Key Indian indices snapped 6-day
losing streak on Friday and ended the session in green terrain. After a
cautious start, markets traded volatile, amid reports that despite heavy buying
by foreign investors in the last month of 2018-19 (FY19), foreign portfolio
investors remained net sellers of $5.5 billion in the market. An announcement
of increase in surcharge on the super-rich in the Union Budget FY20 has weighed
on portfolio investors and witnessed outflows, especially in the equity
segment. Sentiments remained muted, amid a private report stating that India
Inc's deal activity in the first six months of this year encompassing both
M&A and private equity transactions, stood at $32.1 billion, down 57 per
cent over last year. Despite volatility, key indices managed to remain in green
terrain for the most part of the session, as rating agency CRISIL in its latest
report said that the Reserve Bank's newly introduced guidelines curbing working
capital limits may lead to better financial discipline. Some support also came
with Niti Aayog CEO Amitabh Kant's statement that India was pursuing a policy
of import substitution so far, and in future, the country's policy will
essentially focus on export-led growth. He said India has huge potential to
become a global manufacturing hub for electronics products. Some relief also
came with the Employees' State Insurance Corporation (ESIC) payroll data report
that around 12.66 lakh jobs were created in May, a tad higher than 11.15 lakh
jobs in April this year. Finally, the BSE Sensex gained 51.81 points or 0.14%
to 37,882.79, while the CNX Nifty was up by 32.15 points or 0.29% to 11,284.30.
The US markets settled in green
on Friday as investors welcomed strong corporate earnings, government approval
of the T-Mobile and Sprint merger, and better-than-expected economic growth.
Alphabet, Twitter reported better than expected second quarter earnings. The US
Justice Department officially approved the merger between T-Mobile US Inc and
Sprint Corp provided the wireless carriers divest assets to Dish Network Corp.
Besides, US economic growth slowed in the second quarter but still exceeded
street estimates, according to a report released by the Commerce Department.
The Commerce Department said real gross domestic product climbed by 2.1 percent
in the second quarter following the 3.1 percent jump in the first quarter.
Street had expected the pace of GDP growth to slow to 1.9 percent. The stronger
than expected GDP growth was partly due to a substantial acceleration in the
pace of growth in consumer spending, which soared by 4.3 percent in the second
quarter after rising by 1.1 percent in the first quarter. A 7.9 percent spike
in federal government spending also contributed to the GDP growth along with a
3.2 percent increase in state and local government spending. Meanwhile, the
Commerce Department said negative contributions from private inventory
investment, exports, non-residential fixed investment and residential fixed
investment limited the upside. The report also said imports, which are a
subtraction in the calculation of GDP, inched up by 0.1 percent in the second
quarter after tumbling by 1.5 percent in the first quarter. Dow Jones
Industrial Average gained 51.47 points or 0.19 percent to 27192.45, Nasdaq
surged 91.67 points or 1.11 percent to 8330.21 and S&P 500 was up by 22.19
points or 0.74 percent to 3025.86.
Crude oil futures ended marginally
higher on Friday as traders continued to worry over prospects for demand
growth. Oil prices saw little movement after oil-field services firm Baker
Hughes reported the number of US oil rigs fell by three this week to 776. A
private report stated that Oil market fundamentals are at an inflection point,
with rising US output moving to offset cuts by members of the Organization of
the Petroleum Exporting Countries (OPEC) and its allies as worries mount over
global economic growth. Benchmark crude oil futures for September gained 18
cents or 0.3 percent to settle at $56.20 a barrel on the New York Mercantile
Exchange. October Brent added 11 cents or 0.2 percent to settle at $63.37 a
barrel on London's Intercontinental Exchange.
Indian
rupee ended stronger against dollar on Friday, due to increased selling of the
American currency by exporters and banks. Local investors cheered with Niti
Aayog CEO Amitabh Kant's statement that India was pursuing a policy of import
substitution so far, and in future, the country's policy will essentially focus
on export-led growth. He said India has huge potential to become a global
manufacturing hub for electronics products. Some relief also came with the
Employees' State Insurance Corporation (ESIC) payroll data report that around
12.66 lakh jobs were created in May, a tad higher than 11.15 lakh jobs in April
this year. However, dollar's strength against major global currencies overseas
restricted the local unit's further up move. On the global front, dollar held
near two-month highs on Friday and looked set for a second straight weekly
gain, as the market awaited U.S. gross domestic product numbers for the second
quarter. Finally, the rupee ended at 68.89, 15 paise stronger from its previous
close of 69.04 on Thursday.
