Indian equity bourses staged
recovery to end higher on the last trading day of the week. The start of the
day was negative, as credit rating agency ICRA estimated that India's gross
domestic product (GDP) growth may ease to 5.5-6 percent in the first quarter
(April-June) of the fiscal year 2019-20, amid a slowdown in the expansion of
industry and agriculture. Domestic sentiments remained subdued during first
half of the session, amid reports that Chief Economic Adviser (CEA)
Krishnamurthy Subramanian virtually ruled out a major stimulus package for the
economy, saying profit is private, losses are public is not good economics. He
said sunrise and sunset phases for industry are usual and expecting the
government to support industry in sunset phases can be morally hazardous. But,
in the second half of the session, key indices gained the traction, following
firm global markets. Domestic sentiments got a boost, as the Central Board of
Direct Taxes (CBDT) said that small startups with turnover up to Rs 25 crore
will continue to get the promised tax holiday as specified in Section 80-IAC of
the Income Tax Act, 1961 (the Act), which provides deduction for 100 per cent
of income of an eligible start-up for 3 years out of 7 years from the year of
its incorporation. Market participants also took support with reports that the
commerce ministry will soon come out with a new foreign trade policy, with an
aim to simplify procedures for exporters and importers besides providing
incentives to boost outbound shipments. Finally, the BSE Sensex gained 228.23
points or 0.63% to 36,701.16, while the CNX Nifty was up by 88.00 points or
0.82% to 10,829.35.
The US markets ended deeply in
red on Friday on renewed US-China trade concerns after a series of threatening
comments from President Donald Trump. Trump claimed the US does not need China
and would be far better off without them and subsequently ordered American
companies to immediately start looking for an alternative to China. He said the
vast amounts of money made and stolen by China from the United States, year
after year, for decades, will and must stop. The comments from Trump came after
the Chinese Finance Ministry announced plans to impose new tariffs on $75
billion worth of US imports. The new levies include 5 percent tariffs on US
soybeans and crude oil imports, which are scheduled to take effect on September
1st. The move by China was in response to Trump's plan to impose a 10 percent
tariff on $300 billion worth of Chinese imports. On the economic front, Federal
Reserve Chairman Jerome Powell delivered his highly anticipated speech at the
Jackson Hole Economic Policy Symposium on Friday, reiterating the Fed will act
as appropriate to sustain the US economic expansion. Powell described the three
weeks since the Fed decided to lower interest rates by 25 basis points at its
July meeting as eventful. The Fed Chief cited President Donald Trump's
announcement of new tariffs on Chinese imports as well as further signs of a
global economic slowdown, notably in Germany and China. Powell also pointed to
several geopolitical events, including the growing possibility of a hard
Brexit, rising tensions in Hong Kong, and the dissolution of the Italian
government. As a result of the subsequent uncertainty, Powell said the Fed is
carefully watching developments as we assess their implications for the US outlook
and the path of monetary policy. Dow Jones Industrial Average dropped 623.34
points or 2.37 percent to 25628.90, Nasdaq fell 239.62 points or 3.00 percent
to 7751.77 and S&P 500 was down by 75.84 points or 2.59 percent to 2847.11.
Crude oil futures settled lower
on Friday after China announced that it would impose retaliatory tariffs on $75
billion worth of imports from the US, including a levy on crude, amplifying
concerns about the global economy and demand prospects. Reports said tariffs of 10% and 5% would take
effect on two batches of goods worth $75 billion on September 1 and December
15. The tariffs include an extra 5% levy on crude-oil imports beginning next
month. Besides, President Donald Trump threatened further actions against
Beijing and said he had hereby ordered US firms to look for alternatives to
China. Benchmark crude oil futures for October plunged $1.18 or 2.1 percent to
settle at $54.17 a barrel on the New York Mercantile Exchange. October Brent
dropped 58 cents or 1 percent to settle at $59.34 a barrel on London's
Intercontinental Exchange.
