Indian equity benchmarks settled
at lifetime closing high on Friday, as investors felt assured of policy
stability after a decisive mandate for the Narendra Modi-led BJP in the general
elections. The markets made a firm start of the day, aided by Fitch Ratings' latest
report stating that a landslide victory of the Bharatiya Janata Party (BJP)
marked an easing of political uncertainty and is expected to improve business
sentiment and the outlook for private investment. From a credit rating
perspective, it would focus on the extent of the next government's efforts to
improve India's weak fiscal finances. The street took a note of Central Board
of Direct Taxes' (CBDT) latest notification that senior citizens with a taxable
income of up to Rs 5 lakh can now submit in banks and post offices Form 15H to
claim exemption from Tax Deducted at Source (TDS) on interest income on
deposits. Earlier, the limit for seeking TDS exemption was Rs 2.5 lakh. Markets
further gained traction to end the trading session with fabulous gains of over
1.50%, following firm European markets. Key indices were optimistic amid
reports that major industry bodies have hailed the election verdict and said
the transformation of India is on a fast track with several innovative mega
missions under the leadership of Prime Minister Narendra Modi. Vikram
Kirloskar, President of the Confederation of Indian Industry (CII) said that
the decisive election results will propel India's growth pace to the next orbit
and drive the transformation of the country. Meanwhile, Moody's Investors
Service in its latest report said that its credit view on the country will
depend on policies of the new government. As per the trend, BJP-led National
Democratic Alliance (NDA) will form the government at the Centre for the second
successive term with absolute majority. Finally, the BSE Sensex gained 623.33
points or 1.61% to 39,434.72, while the CNX Nifty was up by 187.05 points or
1.60% to 11,844.10.
The US markets ended higher on
Friday as some traders looked to pick up stocks at reduced levels following
Thursday's steep losses. Some support also came in from easing trade concerns
as President Donald Trump said he remains hopeful of a US-China trade deal,
noting he will meet with Chinese President Xi Jinping at the G20 summit next
month. Trump said that the US could ease up on its ban against Huawei as some
part of a wider trade deal with China. Meanwhile, UK Prime Minister Theresa
May's decision to step down, effective June 7, after several failed attempts to
negotiate an agreement for Britain to leave the European Union. Britain has
until October 31 to reach a deal to leave the EU. On the economic front, after
reporting a significant rebound in new orders for U.S. durable goods in the
previous month, the Commerce Department released a report showing durable goods
orders pulled back in the month of April. The report said durable goods orders
tumbled by 2.1 percent in April after jumping by a downwardly revised 1.7 percent
in March. Orders for transportation equipment led the pullback, plunging by 5.9
percent in April after surging up by 5.9 percent in March. The report said
orders for non-defense aircraft and parts plummeted by 25.1 percent in April
after soaring by 7.8 percent in the previous month. Excluding the steep drop in
orders for transportation equipment, durable goods orders were unchanged in
April following a revised 0.5 percent drop in March. Dow Jones Industrial
Average surged 95.22 points or 0.37 percent to 25585.69, Nasdaq gained 8.73
points or 0.11 percent to 7637.01 and S&P 500 was up by 3.82 points or 0.14
percent to 2826.06.
Recouping a portion of recent
losses, Crude oil futures ended higher with gains of over one percent on
Friday. Oil prices found some support from gains in global stock markets. US
stocks surged following reports that President Donald Trump is likely to ease
up on restrictions against Huawei Technologies Inc. as part of a bigger trade
deal with China. However, Commodity investors feared that tariff tensions
between the US and China could intensify a deceleration of the global economy
that appears to already be at hand in Europe. On Monday, there will be no
regular trading for West Texas Intermediate (WTI) on Nymex, though ICE-traded
Brent crude will have shortened trading hours. Benchmark crude oil futures for
July rose 72 cents or 1.2 percent to settle at $58.63 a barrel on the New York
Mercantile Exchange. July Brent crude gained 93 cents or 1.4 percent to settle
at $68.69 a barrel on London's Intercontinental Exchange.
