Bulls rejuvenate on Dalal Street
post Diwali session and markets rallied around one and a half percent on
Tuesday. The investors' mood remained up-beat throughout the day and there
appeared not even an iota of profit booking, as investors continued hunt for
fundamentally strong stocks. Soon after making marginal positive start, markets
gained traction as traders took some encouragement with the Reserve Bank's
statement that continuing its northward surge, India's forex kitty has swelled
by $1.039 billion to a new life-time high of $440.751 billion for the week
ended October 18. Some support also came with World Bank group President David
Malpass' statement that India must undertake financial reforms in three key
areas like sound regulations for non-banking financial companies (NBFCs), allow
private sector banks in a big way in the banking sector and deepen capital
market to aide growth. Adding optimism, Central Board of Indirect Taxes and
Customs (CBIC) favored extending incentives based on parameters like job
creation and committed investments across the country. Markets extended gains
and settled above their crucial 39,800 (Sensex) and 11,750 (Nifty) levels with
a report that Prime Minister Narendra Modi embarked on a two-day visit to Saudi
Arabia to help draw investments and bolster bilateral ties, with a dozen
agreements expected to be signed in sectors, including energy, Defence
procurement and civil aviation. Besides, Union Steel Minister Dharmendra
Pradhan said that India will spend about $1.4 trillion on its infrastructure
development in the next five years. Meanwhile, urging government to probe the
business model of e-commerce majors, the Confederation of All India Traders
(CAIT) has said that deep discounts on products by them are causing loss of
Goods and Services Tax (GST) revenue to the Centre and state governments.
However, traders ignored a private report that declining for the fourth
consecutive month, consumer confidence in the month of October nosedived by
3.5% tracking pessimism around jobs, economy, finances, and investment.
Finally, the BSE Sensex gained 581.64 points or 1.48% to 39,831.84, while the
CNX Nifty was up by 159.70 points or 1.37% to 11,786.85.
The US markets ended choppy
trading session slightly in red on Tuesday as traders seemed reluctant to make
significant moves ahead of the Federal Reserve's highly anticipated monetary
policy announcement on Wednesday. Traders took a wait-and-see approach even
though the Fed is widely expected to cut interest rates by another quarter
point. Some pessimism came amid report suggesting a phase one trade deal
between the US and China may not be signed by a summit in Chile next month. A
US administration official noted a failure to sign the deal by the summit just
means more time is needed. A mixed reaction to the latest batch of earnings
news also contributed to the lackluster performance, with a notable drop by
Google parent Alphabet (GOOGL) weighing on the tech-heavy Nasdaq. Alphabet
reported third quarter earnings that missed street estimates. On the economic
front, the Conference Board released a report showing consumer confidence
unexpectedly edged lower in the month of October, although the drop came from
an upwardly revised level in the previous month. The Conference Board said its
consumer confidence index dipped to 125.9 in October from an upwardly revised
126.3 in September. Street had expected the consumer confidence index to climb
to 128.5 in October from the 125.1 originally reported for the previous month.
Meanwhile, a separate report released by the National Association of Realtors
(NAR) on Tuesday showed another significant increase in pending home sales in
the US in the month of September. NAR said its pending home sales surged up by
1.5 percent 108.7 in September after spiking by 1.4 percent to a revised 107.1
August. Street had expected pending home sales to climb by 0.9 percent.
Crude oil futures ended lower for
second straight session on Tuesday amid expectation of notable jump in crude
inventories and as remarks from a Russian government official suggested that he
believed it was too early to discuss deeper production cuts as part of its
agreement with the Organization of the Petroleum Exporting Countries. The
Energy Information Administration's (EIA) data is due out on Wednesday. Before
that, the American Petroleum Institute (API) will release its weekly oil report
after oil futures settle. Besides, after last week's steep rise, a bit of
profit taking too contributed to oil's decline in Tuesday's session. Also,
recent data showing a drop in profits of China's industrial firms weighed on the
prices. Benchmark crude oil futures for December declined 27 cents or 0.5
percent to settle at $55.54 a barrel on the New York Mercantile Exchange.
However, December Brent gained 2 cents or 0.03 percent to settle at $61.59 a
barrel on London's Intercontinental Exchange.
