Indian equity benchmarks showed a
volte-face on Wednesday as what started on a promising note ended as a dismal
show. The optimism in local markets petered out completely by the end of trade
and the benchmarks drifted into the negative territory despite getting off to a
gap-up opening. Sentiments remained subdued on the report that Global agency
Fitch Ratings retained the 'BBB-' sovereign rating-the lowest investment
grade-on India as weak public finances continue to constrain India's ratings.
The rating agency said that India's sovereign ratings balance a strong
medium-term growth outlook and favourable external balances with a weak fiscal
position and difficult business environment. Further, many investors remained
on the sidelines and refrained from any buying activity ahead of the US Federal
Reserve's policy outcome, due later today. The Fed is widely expected to stand
pat on interest rates, but the post meet statement of the Fed chair Janet
Yellen may offer hints on the possibility of a rate hike in June. Traders are
largely indulging in stock specific activity, tracking quarterly earnings
reports, sales and shipments data of automobile and cement companies, and other
corporate news. Meanwhile, market participants got some comfort with the report
that Prime Minister Narendra Modi is reviewing the progress of the government's
agenda to curb black-money and tax evasion as well as the roll out of the Goods
and Services Tax (GST). The government intends to implement the GST from July
1, 2017. Further, Asian Development Bank's (ADB's) Chief Economist Yasuyuki
Sawada said the reforms like the GST and the new bankruptcy law will make it
easier to do business in India. Finally, the BSE Sensex decreased 26.38 points
or 0.09% to 29894.80, while the CNX Nifty was down by 1.85 points or 0.02% to
9,311.95.
The US markets extending the
lackluster performance made a mixed closing on Wednesday, following the Federal
Reserve's monetary policy announcement. In a widely expected decision Federal
Reserve's left interest rates unchanged. After a two-day meeting, the Fed said
it decided to maintain the target range for the federal funds rate at $0.75 to
1 percent and said recent data indicates that the labor market has continued to
strengthen even as growth in economic activity slowed. The central bank also
reiterated that it expects economic conditions will evolve in a manner that
will warrant gradual increases in interest rates. The markets were in somber
mood from the beginning reacting to quarterly results from tech giant Apple,
which reported better than expected second quarter earnings but weaker than
expected revenues and iPhone shipments. On the economic front, payroll
processor ADP released a report showing that private sector employment
increased roughly in line with economist estimates in the month of April. ADP
said private sector employment climbed by 177,000 jobs in April after surging
up by a revised 255,000 in March. The Dow Jones Industrial Average added 8.01
points or 0.04 percent to 20,957.90, on the other hand the Nasdaq declined by
22.82 points or 0.37 percent to 6,072.55 and the S&P 500 ended lower by 3.04
points or 0.13 percent to 2,388.13.
Crude oil futures snapped their
losing streak on Wednesday despite mixed inventories report. Also as the
Federal Reserve on Wednesday voted unanimously to leave its benchmark interest
rate at 0.75% to 1%, but signaled another rate hike is imminent despite recent
economic weakness. Meanwhile, U.S. Energy Information Administration (EIA) said
domestic crude supplies fell by 900,000 barrels for the week ended April 28. Gasoline
inventories grew by only 0.191 million against expectations for a rise of 1.322
million barrels while distillate stockpiles fell by 0.562 million barrels. Investors
continued to monitor developments concerning a possible extension to an
OPEC-led deal to curb prices, after Russia reported that it has achieved its
reduction target a month ahead of schedule. Benchmark crude oil futures for
June delivery ended up by $0.16 or 0.3 percent to $ 47.82 on the New York
Mercantile Exchange. In London, Brent crude for June delivery ended higher by $
0.32 at $50.78 on the ICE.
Extending
its gains for the second straight session, Indian rupee strengthened on
Wednesday due to sustained selling of the US currency by exporters and banks. Some
support came with the report that the Reserve Bank of India (RBI) is expected
to hold the key rate at its monetary policy review next month but may opt for a
25 bps cut in August. However, dollar strengthened against some currencies
overseas and capped the rupee gains. On the global front, dollar inched up
against most major currencies on Wednesday, as investors eyed a U.S. Federal
Reserve statement later in the day for guidance on whether bets for a June
interest rate hike are justified. Finally, the rupee ended at 64.15, 6 paise
stronger from its previous close of 64.21 on Tuesday.
The
FIIs as per Wednesday'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
5682.40 crore against gross selling of Rs 6015.64 crore, while in the debt
segment, the gross purchase was of Rs 813.84 crore with gross sales of Rs
253.66 crore.
The US markets after remaining in
negative territory for most of the session made a mixed closing in the last
session after the Fed left the key interest rates unchanged but made a hawkish
policy statement, in a sign it was still on track for two more rate increases
this year. The Asian markets have made a mixed start taking cues from the US
markets, with traders in the region now pricing in a 72 per cent chance of a
June rate hike, from 63 per cent before the Fed's statement. Metal stocks are
under pressure in the region amid inventory concerns in industrial metals. The
Indian markets losing their momentum in second half made a modestly lower
ending in the last session, there was cautiousness ahead of the Fed's policy
decision, investors' also awaited a televised debate between France's
presidential rivals. Today, the start is likely to remain cautious as the Fed
may have maintained status quo on policy rate but downplayed weak first quarter
economic growth, indicating a further rate hike. There will be some support
with Asian Development Bank's report that the Indian economy will grow 7.4 per
cent this fiscal and 7.6 per cent in the next as the bankruptcy and GST laws
will help create a more business-friendly environment. The banking sector
stocks will be in action, as the Union Cabinet on Wednesday cleared an
ordinance to empower the Reserve Bank of India (RBI) to reduce bad debts of
public sector banks. The ordinance will empower the Reserve Bank to effectively
deal with the problem of mounting bad loans in the banking sector. The steel
sector too will be in action as the cabinet has given green signal to a new
policy that aims to achieve steel making capacity of 300 million tonnes by 2030
with an additional investment of Rs 10 lakh crore. The Cabinet also approved a
policy for use of domestic steel products in government organisations. There
will be lots of earnings reaction, especially in banking sector, to keep the
markets buzzing.
Support and Resistance: NSE
(Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9311.95
|
9291.47
|
9339.37
|
BSE Sensex
|
29894.80
|
29820.72
|
29994.74
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
ICICI Bank
|
220.05
|
272.75
|
270.32
|
276.12
|
SBI
|
139.51
|
289.80
|
286.00
|
293.40
|
Bank of Baroda
|
128.42
|
189.55
|
185.98
|
193.83
|
Hindalco
|
78.54
|
197.05
|
195.03
|
200.48
|
Axis bank
|
72.21
|
500.85
|
498.12
|
505.47
|
Bajaj Auto has registered a marginal fall of 0.09% in total sales to 329,800 units in April 2017 against 330,109 units in April 2016.
ICICI Bank has made 100 villages digitally-enabled in 2017 in 100 days. The Bank is planning to transform another 500 by December 2017.
Reliance Corporate IT Park, a subsidiary of Reliance Industries has signed a Memorandum of Understanding with SAP SE to launch 'SARAL GST' solution for taxpayers in the GST regime.
Wipro has unveiled its new brand identity which signifies a higher level of engagement and brand permission.