In a highly volatile session,
Indian equity benchmarks managed to keep their heads above water in Wednesday's
trading session, with Sensex and Nifty closing higher by over 0.20% each. Key
indices made a fabulous start of the day, amid reports that the finance
ministry is working on one more booster dose to give a leg-up to the economy
that has hit over six-year low of 5 per cent. However, soon volatility
persisted over the markets, after global credit rating agency Moody's in its
latest report said that reduction in the risk weight on consumer credit by the
Reserve Bank of India is credit negative as it may lead to increased exposure
by lenders to this loan segment. But, equity benchmarks managed to trade in
green territory for the most part of the trading session to end higher, taking
comfort with Principal Economic Adviser Sanjeev Sanyal's statement that there
is far more space on the monetary side than the fiscal front for lifting
sagging economic growth. Some support also came with Minister of Commerce and
Industry and Railways Piyush Goyal's statement that government is planning to
launch a National Logistics Policy to reduce trade costs. He added that all
transport sectors of railways, civil aviation, roads and shipping would work
towards bringing logistics costs below 10%. Finally, the BSE Sensex gained
82.79 points or 0.23% to 36,563.88, while the CNX Nifty was up by 23.05 points
or 0.21% to 10,840.65.
The US markets ended volatile
session mostly in green on Wednesday after the Federal Reserve revealed its
widely expected decision to cut rates by another 25 basis points, lowering the
target range for the federal funds rate to 1.75 to 2 percent. The latest rate
cut was once again attributed to the implications of global developments for
the economic outlook as well as muted inflation pressures. The accompanying
statement was largely unchanged from July, with the Fed reiterating that the
labor market remains strong and that economic activity has been rising at a
moderate rate. The Fed did acknowledge in its latest statement that exports
have weakened along with business fixed investment, although the central bank
noted household spending has been rising at a strong pace. The central bank
reiterated that it will act as appropriate to sustain the economic expansion,
with a strong labor market and inflation near its symmetric 2 percent
objective. Fed Chairman Jerome Powell said that the central bank is prepared for
a more extensive sequence of rate cuts in the face of an economic downturn but
noted that is not currently expected. The Fed announcement largely overshadowed
a Commerce Department report showing a substantial rebound in new residential
construction in the month of August. US homebuilding surged to more than a
12-year high in August as both single- and multi-family housing construction
increased, suggesting that lower mortgage rates were finally providing a boost
to the struggling housing market. As per the report, housing starts jumped
12.3% to a seasonally adjusted annual rate of 1.364 million units last month,
the highest level since June 2007.
Extending losses for second
straight session, crude oil futures ended lower on Wednesday following data
showing an increase in US crude stockpiles last week and a sooner than expected
recovery in Saudi Arabia's output levels. The Energy Information
Administration's data showed that crude inventories in the US rose by 1.06
million barrels in the week ended September 13, compared with expectations for
a drawdown of 2.5 million barrels. Gasoline inventories were up by 780,000
barrels last week, against forecasts for a drop of 540,000 barrels. Meanwhile,
distillate stockpiles increased by 440,000 barrels, compared with forecasts for
a rise of 535,000 barrels. Moreover, Saudi Arabia's Energy Minister Prince
Abdulaziz bin Salman said that average oil production in September and October
would be 9.89 million barrels per day and that the world's top oil exporter
would ensure full oil supply commitments to its customers this month. Benchmark
crude oil futures for October declined $1.23 or 2.1 percent to settle at $58.11
a barrel on the New York Mercantile Exchange. November Brent slipped 95 cents
or 1.5 percent to settle at $63.60 a barrel on London's Intercontinental
Exchange.
Snapping
two days falling streak, Indian rupee staged a smart recovery against dollar on
Wednesday, as positive trend in equity market and easing crude prices
strengthened investor sentiments. Traders also took encouragement with a report
that the finance ministry is working on one more booster dose to give a leg-up
to the economy that has hit over six-year low of 5 per cent. As per the report,
the blue print for the stimulus is ready that would be announced by Finance
Minister Nirmala Sitharaman in the next few days. On the global front, dollar
held near a seven-week high against the Japanese yen on Wednesday before the
outcome of a Federal Reserve meeting where officials are widely expected to cut
interest rates by a quarter of a percentage point. Finally, the rupee ended at
71.24, 54 paise stronger from its previous close of 71.78 on Tuesday.