The FIIs as per Friday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 6952.03 crore against gross selling of Rs 6416.93 crore while
in the debt segment, the gross purchase was of Rs 1333.39 crore with gross
sales of Rs 1300.38 crore. Besides, in the hybrid segment, the gross buying was
of Rs 8.41 crore against gross selling of Rs 5.64 crore.
The US markets ended higher on
Friday on the back of strong earnings and better-than-expected GDP data. Asian
markets are trading in red on Monday amid US-China talks to resume in Beijing
later this week amid low expectations for a major breakthrough. Indian markets
snapped six-day losing streak and ended higher on Friday with Sensex and Nifty
recapturing their 37,800 and 11,250 levels, respectively, led by gains in auto
and banking stocks. Today, the markets are likely to make a weak start
following negative trend in the Asian peers. Traders will be concerned with the
latest depositories data showing that reversing their five-month buying trend,
overseas investors have pressed the exit button in July and pulled out a net Rs
3,758 crore from the Indian capital markets on account of multiple headwinds,
including the super-rich tax announced in Budget 2019-20. Foreign portfolio
investors (FPIs) pulled out a net sum of Rs 14,382.59 from equities during July
1-26, but invested Rs 10,624.15 crore in the debt segment, taking the total net
outflow to Rs 3,758.44 crore. There will be some cautiousness with a report
that midway into earnings season, it is clear that India Inc's P&L account
remains under pressure. Revenue growth is so sluggish that even a modest
increase in costs has not helped companies protect their margins. Traders may
also take note of report that Finance Minister Nirmala Sitharaman has ruled out
reconsidering a plan to issue foreign currency overseas sovereign bonds,
despite warnings of long-term risk for the economy. However, some respite may
come later in the day as India's chief economic advisor to the Union finance
minister Krishnamurthy Subramanian exuded confidence in the economy swelling to
a $5-trillion giant by 2025, saying the high target is definitely achievable.
Meanwhile, the Insolvency and Bankruptcy Board of India (IBBI) has amended
norms pertaining to insolvency resolution process for corporate persons and
liquidation process. Moreover, markets watchdog SEBI has eased the conditions
for exchanges to provide incentives under liquidity enhancement schemes (LES)
in the first five years of operation. There will be some buzz in the auto
stocks as the high-powered GST Council decided to reduce the tax rate on
electric vehicles (EVs) to 5% from the existing 12%, a move aimed at
accelerating the adoption of eco-friendly mobility solutions. The new Goods and
Services Tax (GST) rate on EVs will be effective from August 01. Besides,
mobile marketing firm Affle India will open its initial public offering for
subscription on July 29. The company is aimed to raise Rs 456.52 crore at the
lower end of the price band and Rs 459 crore at the higher end of the price
band of Rs 740-745 per share. There will be lots of important earnings
announcements too, to keep the markets in action.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,284.30
|
11,227.03
|
11,324.58
|
BSE Sensex
|
37,882.79
|
37,722.82
|
38,010.42
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in
Lacs)
|
Yes Bank
|
1,860.97
|
96.05
|
89.80
|
99.60
|
Tata Motors
|
839.06
|
147.15
|
140.12
|
152.17
|
Vedanta
|
236.46
|
164.10
|
159.27
|
172.42
|
ICICI Bank
|
174.94
|
415.75
|
409.73
|
420.58
|
SBI
|
161.39
|
342.60
|
340.02
|
345.67
|
SBI is all set to revise export transactions related service charges to provide clear visibility of cost structures to traders.
Tata Steel has subscribed to 2.58 crore rights equity shares of Tata Sponge Iron at an issue price of Rs 500 per share totaling to Rs 1,292.2 crore.
Yes Bank has acquired 32,750,139 equity shares having nominal value of Rs 5 per share, constituting 18.55% of the post-issue paid-up share capital of Cox & Kings.
M&M's utility vehicle Bolero Power plus model has received BS-VI readiness certification from the International Centre for Automotive Technology.