Javeri Fiscal Services Ltd. Daily Newsletter
NSE Intra-day chart (19 December 2019)
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Market Commentary 20 December 2019
Benchmarks to open marginally in green on Friday

 

Dalal Street extended record setting rally on Thursday's trading session, with the Sensex and the Nifty ending around 0.30% higher each. The start of the day was lackluster, impacted with former Chief Economic Adviser Arvind Subramanian's statement that India is facing a Great Slowdown with its economy headed for intensive care unit primarily due to a second wave of the twin balance sheet crisis at banks. Sentiments also got hit with reports that most of the states opposed a change in slabs or hike in GST during the crucial GST Council meeting, arguing an increase in the levies would have adverse implications for the economy facing a slowdown. In noon deals, bourses staged sharp recovery to hit fresh record highs, taking support with NASSCOM President, Debjani Ghosh's statement that technology startups alone have created 60,000 direct jobs this year and overall the IT sector will be a positive hirer in the current financial year. Sentiments also remained positive, as Union Minister for Finance & Corporate Affairs, Nirmala Sitharaman held her 5th Pre-Budget Consultation with the representatives of various Trade Unions and Labour Organisations in connection with the forthcoming General Budget 2020-21. Discussions were held on skilling, re-skilling and up-skilling of existing labour force. Quality of job creation and ensuring minimum wages of workers were also discussed. Finally, the BSE Sensex gained 115.35 points or 0.28% to 41,673.92, while the CNX Nifty was up by 38.05 points or 0.31% to 12,259.70.

 

The US markets ended at record highs again on Thursday as investors looked past the news of President Donald Trump's impeachment by the House as well as mixed US economic data. The Democrat-led House of Representatives voted to impeach Trump for abuse of power and obstruction of Congress. Trump became only the third president to be charged with high crimes and misdemeanors and will now face a trial in the Republican-controlled Senate. However, markets have largely shrugged off impeachment news as the chances of a trial conviction in the Senate are low. Because of this, the market's performance during Trump's impeachment process is tracking that of the time when former President Bill Clinton was impeached. On the economic data front, after reporting a significant increase in first-time claims for US unemployment benefits in the previous week, the Labor Department released a report showing initial jobless claims pulled back in the week ended December 14. The report said initial jobless claims fell to 234,000, a decrease of 18,000 from the previous week's unrevised level of 252,000. Meanwhile, a report released by the National Association of Realtors (NAR) showed a much bigger than expected pullback in US existing home sales in the month of November. NAR said existing home sales tumbled by 1.7 percent to an annual rate of 5.35 million in November after jumping by 1.5 percent to a revised 5.44 million in October.

 

Crude oil futures ended higher on Thursday and logged their highest settlement since mid-September on easing worries about outlook for energy demand on hopes the US and China will soon sign the phase one trade deal. Meanwhile, China has announced a list of United States chemicals that will be exempted from import tariffs starting December 26. This comes under a week after Beijing and Washington agreed a phase one trade deal. Besides, oil prices were supported by the decision of Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers to deepen production cuts by a further 500,000 barrels per day from January 1. This will be on top of existing reductions of 1.2 million barrels per day. Benchmark crude oil futures for January gained 29 cents or 0.5 percent to settle at $61.22 a barrel on the New York Mercantile Exchange. February Brent rose 37 cents or 0.6 percent to settle at $66.54 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended marginally weaker against the US dollar on Thursday, due to increased demand of the greenback from the importers and the banks. Traders remained cautious with Chief Economic Adviser Arvind Subramanian's statement that India is facing a Great Slowdown with its economy headed for intensive care unit primarily due to a second wave of the twin balance sheet crisis at banks. However, losses were limited as some optimism remained among the traders with private report that after months of slump witnessed in consumer confidence in India, the same has picked up in December as various government measures boost the mood. In December, consumer confidence has further surged by 3.3 percentage points. On the global front, dollar took in stride the impeachment of US President Donald Trump on Thursday while its Australian counterpart rallied after a surprise fall in the country's unemployment rate. Finally, the rupee ended at 71.03, 6 paise weaker from its previous close of 70.97 on Wednesday.

 

The FIIs as per Thursday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 7569.08 crore against gross selling of Rs 5716.48 crore, while in the debt segment, the gross purchase was of Rs 1433.57 crore with gross sales of Rs 975.41 crore. Besides, in the hybrid segment, the gross buying was of Rs 14.94 crore against gross selling of Rs 15.41 crore.

 

The US markets settled at all-time highs on Thursday as investors looked past the news of President Donald Trump's impeachment by the House as well as mixed US economic data. Asian markets are trading mostly higher on Friday following gains on Wall Street. Indian markets continued their bulls run and ended at a record close for the third straight session led by auto, IT, and FMCG sectors. Today, the markets are likely to get flat-to-positive start tracking global markets. Traders will be getting some support as DPIIT Secretary Guruprasad Mohapatra expressed optimism that India will soon break into the top 50 in the World Bank's ease of doing business ranking. Traders may take note of report that after the minutes of the Monetary Policy Committee (MPC) meeting was released, rating agency Care Ratings said it is expecting another 25 basis points rate cut in February itself. However, there will be some cautiousness with Union Rural Development Minister Narendra Singh Tomar's statement that the dream of India becoming a 5 trillion dollar economy cannot be achieved if the villages in the country are ignored. Also, a private report indicated that industry fears that the Goods and Services Tax (GST) Council's decision to further restrict input tax credit (ITC) on invoices not uploaded in the relevant form would block the cash flow of businesses, at a time when they're struggling on finances due to economic slowdown. Meanwhile, trade unions urged the government to provide a minimum wage of Rs 21,000, a minimum pension of Rs 6,000 under Employees' Pension Scheme and tax exemption on an annual income of up to Rs 10 lakh. There will be some buzz in the textile stocks as the government said the new Textiles Policy 2020 being formulated by the Centre is aimed at developing in the country a competitive textile sector which is modern, sustainable and inclusive. Aviation stocks will be in focus with rating agency ICRA's report that domestic passenger traffic growth is expected to decline to a six-year low of 4.5 percent in the current fiscal and the financial health of the aviation industry will continue to deteriorate. There will be some reaction in insurance stocks with report that life insurers have sought 100 percent foreign direct investment (FDI) limit for the sector through the automatic route, which can help the sector attract capital of Rs 40,000-60,000 crore.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

12,259.70

12,211.12

12,288.32

BSE Sensex

41,673.92

41,513.78

41,776.67

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

3,079.36

49.90

46.10

52.55

Tata Motors

534.67

179.15

175.37

181.57

SBI

275.16

328.15

325.23

330.33

Tata Steel

205.47

446.75

440.03

451.43

Vedanta

177.13

149.35

147.13

152.73

 

  • IOC's state-of-the-art INDMAX refining technology has been selected by a Serbian oil and gas company for production of higher value products from crude oil. 
  • Tech Mahindra and Celonis, a leader in Process Excellence software, have entered into global strategic alliance to drive enterprise performance.
  • TCS has expanded its long-standing partnership with VIAVI Solutions to support the development of next-generation products and solutions.  
  • Tata Motors has unveiled India's Own Electric SUV -- the Nexon EV, an aspirational SUV for personal car buyers looking for a thrilling, connected drive experience with zero emissions.
News Analysis