The
FIIs as per Wednesday's data were net sellers in both equity and debt segments.
In equity segment, the gross buying was of Rs 4406.99 crore against gross
selling of Rs 5087.60 crore, while in the debt segment, the gross purchase was
of Rs 712.22 crore with gross sales of Rs 1107.58 crore. Besides, in the hybrid
segment, the gross buying was of Rs 26.06 crore against gross selling of Rs
25.89 crore.
The US markets closed mostly
higher Wednesday after the Federal Reserve cut its benchmark interest rate for
a second time this year, citing slowing global economic growth and uncertainty
over US trade conflicts. Asian markets are trading mixed as investors looking
for the Bank of Japan (BoJ) to announce its interest rate decision and monetary
policy statement later today. The BoJ is widely expected to maintain a pledge
to guide short-term interest rates at -0.1%. Indian markets snapped two-day
losing streak and ended volatile session in green territory on Wednesday with
notable gains amid easing crude oil prices. Today, the markets are likely to
make a cautious start amid mixed cues from global markets. Traders will be
concerned with report that as against a steep 17.5 percent higher tax
collection budgeted for the full year, the government could mop-up only 4.7
percent more so far this year, with the direct tax kitty growing to Rs 5.50
lakh crore as of September 17, up from Rs 5.25 lakh crore a year-ago. The lower
mop-up reflects the deepening slump in demand and overall growth. Some
cautiousness may also come as ahead of the crucial GST Council meeting on
September 20, a committee of officials has rejected demands for a cut in tax
rate on items ranging from biscuits to car owing to tight revenue position as
any reduction will dent Centre and State collections. Traders may take note of
the India Meteorological Department's (IMD) report that monsoon rains in India
in the week to September 18 were above average for a third straight week, with
floods hitting many districts in the central parts of the country and damaging
crops such as soybean and pulses. Though, some support may come later in the
day with Niti Aayog CEO Amitabh Kant's statement that the government is doing
everything possible to turn around the Indian economy and bring it back to a
high trajectory growth path. Some suprot may also come with Commerce and
Industry Minister Piyush Goyal's statement that huge export potential exists in
chemical and allied sector and it should make a combined effort to set higher
goals and aspire for extraordinary results. There will be some buzz in the
steel stocks with ratings agency ICRA's statement that India's steel
consumption growth is likely to decelerate to six per cent in the current
financial year, due to the economic slowdown. However, the profitability of
steelmakers may recover somewhat in the third quarter of 2019-20, with a sharp
fall in prices of coking coal, key steel-making ingredient, in August 2019.
Housing finance companies stocks will be in focus as after mandating banks to
link their new retail loans to an external benchmark, the Reserve Bank is now
looking at structuring the interest rate regime for housing finance companies
and shadow bankers, which together control over a fifth of the credit market,
for better transmission.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE
Nifty
|
10,840.65
|
10,801.95
|
10,882.25
|
BSE
Sensex
|
36,563.88
|
36,448.87
|
36,695.94
|
Nifty Top volumes
Stock
|
Volume
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
(in
Lacs)
|
Yes
Bank
|
1,869.37
|
64.10
|
61.72
|
66.47
|
Tata
Motors
|
530.49
|
121.75
|
119.53
|
124.93
|
SBI
|
254.79
|
280.40
|
275.55
|
284.10
|
BPCL
|
241.28
|
382.10
|
371.18
|
390.88
|
ITC
|
199.56
|
239.25
|
234.77
|
243.02
|
M&M has incorporated Mahindra Bangladesh as its wholly owned subsidiary.
Reliance Industries' telecom arm Jio has added 85,39,325 customers in July 2019.
Tata Motors has launched Tata Motors AutoMobility Collaboration Network 2.0.
Bajaj Finance has received approval to raise up to Rs 8,500 crore through QIP by issuing equity shares.