Indian equity benchmarks bounced
back to end the trading session near their intraday high points on Thursday.
The markets made a negative start of day, amid reports that the United States
has told India it is considering caps on H-1B work visas for nations that force
foreign companies to store data locally. The US government plan to cap H-1B
visas issued each year to Indians at between 10% and 15% of the annual quota.
There is no current country-specific limit on the 85,000 H-1B work visas
granted each year and an estimated 70% go to Indians. But, key indices soon
staged recovery, taking encouragement with Commerce and Industry Minister
Piyush Goyals' statement that the government will not allow foreign companies
to operate in multi-brand segment and necessary action will be taken against
people indulging in predatory pricing. Bourses extended their gains in the
second half of the session, tracking firm global markets. Domestic sentiments
remained positive as Central Board of Indirect Taxes and Customs (CBIC)
informed that all genuine exporters will continue to get their Indirect Goods
and Services Tax (IGST) refunds in a timely manner in a fully automated
environment. Traders also took encouragement with President Ram Nath Kovind's
statement that the government will soon announce a new industrial policy aimed
at promoting the growth of industries and creation of jobs. The street
overlooked report that DBS Bank revised India's GDP growth for fiscal year 2020
downwards to 6.8 per cent year-on-year (YoY) from 7 per cent projected earlier,
citing headwinds for exports amidst challenging trade outlook. Finally, the BSE
Sensex rose 488.89 points or 1.25% to 39,601.63, while the CNX Nifty was up by
140.30 points or 1.20% to 11,831.75.
The US markets ended higher with
gains of around one percent on Thursday as traders continued to react
positively to the Federal Reserve's monetary policy announcement on Wednesday.
The Fed left interest rates unchanged as widely expected but signaled that the
next change in interest rates is likely to be a rate cut. The FedWatch Tool
currently indicates a 65.7 percent chance for a 25 basis point rate cut and a
34.3 percent chance for a 50 basis point rate cut. Traders are likely to closely watch incoming
economic data in the weeks leading up to the meeting for clues about the
potential for lower rates. On the economic front, Labor Department released a
report showing a modest decrease in first-time claims for US unemployment
benefits in the week ended June 15. The report said initial jobless claims
dipped to 216,000, a decrease of 6,000 from the previous week's unrevised level
of 222,000. Street had expected jobless claims to edge down to 220,000. A
separate report from the Philadelphia Federal Reserve showed regional
manufacturing activity was nearly stagnant in the month of June. The Philly Fed
said its index for current general activity tumbled to 0.3 in June from 16.6 in
May. While a positive reading still indicates growth in regional manufacturing
activity, Street had expected the index to slip to 11.0. With the much bigger
than expected decrease, the Philly Fed Index fell to its lowest level since
turning negative in February. The steep drop by the headline index came as the
shipments index plunged to 16.6 in June from 27.6 in May, while the new orders
index slid to 8.3 from 11.0. The report said the number of employees index also
dropped to 15.4 in June from 18.2 in May, indicating a slowdown in the pace of
job growth. On the inflation front, the prices received index plunged to 0.6 in
June from 17.5 in May and the prices paid index slumped to 12.9 from 23.1. Dow
Jones Industrial Average surged 249.17 points or 0.94 percent to 26753.17,
Nasdaq rose 64.02 points or 0.80 percent to 8051.34 and S&P 500 was up by
27.72 points or 0.95 percent to 2954.18.
Crude oil futures ended higher on
Thursday with oil prices scoring their highest settlement this month and
posting their biggest one-day gain so far this year, after Iran shot down a US
military drone, adding to fears of a deepening conflict and potential
disruption to oil supplies. Besides, the Energy Information Administration
(EIA) reported that domestic supplies of natural gas rose by 115 billion cubic
feet for the week ended June 14. The average forecast by S&P Global Platts
had called for an increase of 104 billion cubic feet. Benchmark crude oil
futures for July surged $2.89 or 5.4 percent to settle at $56.65 a barrel on
the New York Mercantile Exchange. August Brent rose $2.63 or 4.3 percent to
settle at $64.45 a barrel on London's Intercontinental Exchange.
