Indian equity benchmarks
witnessed absolute carnage on Friday and went home with a cut of around one and
a half percent, breaching their crucial 32,000 (Sensex) and 10,000 (Nifty)
levels. After a gap-down opening, markets never looked confident of recovering
and gradually extended their losses till end to close near intraday lows on
renewed geo-political worries after a report that North Korea could respond to
fresh sanctions with a hydrogen bomb in the Pacific. Back on domestic turf,
sentiments remained dampened on expectations that the government's plan for a
stimulus to halt an economic slowdown may have a negative impact on the fiscal
deficit. Market participants also remained concerned with report that the
Organisation for Economic Co-operation and Development (OECD) trimmed India's
growth forecast for the current financial year, citing the temporary impact of
the rollout of the Goods and Services Tax (GST) and demonetization, expecting
the economy to expand at a slower pace than China. OECD said India's economy
will likely grow 6.7% in FY18, lower than its estimate 7.3% in June. The
Paris-based group of 35 advanced and emerging countries cut its forecast for
India's growth to 7.2% in FY19 from 7.7% estimated earlier. Meanwhile, traders
failed to get any sense of relief with report that the government is
considering a plan to loosen the fiscal deficit target so that it could spend
an additional Rs 500 billion ($ 7.7 billion) in the financial year ending in March
2018. Traders also paid no heed to reports that given the lack of considerable
space both on the monetary and fiscal front to support economic growth, part of
the country's forex reserves can be used to support GDP numbers. Finally, the
BSE Sensex tumbled 447.60 points or 1.38% to 31,922.44, while the CNX Nifty was
down by 157.50 points or 1.56% to 9,964.40.
The US markets ended the
lackluster session near their neutral lines on Friday on geopolitical concerns
amid an escalating war of words between North Korean leader Kim Jong Un and
President Donald Trump. Kim described Trump's threat to ‘totally destroy' North
Korea as mentally deranged behavior. Kim also called Trump's remarks to the
United Nations General Assembly ‘rude nonsense' and claimed he was not
frightened by the president's threat. The back-and-forth between Trump and Kim
came as North Korean Foreign Minister Ri Yong Ho has said his country may
consider testing a hydrogen bomb in the Pacific Ocean. Nonetheless, overall
trading activity was somewhat subdued amid a relatively quiet day on the U.S.
economic front. Traders remained on sidelines ahead of some important
macro-economic data slated to be released in next week. Nasdaq rose 4.23 points
or 0.0.07 percent to 6,426.92 and the S&P 500 was up by 71.62 points or
0.0.6 percent to 2,502.22, while the Dow Jones Industrial Average was down by
9.64 points or 0.04 percent to 22,349.59.
Crude oil futures moved higher on
Friday, as investors shrugged off the outcome of an Opec-led meeting in which
oil producers failed to reach a decision to extend the production-cut
agreement. Russian Energy Minister Alexander Novak said Russia and OPEC can
wait until at least January before announcing further production quotas. In
May, Opec and non-Opec members agreed to extend production cuts of 1.8m barrels
per day for a period of nine months until March 2018 but rising production from
the US, Nigeria and Libya has undermined the oil cartel's efforts to curb
excess supply. Benchmark crude oil futures for November delivery ended higher by
11 cents or 0.2 percent at $50.66 a barrel on the New York Mercantile Exchange.
Brent crude for November delivery gained 27 cents to $56.70 a barrel on the
ICE.
After hitting
near 6-month low, Indian rupee recouped most of its losses and ended tad higher
against dollar on Friday, due to selling of the American currency by banks and
exporters. Local currency got some support with World Trade Organisation (WTO)
raising its 2017 forecast for world trade growth to 3.6% from the 2.4%
estimated earlier, a development which augurs well for India. It also said that
the predicted growth would also represent a substantial improvement on the
lackluster 1.3% increase in 2016. The domestic unit also found support from
dollar weakened overseas. However, extremely bearish local equity markets and
unabated foreign fund outflows, restricted the further move. On the global
front, dollar fell broadly against most rivals on Friday, losing its post-Fed
meeting glow as international discord around North Korea bubbled up again.
Finally, the rupee ended at 64.79, 1 paise stronger from its previous close of
64.80 on Thursday.
The
FIIs as per Friday's data were net sellers in equity and debt segments both. In
equity segment, the gross buying was of Rs 4890.30 crore against gross selling
of Rs 5939.73 crore, while in the debt segment, the gross purchase was of Rs
276.09 crore with gross sales of Rs 420.67 crore.
The US markets extended their
lackluster trade in the last session and made a mixed closing on geopolitical
concerns amid an escalating war of words between North Korean leader Kim Jong
Un and President Donald Trump. The Asian markets have made mostly a lower start
though firm crude oil prices figure are preventing too much damage. The
Japanese market was up as yen declined on speculation Japan's prime minister
will press for a stimulus package alongside his expected call for a snap
election later in the day. The Indian markets plummeted in the last session on
geopolitical worries; with across the board selling dragging the major
benchmarks lower by over a percent. Today, the start is likely to remain
cautious on subdued global cues, however things may improve with the progress
of trade as there are expectation that Prime Minister Narendra Modi would
unveil the much-awaited stimulus package during a scheduled speech to the BJP
national executive meeting later today. The Chief Economic Adviser Arvind
Subramanian has said that the economy is facing multiple headwinds and there is
a need to attack them on various fronts. Arvind Subramanian has been tasked
with preparing details of the pressure points facing the economy and the
probable remedies. Also, there will be some support with a statement from
Finance Ministry ahead of the Reserve Bank of India's (RBI) bi- monthly
monetary policy decision to be announced on October 4 that there is scope for
an RBI rate cut at the next policy review as retail inflation continues to be
low. Meanwhile, the RBI has eased rules governing foreign investment in
corporate bonds by excluding rupee-denominated securities from its overall debt
limit. There will be some buzz in the insurance stocks, as a report from
industry body Assocham has said that the insurance industry in the country is
undergoing multiple disruptions in its functioning and the trend will
accelerate in the future.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,964.40
|
9913.12
|
10055.37
|
BSE Sensex
|
31922.44
|
31758.08
|
32214.80
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
ICICI Bank
|
234.52
|
277.10
|
273.92
|
282.12
|
Hindalco
|
144.54
|
230.90
|
225.57
|
239.77
|
Vedanta
|
133.33
|
307.90
|
302.72
|
316.57
|
SBI
|
128.61
|
261.85
|
259.50
|
265.80
|
Yes Bank
|
121.77
|
360.65
|
354.47
|
371.82
|
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