Bulls took the momentum back from
bears on Monday as key equity benchmarks ended the day on a strong note, on the
back of value buying by traders. The start of the day was little cautious, as
Union Minister Dharmendra Pradhan said crude prices are not under the control
of the Indian government and are determined by international forces. Domestic
sentiments were affected in early morning deals also due to a private report
stating that India's foreign-exchange reserves are shrinking fast and may soon
reach a level that could hamper the central bank's ability to defend the rupee.
Separately, Reserve Bank of India's (RBI) data showed that the country's
foreign exchange reserves declined by $942 million to $393.523 billion in the
week to October 19 on account of a fall in foreign currency assets. The market
participants took note of Finance Minister Arun Jaitley's statement that as an
economy evolves, regulation needs to be relaxed or altered keeping in the mind
the ground situation. However, the markets soon gained traction to rally in
northward direction, supported by Suresh Prabhu's statement that India's export
surged to a six-year high of 9.8% in the financial year 2017-18. In the last
hours of the trading, key indices extended their gains to settle near their
intraday high points, tracking firm European markets. The street cheered the
RBI's statement that it will inject Rs 400 billion into the system in November
through a purchase of government securities as it looks to meet festive season
demand for funds. Adding some optimism, Prime Minister Narendra Modi said that
India is going through a massive transformative phase and international
agencies say the country will drive the growth of the global economy in the
coming decade as he invited the Indian community in Japan to contribute
actively in building a new India. Some support also came with a private report
stating that the global economy is expected to achieve an annual GDP growth
rate, as measured in constant dollars, of 3.7% between 2018-2020 before dipping
to 3.6% between 2021-2023 and, in turn, pass the $100 trillion mark around
2022. Sentiments also got some comfort as the government is expecting that bad
loan recoveries are likely to surpass Rs 1.80 lakh crore target for the current
financial year (FY19), through the new Insolvency and Bankruptcy Code (IBC) and
other means. Finally, the BSE Sensex gained 718.09 points or 2.15% to
34,067.40, while the CNX Nifty was up by 220.85 points or 2.20% to 10,250.85.
The US markets extended their
losses for second straight session on Monday, with major indices losing around
a percent. Sentiments remained under pressure amid reports that the US is
preparing to announce tariffs on all remaining Chinese imports if next month's
talks between Presidents Donald Trump and Xi Jinping fail to ease the trade
war. As per the report, the announcement of the new round of tariffs could come
by early December. It added that the new tariffs would apply to Chinese imports
that are not already covered by previous rounds of tariffs, or approximately
$257 billion worth of goods. Moreover, worries over a possible slowdown in
corporate earnings growth, as well as in the global economy, also weighed on
market sentiments. Meanwhile, traders largely shrugged off a report from the
Commerce Department showing personal income rose by slightly less than expected
in the month of September, although the report also showed personal spending
increased in line with estimates. The report said personal income edged up by
0.2 percent in September after climbing by an upwardly revised 0.4 percent in
August. Street had expected income to rise by 0.3 percent, matching the
increase originally reported for the previous month. Disposable personal
income, or personal income less personal current taxes, also ticked up by 0.2
percent in September after advancing by 0.4 percent in August. Dow Jones
Industrial Average slipped 245.39 points or 0.99 percent to 24,442.92, Nasdaq
declined 116.92 points or 1.63 percent to 7,050.29 and S&P 500 was down by
17.44 points or 0.66 percent to 2,641.25.
Halting three-day winning streak,
crude oil futures ended lower on Monday, amid prospects of a fall in demand for
crude due to slowing global economy. Current political situation in Germany,
Italy and the United Kingdom are also weighing on crude oil. US sanctions on
Iran are set to take effect on November 4, but it is still not clear how big an
impact the loss of Iranian oil will make on global supply. Saudi Arabia has
already stated that it would step up production to make up for the likely
shortfall. Benchmark crude oil futures for December fell 55 cents or 0.8
percent to settle at $67.04 a barrel on the New York Mercantile Exchange.
December Brent crude lost 28 cents or 0.4 percent to settle at $77.34 a barrel
on London's Intercontinental Exchanged.
