin suggested that a new relief package is not likely to pass before
next month's elections. Senate Majority Leader Mitch McConnell has also cast
doubts on whether a bill can pass before the elections and recently announced
plans to vote on a more limited relief package. Further, sentiments were also
weak as rising coronavirus cases, especially in Europe, resulted in new
restrictions on businesses and travel. Besides, Selling pressure was also
generated in reaction to a Labor Department report showing an unexpected
increase in first-time claims for US unemployment benefits in the week ended
October 10th. The report said initial jobless claims climbed to 898,000, an
increase of 53,000 from the previous week's revised level of 845,000. Street
had expected jobless claims to edge down to 825,000 from the 840,000 originally
reported for the previous week. Meanwhile, growth in New York manufacturing
activity slowed by more than expected in the month of October, the Federal
Reserve Bank of New York revealed in a report. The New York Fed said its
general business conditions index slid to 10.5 in October from 17.0 in
September. While a positive reading still indicates growth in regional
manufacturing activity, street had expected the index to show a much more
modest drop to 15.0. The bigger than expected decrease by the headline index
came even though the new orders index climbed to 12.3 in October from 7.1 in
September and the shipments index rose to 17.8 from 14.1. The number of
employees index also increased to 7.2 in October from 2.6 in September,
indicating an acceleration in the pace of job growth. The report also said the
prices paid index crept up to 27.8 in October from 25.2 in September, while the
prices edged down to 5.3 from 6.5.
Crude oil futures ended
marginally lower on Thursday as rising COVID-19 infections led to renewed
restrictions on movement in several European countries, raising concerns over a
further slowdown in energy demand. However, downside remained capped after US
government data showed a better-than-expected weekly decline in domestic crude
supplies. The Energy Information
Administration reported that US crude inventories fell by 3.8 million barrels
for the week ended October 9. The data, which was delayed by a day because of
Monday's US federal holiday, followed a 500,000-barrel increase in the previous
week. Crude oil futures for November fell 8 cents or 0.2 percent to settle at $40.96
a barrel on the New York Mercantile Exchange. December Brent crude declined 16
cents or 0.4 percent to settle at $43.16 a barrel on London's Intercontinental
Exchange.
Indian rupee ended lower against
dollar on Thursday, on account of sustained dollar demand from importers and
banks. Traders were concerned with International Monetary Fund (IMF) statement
that India's public debt ratio, which remarkably remained stable at around 70
per cent of the GDP since 1991, is likely to jump by 17 percentage points to
nearly 90 per cent because of increase in public spending due to COVID-19.
Director of the IMF's Fiscal Affairs Department said in our projections, the
increase in public spending, in response to COVID-19, and the fall in tax
revenues and economic activity, will make public debt jump up by 17 percentage
points to almost 90 per cent of GDP. However, weakness in domestic equity
markets also put pressure on Indian currency. On the global front, Sterling
struggled to cling on to the $1.30 level on Thursday as traders waited to see
whether a meeting of European Union leaders in Brussels would signal any
progress in troubled Brexit talks with Britain. Finally, the rupee ended at
73.36, 5 paise weaker from its previous close of 73.31 on Wednesday.
The FIIs as per Thursday's data
were net buyers in equity segment, while net seller in debt segment. In equity
segment, the gross buying was of Rs 7132.17 crore against gross selling of Rs
5983.04 crore, while in the debt segment, the gross purchase was of Rs 964.88
crore with gross sales of Rs 968.75 crore. Besides, in the hybrid segment, the
gross buying was of Rs 16.09 crore against gross selling of Rs 21.37 crore.
The US markets ended lower on
Thursday amid uncertainty about a new stimulus bill after Treasury Secretary
Steven Mnuchin suggested on Wednesday that a new relief package is not likely
to pass before next month's elections. Asian markets are trading mixed on
Friday as investors assess fresh restrictions in various parts of Europe amid a
resurgence in Covid-19 cases. Indian markets ended sharply lower on Thursday,
snapping gains after 10 straight sessions, amid a selloff in all key sectors.
Today, markets are likely to open in green on short-covering after a sharp fall
in the previous session. Some encouragement will come with union health
minister Harsh Vardhan's statement that India is expected to have a COVID-19
vaccine in a few months and the country should be in the process of delivering
it to people in the next six months. Some support will also come with the
government data showing that India's exports increased 5.99 percent
year-on-year to $27.58 billion in September. Exports stood at $26.02 billion in
September 2019. The country's imports declined 19.6 percent to $30.31 billion
in September. It was $37.69 billion in the same month last year. The trade
deficit in September was $2.72 billion, compared to $11.67 billion in the
year-ago month. Though, rising coronavirus cases may dampen sentiments in the
markets. India on Thursday registered a spike of 60,365 cases, taking the total
count to 7,365,435, and the death toll reached 112,144. Traders may take note
of Moody's Investors Service's statement that the government's second round of
stimulus will spur consumer spending in the near term but support to economic
growth will be minimal. Apparel industry stocks will be in focus with ICRA's
report that Indian apparel exporters are likely to see a decline of 20-25 per
cent in their turnover in 2020-21, while those focused on domestic market are
expected to witness a 30-40 per cent decline in revenue due to the COVID-19
pandemic. There will be some reaction in real estate sector stocks with a
private report that private equity (PE) investment in Indian real estate fell
57 per cent year-on-year to around $2.3 billion during January-September this
year as investors remained cautious due to COVID-19 pandemic. 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
|
11,680.35
|
11,552.61
|
11,916.76
|
BSE
Sensex
|
39,728.41
|
39,247.91
|
40,628.49
|
Nifty Top volumes
Stock
|
Volume
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
(in
Lacs)
|
Tata
Motors
|
640.05
|
126.95
|
124.19
|
132.04
|
State
Bank of India
|
491.85
|
192.85
|
189.06
|
199.56
|
Infosys
|
442.89
|
1,108.25
|
1,071.84
|
1,165.34
|
Wipro
|
389.62
|
341.60
|
335.61
|
350.91
|
ICICI
Bank
|
342.39
|
391.00
|
383.46
|
404.21
|
Infosys is planning to roll out salary hikes and promotions across all levels effective January 1, 2020.
Reliance Industries' subsidiary company -- Reliance Retail Ventures has received the subscription amount of Rs 5,550 crore from Alyssum Asia Holdings II Pte.
M&M has introduced new features of Android Auto and Car Play in the top-end variants of its popular SUV Scorpio.
Tata Motors' wholly owned subsidiary -- Jaguar Land Rover has launched its iconic SUV Defender in the country with price starting at Rs 73.98 lakh (ex-showroom).