Tuesday turned-out to be a
disappointing day of trade for Indian equity benchmarks with frontline gauges
ending near intraday low levels, breaching their crucial 37,300 (Sensex) and
11,300 (Nifty) mark. Markets started the session with cautious tone as traders
remain concerned with report that in an escalation to the trade war with China,
US President Donald Trump announced imposition of new tariffs on additional
$200 billion worth of Chinese imports. On the domestic turf, market
participants remained cautious with International Monetary Fund's (IMF)
estimates that the real effective depreciation of Indian rupees is between 6-7%
compared to December 2017. It said broadly since the beginning of the year,
Indian rupee has lost about 11% of its value in nominal terms vis-a-vis the US
dollar. However, losses remain capped as some relief came with CBDT Chairman
Sushil Chandra expressing confidence in exceeding Rs 11.5 lakh crore direct tax
collection target in current fiscal. Some support also came with report stating
that Markets regulator SEBI has relaxed initial public offer (IPO) norms to
allow companies to announce the price band two days before an offering. But
selling in last leg of trade mainly played spoil sports for domestic markets
and dragged key gauges near intraday lows as sentiments got hit with credit
rating agency, India Ratings and Research's latest report that banks' credit
costs are likely to remain elevated at 2%-3% during FY19-FY20, on the back of
ageing of non-performing assets (NPAs), accelerated provisioning and slippages
especially from non-corporate accounts. Traders took note of a report that with
interest rates cycle reversing, cost of borrowing for housing finance companies
(HFCs) and microfinance institutions (MFIs) is likely to increase by over 30
basis points in the current fiscal year, and by another 40-50 basis in FY20.
Separately, the indebtedness of Indian households nearly doubled in the year to
March 2018, with their financial liabilities rising 80% to Rs 6.74 lakh crore.
Traders overlooked Finance minister Arun Jaitley's statement that the reforms
undertaken by the government in the banking sector have started to yield results
and recoveries increased on bad loans that had ballooned because of
disproportionate lending during the Congress-led UPA rule. Finally, the BSE
Sensex declined 294.84 points or 0.78% to 37,290.67, while the CNX Nifty was
down by 98.85 points or 0.87% to 11,278.90.
The US markets ended higher on
Tuesday, as traders shrugged off concerns about the escalating trade war
between the U.S. and China. Traders seemed to be expressing relief that the
rates of tariffs the U.S. will impose on Chinese goods and retaliatory tariffs
China will impose on U.S. goods are not as high as feared. US President Donald
Trump announced new tariffs on approximately $200 billion worth of Chinese
imports on Monday, although the tariffs will initially be set at 10 percent
compared to the 25 percent previously floated by the administration. However,
the tariffs are set to rise to 25 percent on January 1, and Trump said the U.S.
would impose tariffs on another $267 billion worth of Chinese imports if China
takes retaliatory action. Despite the threat from Trump, China announced it
will retaliate by imposing tariffs on $60 billion worth of U.S. goods,
effective September 24. The Chinese tariffs will reportedly range from 5
percent to 10 percent after China previously earmarked some goods for a 20 percent
levy. On the economic front, the National Association of Home Builders released
a report showing homebuilder confidence has held steady in the month of
September. The report said the NAHB/Wells Fargo Housing Market Index came in at
67 in September, unchanged from August. The street had expected the index to
edge down to 66. Dow Jones Industrial Average surged 184.84 points or 0.71
percent to 26,246.96, the S&P 500 gained 60.31 points or 0.76 percent to
7956.11 and Nasdaq was up by 15.51 points or 0.54 percent to 2,904.31.
Crude oil futures ended higher on
Tuesday as risks to global crude supplies escalated ahead of data that are
expected to reveal a fifth-straight weekly decline in US inventories. Saudi
Arabia's remarks that it was comfortable with Brent oil above $80 a barrel, at
least in the short term, supported oil's up move. Besides, rising geopolitical
tensions after Russia blamed Israel for the loss of one of its reconnaissance
planes shot down overnight by Syrian defense systems, too contributed to oil's
rise. Investors looking for the data from the US Energy Information
Administration, to be released September 20. Benchmark crude oil futures for
October gained 94 cents or 1.4 percent to settle at $69.85 a barrel on the New
York Mercantile Exchange. November Brent crude fell 98 cents or 1.3% to settle
at $79.03 a barrel on London's Intercontinental Exchanged.