Indian
rupee ended marginally higher against dollar on Monday, owing to dollar sale by
exporters and banks. Market participants took some support with a private
report that the global economy is expected to achieve an annual GDP growth
rate, as measured in constant dollars, of 3.7% between 2018-2020 before dipping
to 3.6% between 2021-2023 and, in turn, pass the $100 trillion mark around
2022. Besides, a spectacular relief rally in local equities supported the forex
sentiment. However, local currency gave up most of its intraday session gains,
as anxiety remained among the traders with report stating that India's
foreign-exchange reserves are shrinking fast and may soon reach a level that
could hamper the central bank's ability to defend the rupee. On the global
front, dollar rose towards a 10-week high against a basket of other currencies
on Monday as concerns about global growth pervaded markets. Finally, the rupee
ended at 73.45, 2 paise stronger from its previous close of 73.47 on Friday.
The FIIs as per Monday'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 4187.82 crore against gross
selling of Rs 5581.81 crore, while in the debt segment, the gross purchase was
of Rs 1090.91 crore with gross sales of Rs 1054.93 crore. Besides, in the
hybrid segment, the gross buying was of Rs 2.03 crore against no selling.
The US markets ended sharply
lower on Monday as technology stocks tumbled after a report the Trump
administration was set to press its trade war with China. Asian markets were
trading mixed in early deals on Tuesday, amid worries about the US-China trade
war following a report that the US may impose more tariffs against Chinese
goods. Snapping two sessions of losses, Indian markets made remarkable came
back on Monday and ended the session near intra-day high level mainly on the
back of late hour buying across sectors, including financials amid mixed Asian
cues. Today, the markets are likely to make negative start tacking weak global
cues amid renewed worries over global trade after a private report stated that
the United States is preparing to announce tariffs on all remaining Chinese
imports by early December. There will be some cautiousness with the Reserve
Bank of India's (RBI) data showing that Indian companies' investment in their
overseas ventures fell by 47% to $1.54 billion in September 2018. Indian
companies had invested $2.91 billion in their joint ventures (JVs) and
wholly-owned subsidiaries (WoS) abroad during September 2017. Meanwhile, India
and Japan signed a pact to raise the scope of a bilateral currency swap
arrangement to a record $75 billion, aimed at bringing in greater stability in
the foreign exchange and capital markets, amid a slide in the rupee in recent
months. Moreover, a private report stated that India is Asia's most investment
savvy economy and more than two-thirds of the country's affluent class prefer
to use various investment products to achieve their financial goals and greater
social mobility. There will be some buzz in the sugar sector stocks with report
that the Indian Sugar Mills Association said India's sugar output in the
current 2018/19 season is expected to be lower than earlier expectations and
could drop further if more sugar gets diverted for ethanol production. The
sugar output is now seen at 32 million tonnes for the season that began on
October 1, down from its previous forecast of 35-35.5 million tonnes. Also,
there will be some reaction in aluminium industry related stocks with report
that the government is considering a proposal to increase import duty on
aluminium with a view to supporting domestic players. 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
|
10,250.85
|
10,089.03
|
10,343.98
|
BSE Sensex
|
34,067.40
|
33,554.60
|
34,367.40
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ICICI Bank
|
800.70
|
349.40
|
334.15
|
358.80
|
Yes Bank
|
523.32
|
181.30
|
175.40
|
186.55
|
SBI
|
377.68
|
267.90
|
254.45
|
275.30
|
Axis Bank
|
159.18
|
566.70
|
544.50
|
582.95
|
Tata Motors
|
141.72
|
175.35
|
169.87
|
178.67
|
SBI and Hitachi Payment Services have entered into an agreement to form a joint venture for establishing a card acceptance and digital payment platform.
Axis Bank has sold 4.95% stake in NSDL to its peer HDFC Bank for a consideration of Rs 163.34 crore.
ICICI Bank has reported 55.84% fall in its net profit at Rs 908.88 crore for Q2FY19 as compared to Rs 2,058.19 crore for Q2FY18.
Vedanta has received approval from Government of India for a ten-year extension of the PSC for the Rajasthan Block, RJ-ON-90/1.