Giving up most of their early
gains, Indian rupee ended slightly higher against dollar on Tuesday on account
of selling of US dollar by bankers and exporters. Besides, rally in domestic
equity markets added support to the local unit. Moreover, easing crude prices
and gains in other Asian currencies also supported the rupee. Some support also
came with the Reserve Bank's statement that continuing its northward surge,
India's forex kitty has swelled by $1.039 billion to a new life-time high of
$440.751 billion for the week ended October 18. Besides, in the special Muhurat
trading session, foreign institutional investors remained net buyers in the
capital markets, putting in Rs 6.61 crore on October 27. On the global front,
Sterling fell towards a ten-day low against the dollar as investors waited for
Prime Minister Boris Johnson's next attempt to push for a General Election.
Finally, the rupee ended at 70.84, 6 paise stronger from its previous close of
70.90 on Friday.
The FIIs as per Tuesday'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 5389.50 crore against gross
selling of Rs 5797.43 crore, while in the debt segment, the gross purchase was of
Rs 2108.36 crore with gross sales of Rs 673.64 crore. Besides in the hybrid
segment, the gross buying was of Rs 3.59 crore against gross selling of Rs 0.59
crore.
The US markets ended lower on
Tuesday as investors looked ahead to key Federal Reserve meeting. Asian markets
are trading mostly in red on Wednesday as the prospect of a rate cut by the
Federal Reserve was countered by worries that Sino-US first-stage trade deal
could be delayed. Indian markets rallied on Tuesday with gains of over one
percent each, led by the strong buying in auto and metal index. Today, the
markets are likely to make a flat-to-positive start amid fall in crude oil
prices. Traders will be taking encouragement with report that the Department
for Promotion of Industry and Internal Trade (DPIIT) has kickstarted an
exercise to relax India's foreign direct investment (FDI) norms. The department
held an inter-ministerial meeting to discuss further opening up in sectors,
especially where 100% FDI is not allowed on the automatic route. Some support may
come with report that the finance ministry and regulators are reviewing the
possibility of scrapping the dividend distribution tax (DDT) in a bid to regain
investor confidence in the equity markets. It is also considering
rationalisation of the long-term capital gains (LTCG) taxation structure by
classifying three asset classes against six at present. Traders may take note
of report that Prime Minister Narendra Modi called upon global investors to
benefit from India's vibrant start-up ecosystem, which stands as the
third-largest in the world, adding that he firmly believes that any investment
in India's innovation sector would yield huge returns. However, weak global
cues may weight on market sentiments. Telecom stocks will in focus amid report
that the Centre has set up a Committee of Secretaries under the cabinet
secretary to suggest measures to alleviate financial stress in the telecom
sector. The committee will look at ways of creating a favourable investment
environment for the sector. There will be some reaction in oil & gas stocks
with Prime Minister Narendra Modi's statement that India will invest $100
billion in oil and gas infrastructure to meet energy needs of an economy that
is being targeted to nearly double in five years, as he sought investment from
oil kingpin Saudi Arabia and other nations to boost supplies. There will be
some buzz in the metal stocks with report that India's steel production growth
rate slowed down to a 5-month low of 1.6% in September this year due to the
slump in key sectors like automobiles, consumer durables and a decline in
spending on infrastructure. There will be lots of earnings reaction based on
the performance of the companies.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,786.85
|
11,673.00
|
11,855.05
|
BSE Sensex
|
39,831.84
|
39,418.30
|
40,081.19
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
3,686.11
|
58.15
|
54.20
|
61.00
|
Tata Motors
|
1,844.36
|
172.45
|
157.27
|
181.57
|
SBI
|
510.34
|
280.65
|
277.80
|
284.25
|
Bharti Airtel
|
362.32
|
359.90
|
353.45
|
366.00
|
ICICI Bank
|
336.86
|
477.40
|
468.83
|
483.98
|
M&M's subsidiary -- Mahindra Two Wheelers Europe is planning to acquire 100% ownership of Peugeot Motocycles.
Reliance Industries has received an approval from board of directors for the formation of wholly-owned digital services subsidiary with a capital infusion of Rs 1.08 lakh crore.
NTPC has entered into a Joint Venture & Shareholders Agreement with the Ceylon Electricity Board for incorporation of 50:50 Joint Venture Company at Kerawalapitiya, Sri Lanka.
ICICI Bank has exited the GST Network by selling its entire 10 per cent stake to as many as 13 state governments.