Reversing previous session's losses, Indian rupee staged a
smart recovery against dollar on Friday, following dollar selling from banks
and exporters. Traders took encouragement with Fitch Ratings' statement that
the Bharatiya Janata Party's (BJP) apparent landslide victory is likely to
improve business sentiment and outlook for private investment. It said that
from a credit rating perspective, Fitch would focus on the extent of the next
government's efforts to improve India's weak fiscal finances. 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, US dollar declined
against most of its major rivals on Thursday amid investors' growing appetite
for the Japanese Yen. Finally, the rupee ended at 69.53, 49 paise stronger from
its previous close of 70.02 on Thursday.
The FIIs as per Friday's data
were net buyers in equity segment, while they were net sellers in debt segment.
In equity segment, the gross buying was of Rs 8288.64 crore against gross
selling of Rs 6848.78 crore, while in the debt segment, the gross purchase was
of Rs 623.87 crore with gross sales of Rs 654.79 crore. Besides, in the hybrid
segment, the gross buying was of Rs 59.81 crore against gross selling of Rs
48.27 crore.
The US markets ended higher on
Friday amid easing trade concerns as President Donald Trump said he remains
hopeful of a US-China trade deal. Asian markets are trading mixed on Monday as
investors watched for developments from US President Donald Trump's state visit
to Japan as well as results from the European parliamentary election. Indian
markets ended higher on Friday, with gains of over 1.5 per cent each, as
investors cheered Prime Minister Narendra Modi's landslide win in Lok Sabha
election as well as a steep fall in oil prices overnight. Today, the start of
the F&O series expiry week is likely to be pessimistic, tailing the mixed
global cues. Market-participants will be eyeing Q4 GDP data, scheduled to be
announced later in the week. There will be some cautiousness with a report that
foreign investors have pulled out a net amount of Rs 4,375 crore from the
Indian capital markets in May so far, driven by global and domestic factors.
Also, the Reserve Bank of India's (RBI) data showed that after rising for the
past few weeks, the country's foreign exchange reserves declined $2.057 billion
to $417.998 billion in the week to May 17 on account of a fall in foreign
currency assets. Traders will also be concerned about a report stating that the
fourth quarter (January to March 2019) financial results released by 304 companies
in the corporate sector show a sequential drop in revenue growth to 10.7 per
cent from 20.1 per cent in the previous quarter (October to December 2018).
Traders may take note of a report that the upcoming Budget in July may revise
the fiscal deficit of 3.4 per cent upwards in view of the need to step up
public expenditure to beat the economic slowdown while keeping in mind tax
revenue are not going to grow at the required pace to match up with increased
expenditure. However, traders may take some encouragement later in the day with
the RBI's statement that it will inject Rs 15,000 crore into the financial
system next month through purchase of government bonds via the auction route.
The decision has been taken in view of the evolving liquidity situation. There
will be some buzz in the banking sector stocks with report that public sector
banks (PSBs) have recovered close to Rs 1.2 lakh crore from stressed assets
during the financial ended March, primarily helped by resolution under the
Insolvency and Bankruptcy Code (IBC). There will be some reaction in
Non-Banking Financial Companies' (NBFCs) stocks with report that the RBI
proposed a set of guidelines for large NBFCs to help them deal with severe
liquidity problems and prevent re-occurrence of IL&FS type of debt crisis.
There will be lots of earnings reaction to keep the markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,844.10
|
11,715.13
|
11,916.03
|
BSE Sensex
|
39,434.72
|
39,013.66
|
39,666.37
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
452.75
|
141.20
|
139.50
|
142.90
|
ICICI Bank
|
377.08
|
431.75
|
418.42
|
439.32
|
State Bank of
India
|
357.03
|
355.35
|
346.90
|
360.40
|
Tata Motors
|
224.94
|
182.30
|
177.27
|
185.42
|
Zee Entertainment
Enterprises
|
194.73
|
376.85
|
361.60
|
386.25
|
Infosys has completed the formation of a strategic partnership with ABN AMRO in the Netherlands.
Cipla has signed an agreement to acquire 26% stake on a fully diluted basis in AMPSolar Power Systems.
JSW Steel has reported a fall of 48.07% in its consolidated net profit at Rs 1,495 crore for Q4FY19 as compared to Rs 2,879 crore for Q4FY18.
L&T has acquired over 4.5 lakh shares of Mindtree from the open market on May 23, 2019.