Indian rupee gained ground against dollar and ended higher
on Thursday, on persistent selling of the American currency by exporters.
Sentiments remained up-beat with Commerce and Industry Minister Piyush Goyals'
statement that the government will not allow foreign companies to operate in
multi-brand segment and necessary action will be taken against people indulging
in predatory pricing. Traders paid no heed towards DBS Bank revised India's GDP
growth for fiscal year 2020 downwards to 6.8 per cent year-on-year (YoY) from 7
per cent projected earlier, citing headwinds for exports amidst challenging
trade outlook. Besides, weakness in the dollar against some other currencies
overseas along with good going in the local equity markets gave the uptrend
some momentum. On the global front, dollar fell on Thursday, skidding to a
six-month low versus the yen, after the U.S. Federal Reserve signaled it was
ready to lower interest rates to combat growing domestic and global risks.
Finally, the rupee ended at 69.44, 24 paise stronger from its previous close of
69.68 on Wednesday.
The
FIIs as per Thursday's data were net sellers in equity segment, while they were
net buyers in debt segment. In equity segment, the gross buying was of Rs
4562.85 crore against gross selling of Rs 4585.43 crore, while in the debt
segment, the gross purchase was of Rs 2959.14 crore with gross sales of Rs
2155.10 crore. Besides, in the hybrid segment, the gross buying was of Rs 7.06
crore against gross selling of Rs 8.51 crore.
The US markets ended higher on
Thursday as traders continued to react positively to the Federal Reserve's
monetary policy announcement on June 19. Asian markets are trading mixed on
Friday over US-China trade tensions and rise in crude oil prices. Indian
markets rallied on Thursday, with Sensex and Nifty gaining over a percent each,
driven by gains in banking, healthcare and auto stocks, amid strong cues from
the global markets. Today, the markets are likely to make a cautious start amid
mixed cues from Asian peers as well as higher crude oil prices. Investors will
be eyeing the Goods and Services Tax (GST) Council meeting later in the day.
Finance Minister Nirmala Sitharaman will chair her first meeting of the GST
Council which, among other things, would consider extending the tenure of the
anti-profiteering authority by a year, setting up a single point refund system
and a mechanism for businesses to issue e-invoices. The agenda of the meeting
will also include integration of GST e-way bill system with NHAI's FASTag
mechanism from April 1, 2020, to help track movement of goods and check GST
evasion. There will be some cautiousness with the Reserve Bank of India's
report that both bank credit and deposits slowed to 9.92 percent and 12.31
percent at Rs 96.52 lakh crore and Rs 125.40 lakh crore, respectively, for the
fortnight ending June 7. Also, the RBI's minutes of the monetary policy meeting
showed that the Indian economy has been clearly losing traction and needs a
decisive monetary policy to promote growth. However, traders may take note of
the State Department's statement that the Trump administration has no plans to
cap H-1B work visas for nations that force foreign companies to store data
locally. Meanwhile, the RBI said the currency trading platform for retail
trading is ready for roll-out by the Clearing Corporation of India (CCIL) on
August 5 to enable transparent and fair pricing for retail users, such as
individuals and micro, small and medium enterprises. There will be some buzz in
infrastructure stocks with report that terming infrastructure as pivotal in
propelling prosperity and growth, President Ram Nath Kovind said the government's
endeavour is to build 35,000 km of highways, besides expressways, by 2022 and
to lay a strong foundation for urban infrastructure that will encourage
employment generation.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,831.75
|
11,696.70
|
11,905.15
|
BSE Sensex
|
39,601.63
|
39,144.06
|
39,848.92
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,593.93
|
114.55
|
103.53
|
120.73
|
Indiabulls Housing Finance
|
308.08
|
599.75
|
567.37
|
619.57
|
ICICI Bank
|
243.16
|
433.40
|
423.38
|
439.03
|
SBIN
|
206.27
|
345.15
|
338.42
|
349.07
|
Tata Motors
|
192.48
|
159.25
|
154.27
|
162.12
|
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IndusInd Bank has fixed July 4, 2019, as the effective date for merger with Bharat Financial Inclusion.