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NSE Intra-day chart (01 January 2020)
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Market Commentary 02 January 2020
Markets to get slightly positive start tracking Asian peers

 

Indian equity markets started the New Year 2020 on muted note, with benchmark indices Sensex & Nifty logging marginal gains. The day started on a fabulous note, after Reserve Bank of India said India's current account deficit, a difference between foreign exchange inflows and outflows, narrowed to 0.9 per cent of gross domestic product, or $6.3 billion, in second quarter of current financial year, on account of lower trade deficit. Sentiments also remained positive, as the PHD Chamber of Commerce and Industry (PHDCCI) expects India's economy to rebound in 2020 and inflation to remain benign on account of reforms such as reduction in corporate tax. In noon deals, volatility hit over the street, as the country's fiscal deficit hit 114.8 per cent of 2019-20 budget estimate at Rs 8.07 lakh crore at the end of November, while the growth of eight core infrastructure industries contracted for the fourth consecutive month in November 2019 by 1.5 percent, as compared to same period of last year. However, bourses managed to keep their heads above neutral lines throughout the day, aided with a survey report that with bullish hiring sentiments, private sector players are likely to create seven lakh jobs and the overall increase in salaries is projected to be around 8 percent in the New Year. Finally, the BSE Sensex gained 52.28 points or 0.13% to 41306.02, while the CNX Nifty was up by 14.05 points or 0.12% to 12182.50.

 

The US markets remained closed on Wednesday on account of New Year's Day holiday.

 

Erasing all of its initial losses, Indian rupee ended higher against dollar on the first day of Calendar Year 2020, on selling of dollars by banks and exporters. Traders took some support with report that India's current account deficit (CAD) narrowed to 0.9 per cent of GDP, or $6.3 billion, in the September 2019 quarter, on account of lower trade deficit. It had stood at 2.9 per cent of gross domestic product (GDP), or $19 billion, in the corresponding quarter of 2018-19. On a sequential basis, CAD had printed 2 per cent of GDP, or $14.2 billion, in the June 2019 quarter. Some support also came as the PHD Chamber of Commerce and Industry (PHDCCI) expects India's economy to rebound in 2020 and inflation to remain benign on account of reforms such as reduction in corporate tax. However, gains remain capped with Controller General of Accounts in its latest data showing that Fiscal deficit of the Union government rose to 114.8 per cent of the target in the first eight months of the fiscal year. Finally, the rupee ended at 71.22, 14 paise stronger from its previous close of 71.36 on Tuesday.

 

The FIIs as per Wednesday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 1496.50 crore against gross selling of Rs 3468.68 crore, while in the debt segment, the gross purchase was of Rs 1291.07 crore with gross sales of Rs 1834.45 crore. Besides in the hybrid segment, the gross buying was of Rs 0.03 crore against gross selling of Rs 8.66 crore.

 

The US markets remained closed on Wednesday for the New Year's Day holiday. Asian markets are trading mostly in green on Thursday buoyed by Chinese markets after Beijing eased monetary policy to support slowing growth. Indian markets ended slightly higher on Wednesday amid lack of cues from other global markets. Today, the start of session is likely to be flat-to-positive tracking positive leads from Asian peers. Investors will also eyeing the release of Markit Manufacturing PMI for December which will be released later in the day. Traders will be taking encouragement with government data showing that Goods and Services Tax (GST) revenue collection remained above Rs 1 lakh crore mark for the second month in a row with December mop-up rising to Rs 1.03 lakh crore as compared to the year-ago period. Some support will also come with the commerce and industry ministry data showing that foreign direct investment (FDI) into India grew 15% to $26 billion during the first half of the current financial year. Inflow of FDI during April-September of 2018-19 stood at $22.66 billion. However, there may be some cautiousness with a private report that India will struggle to achieve 5% GDP growth in 2020 as the significant deceleration in past few quarters was largely owing to credit squeeze which is a cyclical problem. Also, traders may be concerned with report that as many as 388 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of more than Rs 4 lakh crore owing to delays and other reasons. There will be some buzz in the NBFCs stocks as the Reserve Bank of India (RBI) has extended, for another six months, existing relaxations for securitization of assets by non-banking financial companies (NBFCs). The move is expected to provide NBFCs with some more breathing space to repair their broken balance-sheets by selling assets and improving liquidity. There will be some reaction in jewellery stocks with ICRA's report that Jewellery demand is expected to decline by 6-8% in terms of volume following high gold prices and weak consumer demand in 2019-20. Auto stocks will be in focus reaction to their monthly sales numbers. Also, there will be some buzz in the aviation stocks with report that Aviation Turbine Fuel (ATF) prices were increased by 2.6% on January 01 to Rs 64,323.76 per kilolitre from Rs 62,686.51 per kiloliter.

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

12,182.50

12,157.80

12,214.70

BSE Sensex

41,306.02

41,223.63

41,415.97

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

1,022.92

46.65

46.27

47.27

Tata Motors

259.68

184.45

183.13

186.23

SBI

173.79

334.45

332.42

336.22

Vedanta

142.67

154.60

152.32

156.02

Tata Steel

121.01

467.75

462.87

474.57

 

  • Coal India's subsidiary -- Mahanadi Coalfields has achieved a new record in production with an output of 6.97 lakh tonne in a day. 
  • Maruti Suzuki India has reported total sales of 133,296 units in December 2019, as compared 128,338 units in December 2018, registering rise of 3.9%. 
  • TCS has successfully completed an Oracle HCM Cloud transformation for Extreme Networks.  
  • M&M has reported auto sales performance for December 2019 which stood at 39,230 vehicles, compared to 39,755 vehicles during December 2018, registering a fall of 1.32%.
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