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NSE Intra-day chart (15 November 2019)
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Market Commentary 18 November 2019
Benchmarks to get a slightly negative start amid mixed Asian cues

 

Indian equity benchmarks wiped out most of their intraday gains to end marginally in green on Friday, tracking a firm trend in global peers. Trading for the day began on a firm note, as traders took 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 also took 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. The market breadth remained optimistic with Prime Minister Narendra Modi's statement that despite recession at the global level, BRICS countries accelerated economic growth, drove millions out of poverty and achieved new breakthroughs in technology and innovation. Adding some solace, Union Minister Pratap Chandra Sarangi said that the MSME sector plays a crucial role in achieving the Centre's target of making the country $5 trillion economy. He said the MSME sector is the largest employment generator after agriculture in the country. However, in dying hour of trade, key indices gave up most of their gains to come off their intraday high points, as market-men got anxious 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. Finally, the BSE Sensex rose 70.21 points or 0.17% to 40,356.69, while the CNX Nifty was up by 23.35 points or 0.20% to 11,895.45.

 

The US markets settled at fresh record highs on Friday on revived hopes for a US - China trade deal despite mixed economic data. White House economic adviser Larry Kudlow said Thursday that US and Chinese negotiators are in contact every single day and are getting close to a phase one trade deal. He said It's not done yet, but there has been very good progress and the talks have been very constructive. In an appearance on the Fox Business Network on Friday, Commerce Secretary Wilbur Ross said the talks are down to the last details and a deal will be completed in all likelihood. Adding optimism among market participants, China has lifted a nearly five-year ban on imports of US poultry in a goodwill gesture that could lead to more than $1 billion in annual shipments to China. Traders also reacted positively to a report from the Commerce Department showing US retail sales rebounded by slightly more than expected in the month of October. The Commerce Department said retail sales climbed by 0.3 percent in October, reversing the 0.3 percent drop in September. Street had expected retail sales to rise by 0.2 percent. Excluding a rebound in auto sales, the report said retail sales rose by 0.2 percent in October after edging down by 0.1 percent in September. Ex-auto sales had been expected to increase by 0.4 percent. Meanwhile, traders shrugged off a report from the Federal Reserve showing a steep drop in industrial production in October, as the decrease was partly due to the since-resolved strike at General Motors (GM).

 

Crude oil futures recoup early losses and ended higher on Friday as renewed optimism about a potential US-China trade deal and hopes the Organization of the Petroleum Exporting Countries (OPEC) might decide to deepen their supply cuts in the coming year helped ease concerns about outlook for energy demand. Up move also supported by a report from Baker Hughes that showed another oil rigs count in the US dropped for a fourth straight week. Data released by Baker Hughes shows the number of active US rigs drilling for oil declined by 10 to 674 this week. The total rig count has fallen by 11 to 806, according to Baker Hughes. Benchmark crude oil futures for December jumped 95 cents or 1.7 percent to settle at $57.72 a barrel on the New York Mercantile Exchange. January Brent rose $1.02 or 1.6 percent to settle at $63.30 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended stronger against dollar on Friday, owing to dollar sale by exporters and banks. This was the second day of consecutive gains for the domestic currency. Sentiments remained up-beat with Prime Minister Narendra Modi's statement that despite recession at the global level, BRICS countries accelerated economic growth, drove millions out of poverty and achieved new breakthroughs in technology and innovation. Some comfort also came with Union Minister Pratap Chandra Sarangi's statement that the MSME sector plays a crucial role in achieving the Centre's target of making the country $5 trillion economy. Besides, positive trend in equity market supported the rupee. On the global front, dollar edged higher on Friday, as fresh signs of a global economic slowdown and little visible progress toward a Sino-US trade truce put investors in a risk-averse mood. Finally, the rupee ended at 71.78, 18 paise stronger from its previous close of 71.96 on Thursday.

 

The FIIs as per Friday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 5032.27 crore against gross selling of Rs 5463.30 crore, while in the debt segment, the gross purchase was of Rs 752.35 crore with gross sales of Rs 855.13 crore. Besides in the hybrid segment, the gross buying was of Rs 13.60 crore against gross selling of Rs 13.30 crore.

 

The US markets ended higher on Friday as upbeat comments from the White House on trade talks buoyed investor optimism. Asian markets are trading mixed on Monday as jaded investors awaited real evidence on progress in the US-China trade dispute, though sentiments found support from another record close on Wall Street. Indian markets ended higher on Friday led by gains in banking, telecom and metal stocks. Today, the start of session is likely to be marginally in red amid mixed cues from Asian peers and concern over economic growth. Economic think-tank NCAER said that the country's GDP growth is likely to decline to 4.9 per cent in the second quarter of this fiscal due to sustained slowdown in virtually all the sectors. Traders will be concerned with the government data showing that India's exports dipped by 1.11 percent to $26.38 billion in October on account of contraction in sectors like petroleum and leather. Imports too declined by 16.31 percent to $37.39 billion, narrowing trade deficit to $11 billion in October. There will be some cautiousness with Finance Minister Nirmala Sitharaman's statement that no welfare schemes will be curtailed despite low revenues and she expected GST numbers for November to be good. However, some support may come later in the day with report that FPIs pumped in a net sum of Rs 19,203 crore into the domestic capital markets in the first half of November amid encouraging domestic and global factors. Besides, as per the RBI's data Foreign exchange reserves continued their upward march surging $1.710 billion to touch a new high of $447.81 billion in the week to November 8. Traders may take note of that in a bid to ease the flow of foreign funds into legitimate business activities, the government may soon ease restrictions on foreign direct investment (FDI) by joint ventures (JVs) or wholly-owned subsidiaries (WOS) of an Indian company without categorising such investments as suspect involving round tripping of funds. There will be some buzz in the MSME stocks with Union MSME and Road Transport Minister Nitin Gadkari's statement that the government is working on two policies to increase MSME exports and bring down imports by encouraging local production. There will be some reaction in telecom stocks with Finance Minister Nirmala Sitharaman's statement that the government intends to address the concerns of the crisis-ridden telecom companies which are facing billions of dollars of fresh statutory liability following a recent Supreme Court ruling.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,895.45

11,858.58

11,952.98

BSE Sensex

40,356.69

40,226.50

40,568.47

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

1,295.26

68.70

67.93

69.83

SBI

952.00

321.90

313.40

327.05

Bharti Airtel

551.74

393.05

367.37

408.62

ICICI Bank

420.75

499.85

494.00

507.70

Tata Motors

296.15

168.55

166.13

172.18

 

  • TCS has expanded its partnership with Cardinal Health to transform its IT operating model toward a product-centric IT organization. 
  • Bajaj Auto is planning to share its e-scooter platform with KTM and Husqvarna. 
  • SBI has received an approval for divestment of its stake in SBI Cards up to 4% through IPO by way of offer for sale of up to 3,72,93,371 equity shares. 
  • ITC's fragrance brand -- Engage has unveiled new range of fragrances through a new campaign that features its new brand ambassadors - Bollywood actors Kartik Aaryan and Tara Sutaria.
News Analysis