Bears made a comeback over the
Dalal Street on Thursday, with Sensex & Nifty ending lower by around 300
& 100 points, respectively. After a weak start, indices remained under
pressure, as India Ratings and Research (Ind-Ra) said that state government
finances may continue witnessing revenue pressure in financial year 2020-21
(FY21) on account of subdued economic growth. The agency has cut its outlook on
state finances to stable-to-negative for FY21 from stable, citing higher
revenue expenditure and outstanding GST compensation. Negative cues from the
global markets also hampered domestic sentiments. Bourses lingered in red
terrain throughout the day, after industry body FICCI's statement that its
Economic Outlook Survey has projected the country's annual median GDP growth
for 2019-20 at 5%. The survey has put the median growth forecast for
agriculture and allied activities at 2.6% for 2019-20, the industry and
services sector at 3.5% and 7.2%, respectively, during the current year. Market
participants paid no heed towards a private report stating that Finance
Minister Nirmala Sitharaman's efforts to revive the economy have started to
appear on the ground, helping to regain the lost momentum of the GDP. Finally,
the BSE Sensex slipped 284.84 points or 0.69% to 40,913.82, while the CNX Nifty
was down by 93.70 points or 0.77% to 12,035.80.
The US markets ended higher on
Thursday after the World Health Organization (WHO) declared the coronavirus
outbreak a global health emergency. Earlier in the day, the US confirmed its
first human-to human transmission of the virus, which has killed 171 people in
China and has spread to as many as 18 other countries. The virus has reportedly
infected more than 8,100 people so far, outnumbering the infections saw during
the entire SARS outbreak of 2002 and 2003. WHO Director-General Tedros Adhanom
Ghebryesus said that the organization
witnessed the emergence of a previously unknown pathogen that has resulted in
an unprecedented outbreak and that it is time to act together to limit the
spread. On the economic data front, US economic growth in the fourth quarter
continued at the same pace as in the previous quarter, according to a report
released by the Commerce Department. The Commerce Department said real gross
domestic product climbed by 2.1 percent in the fourth quarter, unchanged from
the third quarter and in line with street estimates. The fourth quarter GDP
growth reflected positive contributions from consumer spending, government
spending, residential fixed investment, and exports as well as a decrease in
imports, which are a subtraction in the calculation of GDP. Besides, a report
released by the Labor Department showed first-time claims for US unemployment
benefits decreased from an upwardly revised level in the week ended January 25.
The report said initial jobless claims fell to 216,000, a decrease of 7,000
from the previous week's revised level of 223,000.
Crude oil futures ended lower
with cut of over two percent on Thursday as worries rise over the potential
economic impact from the continued spread of the coronavirus. Chinese
authorities said more than 7,700 people have been infected, with at least 170
dead. Meanwhile, World Health Organization (WHO) declared that coronavirus is a
public health emergency of international concern. WHO officials expressed great
concern over the virus's spread outside of China. Besides, a number of
international flights to China have been canceled and if this trend continues
in the coming days and weeks it will likely only deepen demand concerns. Crude
oil futures for March dropped $1.19 or 2.2 percent to settle at $52.14 a barrel
on the New York Mercantile Exchange. March Brent fell $1.52 or 2.5 percent to
settle at $58.29 a barrel on London's Intercontinental Exchange.
Indian
rupee depreciated against the American currency on Thursday, due to fresh
dollar demand from banks and importers. Sentiments remained down-beat as India
Ratings and Research (Ind-Ra) expects aggregate fiscal deficit of the states to
come close to 3% of gross domestic product in FY21. In its note, it has revised
the outlook on state finances to stable-to-negative for FY21 from stable.
Market participants also remained cautious ahead of the Union Budget that will
be released later this week. The weak trade in the local equity market along
with dollar's strengthen against some other currencies also adversely impacted
local forex trade. On the global front, dollar held near a two-month high
against a basket of major currencies on Thursday as investors tried to shield
themselves from assets that could be hit by China's virus epidemic. Finally,
the last traded price of rupee was 71.49, 22 paise weaker from its previous
close of 71.27 on Wednesday.
The
FIIs as per Thursday'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
4985.68 crore against gross selling of Rs 6427.93 crore, while in the debt
segment, the gross purchase was of Rs 75582.37 crore with gross sales of Rs
1694.99 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.54
crore against gross selling of Rs 10.52 crore.
The US markets ended higher on
Thursday as investors decided to look past fears about the economic impact of
the coronavirus epidemic and focus on a spate of positive earnings reports.
Asian markets are trading mostly in green on Friday as investors clutched at
hopes China could contain the coronavirus, even as headlines spoke of more
cases and more deaths. Indian markets ended lower on Thursday with cut of over
half a percent each tracking global markets, amid concerns over the impact of
coronavirus on global economy. Today, the markets are likely to make slightly
positive start ahead of Economic survey to be out later in the day and the
Union Budget due tomorrow. Positive leads from global markets and more than 2
percent fall in oil prices on Thursday are likely to aid domestic sentiments.
Investors will also keep an eye on the economic data like core sector data
which will be out later in the day. Some support will come with report that the
government is aiming at $80 billion of jewellery exports in the next five years
from the present level of $40 billion. The Centre also expects the jewellery
industry to generate additional employment of 2 million. Besides, the seventh
tranche of CPSE ETF received bids worth Rs 9,200 crore on Thursday from
institutional investors in its anchor book. The government has floated the
fresh tranche of the CPSE ETF with the view of raising at least Rs 10,000
crore. Traders may take note of Niti Aayog vice-chairman Rajiv Kumar's
statement that the government should focus on alternate measures to stimulate
economy as it is not possible to give fiscal stimulus. Kumar also said
growth-enhancing measures are the need of the hour to achieve India's potential
growth rate of 7-8 per cent per annum. He attributed the current slowdown to
low investment, muted consumption expenditure and lagging exports. Meanwhile,
An Irdai panel has suggested the introduction of daily premium payment policies
to deepen insurance penetration in low-income groups. Telecom stocks will be in
focus as industry body COAI is pitching for a 10-15 year payment schedule for
telecom companies to pay their past statutory dues, beginning with part-payment
upfront and a two-year moratorium. There will be some reaction in aviation
stocks with credit rating agency ICRA's statement that the domestic airline
industry is expected to post a net loss of about Rs 7,800 crore in fiscal 2020
as against an estimated net loss of approximately Rs 10,000 crore in fiscal
2019. There will be lots of earnings announcements too, to keep the markets in
action.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
12,035.80
|
11,980.83
|
12,120.53
|
BSE Sensex
|
40,913.82
|
40,702.44
|
41,252.67
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,505.56
|
39.05
|
38.12
|
40.42
|
Tata Motors
|
709.01
|
186.20
|
182.78
|
191.08
|
SBI
|
358.02
|
310.70
|
305.32
|
316.42
|
IOC
|
280.05
|
117.15
|
115.58
|
119.33
|
ONGC
|
211.43
|
115.60
|
114.55
|
117.10
|
L&T's construction arm -- L&T Construction's Water and Effluent Treatment business has secured a prestigious EPC order from NVDA to execute the Indira Sagar - Parwati Phase III and IV Lift Micro Irrigation Project.
Axis Bank has raised Rs 4,175 crore through the allotment of 41,750 Senior Unsecured Redeemable NCDs of the face value of Rs 10 lakh each on a private placement basis.
ZEE5, a video on demand website run by Zee Entertainment Enterprises, has tied up with Eduauraa to offer educational content to users through its platform.
Infosys has signed a multi-year, multi-million contract with ABN AMRO Bank to accelerate its cloud and DevOps transformation journey.