Wednesday
turned out to be a fabulous day of trade for the Indian equity benchmarks, with
frontline gauges garnering gains of around a percent on account of increased
buying in select stocks coupled with covering-up of pending short-positions
ahead of August month F&O expiry tomorrow. Market participants accumulated
quality stocks at reasonable valuations after yesterday's drubbing. Sentiments
remained optimistic since beginning, with key gauges making a gap-up opening
and trading jubilantly through the session after concerns about North Korea's
firing of a missile over Japan ebbed. Traders took some encouragement with
Finance Minister Arun Jaitley's statement that goods and services tax (GST)
collections have exceeded estimates in the first month of the landmark levy's
rollout, despite a significant number of assessees not having filed returns
yet. Finance Minister said that GST mopup in July pegged at Rs 92,283 crore and
could rise further. Some support also came with NITI Aayog's statement that
enhancing access to low-cost capital to businesses could serve as an important
vehicle for improving the business environment, especially in poor states like
Bihar. Markets extended rally in afternoon deals with Finance Ministry
expressing its confidence of meeting the 3.2% fiscal deficit target for the
financial year 2017-18, despite the low dividends from the Reserve Bank of
India (RBI) and muted proceeds from stake sales in public sector enterprises
till now. However, markets trimmed some of their gains in last leg of trade to
end off day's highs, as anxiety spread among the investors with ICRA's latest
report stating that the profitability of India Inc got hurt with the margins
contracting by as much as 1.80% to 15.7% on a year-on-year basis on account of
introduction of new tax regime. Some concerns also came with a private report
that India's economic growth is likely to remain soft and the GDP is expected
to grow by 6 per cent in April-June, down from 6.1 per cent in the preceding
quarter. Finally, the BSE Sensex soared 258.07
points or 0.82% to 31,646.46, while the CNX Nifty was up by 88.35 points or
0.90% to 9,884.40.
The US markets closed higher on
Wednesday, with the benchmark S&P 500 posting gains for a fourth straight
session after a pair of strong economic reports. Wednesday's advance was marked
by bouts of volatility triggered by ongoing tensions between the US and North
Korea. Federal Reserve Governor Jerome Powell said that the Federal Reserve
will continue to expect much more from ever before from directors of large
banks. Powell reminded that during the financial crisis, large banks incurred
massive losses from esoteric products that were not even on the radar of bank
boards. He said the Fed would work with bank directors who feel buried under
paper from regulations put in place post-crisis, but said the central bank
would not back away from requiring that bank boards be strong and effective. On
the economy front, the US economic rebound in the second quarter was stronger
than initially reported, as a lift to consumer spending and business investment
led to the strongest growth in more than two years. Gross domestic product rose
at 3% rate from April to June, up from an initial 2.6% reading. The economy
picked up from a 1.2% rate in the first quarter. A slow first quarter followed
by an improved second quarter also occurred in two of the past three years. The
last time the US economy had two quarters above 3% was in 2014. The Dow Jones
Industrial Average added 27.06 points or 0.12 percent to 21,892.43, the Nasdaq
gained 66.42 points or 1.05 percent to 6,368.31, and the S&P 500 edged
higher by 11.29 points or 0.46 percent to 2,457.59.
Crude oil futures continued its
weakness on Wednesday, as flooding from Tropical Storm Harvey continued to
batter US refinery capacity, offsetting data showing U.S. supplies of crude oil
fell for a ninth-straight week. Benchmark crude oil futures for October
delivery ended down by $0.48 or 1percent to $45.96 on the New York Mercantile
Exchange. In London, Brent crude for October delivery ended lower by 1.72
percent at $50.77 a barrel on the ICE.
Indian
rupee after making a positive start managed a modestly positive close on
Wednesday, recovering some ground from its last session fall, on back of
selling of American currency by banks and exporters. The domestic currency got
the support of dollar's weakness against major world currencies overseas. A
strong domestic equity market too propped up the rupee sentiment in early
trade, as the local markets made a strong come back from last session fall,
however the rupee pared most of the gains in final hours on increased month end
dollar demand from importers. On the global front, the dollar recovered from a
four-month low against the Japanese yen on Wednesday as investors' worries over
North Korea's latest missile test eased, boosting appetite for riskier assets. Finally,
the rupee ended at 64.01, 1 paise stronger from its previous close of 64.02 on
Tuesday.
The
FIIs as per Wednesday's data were net buyers in equity and debt segments both. In
equity segment, the gross buying was of Rs 4878.97 crore against gross selling
of Rs 4660.39 crore, while in the debt segment, the gross purchase was of Rs
1510.48 crore with gross sales of Rs 605.67 crore.
The US markets extended their
gains in the last session, some upbeat U.S. economic data, including a report
showing a jump in private sector employment supported the markets. Though the trading
activity was somewhat subdued, however, as traders seemed reluctant to make
significant moves. The Asian markets have made a mixed start and some indices
are down by over half a percent. Japanese market was up despite its industrial
production slowing in July from June, as continued strong exports and a cheap
yen indicated that the phase is temporary. The Indian markets made a smart come
back in the last session on easing geopolitical tensions, and the major
averages recovered most of their losses of previous session. Today, the start
of the F&O series expiry session is likely to be flat-to-cautious, as
tensions between the US and North Korea seemed to escalate. Trade may turn
choppy in the latter trade as the traders will be rolling over their positions
to the next series. There will be some concern with assessment of RBI in its
annual report that fiscal consolidation may come under threat at the central
and state levels due to the immediate effects of the goods and service tax
(GST), loan waivers and pay revisions, putting pressure on the overall growth
matrix. Traders will be getting some support with Finance Minister Arun
Jaitley's statement that the Goods and Services Tax (GST) is bound to impact
the direct tax collection as well due to the increased detection technology and
greater compliance. The Finance Minister also said that even before GST was
rolled out, the impact of demonetisation has expanded the number of assessees
under the personal income tax. The auto stocks will keep buzzing with the Union
Cabinet approval of promulgation of an Ordinance that would allow the GST
Council to hike the maximum rate of compensation cess on large and luxury
vehicles to 25 per cent from the current cap of 15 per cent.
Support and Resistance: NSE (Nifty) and BSE
(Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9884.40
|
9853.65
|
9912.30
|
BSE Sensex
|
31646.46
|
31543.66
|
31738.62
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
NTPC
|
207.15
|
167.95
|
165.35
|
170.95
|
Hindalco
|
126.85
|
236.35
|
231.77
|
239.32
|
Bank of Baroda
|
116.04
|
139.45
|
138.30
|
141.35
|
IOC
|
87.48
|
452.85
|
442.13
|
459.23
|
ICICI Bank
|
85.52
|
300.30
|
299.03
|
301.93
|
HCL Technologies has opened a new delivery centre in Gothenburg, Sweden.
IOC will invest Rs 32,000 crore to ramp up its output by fiscal 2021 in order to meet the rising demand for petrochemicals.
WGS, a Wipro company has released its enhanced Home Mortgage Disclosure Act functionality in NetOxygen.
Reliance Industries has proposed to make an offer for issuance of Non-convertible Debentures (NCDs Series B) (2nd Tranche) on private placement basis aggregating Rs 2,500 crore.