Continuing its losing streak for
the second straight session, Rupee weakened significantly against the American
currency on Tuesday. Investors remained cautious with International Monetary
Fund's (IMF) estimates that the real effective depreciation of Indian rupees is
between 6-7% compared to December 2017. It said broadly since the beginning of
the year, Indian rupee has lost about 11% of its value in nominal terms
vis-a-vis the US dollar. Rupee sentiments got hit with credit rating agency,
India Ratings and Research's latest report that banks' credit costs are likely
to remain elevated at 2%-3% during FY19-FY20, on the back of ageing of
non-performing assets (NPAs), accelerated provisioning and slippages especially
from non-corporate accounts. On the
global front, the US dollar was flat against other currencies on Tuesday as the
White House imposed fresh tariffs on China. Finally, the rupee ended at 72.97,
48 paise weaker from its previous close of 72.49 on Monday.
The FIIs as per Tuesday'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 4181.98 crore against gross selling
of Rs 4086.32 crore, while in the debt segment, the gross purchase was of Rs
384.14 crore with gross sales of Rs 1129.90 crore. Besides, in the hybrid
segment, the gross selling was of Rs 0.09 crore as against no buying.
The US markets ended higher on
Tuesday, as investors shrugged off concerns about the escalating trade war
between the US-China and shifted focus on the robust economy. Asian markets
were trading mostly in green on Wednesday as investors looked past the latest
escalation in the US-China trade conflict, seen by some market participants as
less severe than expected. Late hour selloff mainly dragged the Indian markets
lower for the second straight session on Tuesday following weak trade in global
counterparts amid worsened trade tensions between the US and China coupled with
surge in crude prices. Today, the markets are likely to make a positive start
following firm trade in other global markets. Traders will be getting some
encouragement with report that the finance ministry on September 18 asked
ministries to shortlist commodities and goods for import curbs by increasing
customs duty, to ease the pressure on the rupee and keep the widening Current
Account Deficit (CAD) on check. Besides, Finance Minister Arun Jaitley made a
case for blending subsidy with investment to augment farm sector growth and
make it sustainable and self-sufficient. However, traders will be concerned
about India Ratings' report that though the Centre may manage to achieve the
debt-to-GDP ratio target of 40% by FY23, the states achieving the 20% target
looks difficult as most of them have not budgeted so far. There will be some
cautiousness with report that the country's rainfall deficit in the ongoing
monsoon season widened to 10%, hovering on borderline drought conditions,
following below-normal showers every month - a pattern of consistent shortfall
not seen since 2004. There will be some buzz in sugar sector stocks with report
that the government is now expected to come out with a bailout package for
sugar sector, after announcing a higher price for ethanol manufacturers.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,278.90
|
11,228.08
|
11,370.58
|
BSE Sensex
|
37,290.67
|
37,107.20
|
37,609.79
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
SBI
|
339.01
|
273.80
|
268.50
|
283.00
|
Yes Bank
|
302.44
|
323.55
|
318.78
|
328.63
|
ICICI Bank
|
148.25
|
318.85
|
315.02
|
325.37
|
Vedanta
|
132.29
|
230.15
|
227.10
|
234.10
|
Tata Motors
|
115.54
|
251.50
|
248.13
|
257.33
|
Larsen & Toubro's construction arm -- L&T Construction has won orders worth Rs 2,048 crore across two business segments.
State Bank of India is planning to sell eight non-performing assets in order to recover dues worth over Rs 3,900 crore.
Adani Ports and Special Economic Zones' wholly owned subsidiary Adani Logistics has incorporated a Joint Venture company namely Adani NYK Auto Logistics Solutions on September 17, 2018.
NTPC has received an approval to invest in Talcher Thermal Power Project, Stage-III (2x660 MW) at an appraised current estimated cost of Rs 9,785.79 crore.