Indian
rupee ended higher against the American currency on Friday, as fresh sale of
the US currency by exporters paced up. That apart, the rupee derived its
strength from strong gains in the local equity markets. Local currency got some
support with Niti Aayog Vice Chairman Rajiv Kumar's statement that the
government is considering a number of measures which will be taken at an
appropriate time to deal with financial stress and unleash animal spirit in the
economy. However, gains remain capped as credit rating agency ICRA estimated
that India's gross domestic product (GDP) growth may ease to 5.5-6 percent in
the first quarter (April-June) of the fiscal year 2019-20, amid a slowdown in
the expansion of industry and agriculture. On the global front, euro fell to three-week
lows on Friday as rising US bond yields boosted the dollar before a speech by
the head of the Federal Reserve, which some investors believe will see him
signal reluctance to embark on a long rate-cut cycle. Finally, the rupee ended
at 71.66, 15 paise stronger from its previous close of 71.81 on Thursday.
The
FIIs as per Friday'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
4983.26 crore against gross selling of Rs 6273.18 crore, while in the debt
segment, the gross purchase was of Rs 4177.45 crore with gross sales of Rs
1574.98 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.25
crore against gross selling of Rs 3.90 crore.
The US markets declined on Friday
after President Donald Trump ordered that US manufacturers find alternatives to
their operations in China. Asian markets trading in red on Monday amid
escalation in US-China trade war as reports said America will hike tariffs on
$250 billion worth of Chinese goods to 30% from 25%. Indian markets snapped
3-day losing streak and ended higher on the back of short-covering amid hopes
of stimulus package from government. Today, the markets are likely to make an
optimistic start of new week as the Finance Ministry announced measures to boost
the economy on Friday evening post-market hours. The government announced a
slew of measures to boost the economy, including rollback of enhanced
super-rich tax on foreign and domestic equity investors imposed in the Budget.
Finance Minister Nirmala Sitharaman has said the India's Gross Domestic Product
(GDP) continues to grow at a faster pace than the global economy and any other
major economy. Besides, Industry body CII has said the multi-sectoral and
multi-dimensional policy stimulus announced will have significant impact,
imparting stability and underpinning a new growth impetus for India. Market
participants will be looking ahead to the release of GDP data later in the
week. Investors will be also eyeing the Reserve Bank of India (RBI) board
meeting later today to finalise its annual accounts, is also likely to take up
the Bimal Jalan committee's recommendations on Economic Capital Framework (ECF)
along with the dividend payment to the government. Meanwhile, the government
will soon consider a proposal of relaxing rules for complying with the
mandatory 30 per cent local sourcing norms by foreign single brand retailers.
However, some cautiouness may come as Moody's Investors Service revised
downwards India's GDP growth forecast for the current year to 6.2%, saying the
economy remains sluggish due to a combination of factors such as weak hiring,
distress among rural households and tighter financial conditions. The GDP
growth forecast for 2019 calendar year was revised downwards from its previous
estimation of 6.8%. The same for 2020 was also lowered by a similar 0.6
percentage points to 6.7%. There will be some buzz in the banking stocks as
Finance Minister Nirmala Sitharaman announced upfront capital infusion of Rs
70,000 crore into public sector banks, a move aimed at boosting lending and
improving liquidity situation. The move is expected to generate additional
lending and liquidity in the financial system to the tune of Rs 5 lakh crore.
Also, auto stocks will be in focus as the government announced several relief
measures including deferring one-time registration fee, lifting a ban on the
purchase of petrol/diesel vehicles by its departments and allowing higher
depreciation, but it remained non-committal on the demand for a reduction in
GST rates. In a bid to help clear rising inventory of BS-IV emission compliant
vehicles, it said such vehicles purchased till March 31, 2020 will be allowed
to ply till the validity of their registration.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,829.35
|
10,690.15
|
10,915.55
|
BSE Sensex
|
36,701.16
|
36,266.56
|
36,971.55
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
3,093.68
|
59.25
|
55.58
|
62.08
|
Tata Motors
|
411.79
|
111.05
|
108.60
|
112.55
|
SBIN
|
352.12
|
271.10
|
264.12
|
276.67
|
ICICI Bank
|
268.84
|
395.40
|
386.30
|
404.00
|
Indiabulls Housing
Finance
|
266.15
|
467.85
|
442.70
|
486.30
|
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