Friday turned out to be an awful
day of trade for Indian equity benchmarks, with frontline gauges tumbling below
their crucial 10,800 (Nifty) and 35,100 (Sensex) levels, as traders took
beating on the back of several announcements made yesterday in his speech by
Finance Minister Arun Jaitley during Union Budget 2018. After making a gap-down
opening, markets never looked confidant and extended their southward journey to
end at day's lows. The Finance Minister's proposal to levy long-term capital
gains tax (LTCG) on equities investments mainly dampened sentiment. This move
may reduce incentive for investors to hold equities for longer term as the
difference between tax on short and long term capital gains is only 5%.
Besides, the imposition of a fresh tax on income from Mutual Funds could also
have spooked investors. Sentiments also remained dampened on report that
India's fiscal deficit, for nine months of Financial Year 2018, stands at Rs
6,20,949 crore, overshooting the budgeted estimate (BE) target by 113.6%. The
government has estimated Rs 5,46,532 crore of fiscal deficit for FY18 which
during the same period of the last year stood negative at 93.9%. Markets
extended southward journey after Fitch Ratings said that high debt burden of
the government constrains India's rating upgrade, a day after Finance Minister
Arun Jaitley projecting a fiscal deficit of 3.5% of GDP against the earlier
target of 3.2%. The report enlightened that weak public finances constrain
India's sovereign ratings, given a high general government debt burden of
around 68% of GDP and a wide fiscal balance of 6.5% of GDP if states are
included. Traders failed to draw any solace with Finance Minister Arun
Jaitley's statement that India's $2.5 trillion economy is now firmly on course
to register a strong growth rate of over 8% and indicated that the country has
grown on an average of 7.5% in the first three years of the Modi government. Finally,
the BSE Sensex tumbled 839.91 points or 2.34% to 35,066.75, while the CNX Nifty
was down by 256.30 points or 2.33% to 10,760.60.
The US markets tumbled on Friday,
with the main benchmarks suffering their biggest one-day drops in more than a
year and posting the steepest weekly losses in about two years. The selling,
which traders called orderly, continued throughout the session, as investors
digested a stronger-than-expected jobs report that stoked inflation fears and
contributed to a continued rise in bond yields. Meanwhile, outgoing Federal
Reserve Bank Chair Janet Yellen said that solid economic growth, faster wage
increases, and a tightening labor market mean the US central bank is likely to
need to continue to raise interest rates gradually, as it has signaled it will.
Separately, San Francisco Federal Reserve Bank President John Williams said
that a pickup in wage growth and inflation are signs of a healthy economy and
at this point are not enough to force the US Federal Reserve to raise rates much
more this year than the three times it has been signaling. On the economy
front, the University of Michigan's consumer sentiment index fell slightly in
January but remained near a post-recession high, reflecting an optimistic
outlook by Americans buoyed by record stock-market gains and recent tax cuts. The
Dow Jones Industrial Average lost 665.75 points or 2.54 percent to 25,520.96,
the Nasdaq dropped 144.917 points or 1.96 percent to 7,240.95, the S&P 500
edged lower by 59.85 points or 2.12 percent to 2,762.13.
Crude oil prices settled lower on
Friday as data pointing to signs of rising output weighed on sentiment.
According to data from energy services firm Baker Hughes, the number of oil
rigs operating in the US rose by six to 765, the highest level since August 11.
Besides, the dollar surged following strong US jobs numbers also dampened the
sentiments. The dollar rose after US jobs growth surged in January and wages
rose, recording their largest annual gain in more than 8-1/2 years. Though,
compliance with output cuts by OPEC and rising global demand kept much of the
early year oil rally in place. Benchmark crude oil futures for March delivery
decreased 35 cents at $65.45 a barrel on the New York Mercantile Exchange.
Brent crude lost 1.65% to $68.50 a barrel on London's Intercontinental
Exchange.
Indian
rupee pared all of its gains and ended marginally weaker against dollar on
Friday, on the back of heavy capital outflows from the domestic equity market.
Investors remained worried with a report that India's fiscal deficit, for nine
months of Financial Year 2018, stands at Rs 6,20,949 crore, overshooting the
budgeted estimate (BE) target by 113.6%. The government has estimated Rs
5,46,532 crore of fiscal deficit for FY18 which during the same period of the
last year stood negative at 93.9%. Besides, the dollar rose to a position of
strength overseas too made the rupee weaker. On the global front, dollar ticked
up against a basket of currencies, ahead of hotly anticipated US non-farm
payrolls data later, which will be closely watched for clues on the outlook for
US interest rates. Finally, the rupee ended at 64.06, 4 paise weaker from its
previous close of 64.02 on Thursday.
The
FIIs as per Friday's data were net buyers in equity and debt segments both. In
equity segment, the gross buying was of Rs 7721.20 crore against gross selling
of Rs 6555.36 crore, while in the debt segment, the gross purchase was of Rs
2586.62 crore with gross sales of Rs 1288.44 crore. Besides, in the hybrid
segment, there was no buying against gross selling of Rs 0.38 crore.
The US markets witnessed
slaughter on Friday and with major indices went home with a cut of over two
percent, as traders remained concerned about higher interest rates came after
the Labor Department released a report showing stronger than expected job
growth and a jump in wages. Asian indices were trading in red following large
declines in the U.S. and Europe on Friday. Also, investors were worried that
rising inflation could prompt central banks to tighten monetary policy faster
than expected. Indian shares witnessed bloodbath on Friday, as rising oil
prices, fiscal deficit woes and the Budget proposal to levy long-term capital
gains tax on equities raised concerns over reduced capital inflows into the
stock market. Today, the start is likely to be on the negative side amid weak
global cues. Traders will remained concerned with Fitch Ratings' statement that
high debt burden of the government constrains India's rating upgrade, after
Finance Minister Arun Jaitley projecting a fiscal deficit of 3.5 per cent of
GDP against the earlier target of 3.2 per cent. Meanwhile, Arun Jaitley said that
the economy has entered into a phase of consolidation after a series of structural
reforms which were initiated in the past two years. Some support may come later
in the day with Agriculture Secretary, SK Pattanayak's statement that he is
confident that the sector will continue to grow at over six percent in FY19. He
also talked about the government's plan to tap global market for agricultural
products and added that the export policy on producing enough for domestic and
cater to international markets is going to be put in place. Stocks related to
chemical sector will be in focus after the government planning to impose
antidumping duty on import of a chemical, used in industries like plastics,
from four countries, including China, for three years to guard domestic players
from cheap shipments. There will be lots of important earnings announcements
too, to keep the markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,760.60
|
10679.48
|
10898.33
|
BSE Sensex
|
35066.75
|
34802.73
|
35534.45
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
ITC
|
350.08
|
275.35
|
268.88
|
283.73
|
SBI
|
232.75
|
297.35
|
293.32
|
303.57
|
Hindalco
|
217.37
|
249.85
|
243.18
|
259.08
|
ICICI Bank
|
169.58
|
335.10
|
331.30
|
341.30
|
Yes Bank
|
162.99
|
349.05
|
341.90
|
356.10
|
Bajaj Auto has registered a jump of 46% in total sales to 3,53,147 units in January 2018 against 2,41,917 units in January 2017.
Lupin has launched Clobetasol Propionate Lotion 0.05% having received an approval from the USFDA earlier.
Yes Bank has received an approval for issuance and allotment of fixed rate notes for an aggregate principal amount of $600 million under the MTN Programme.
Coal India has reported provisional production of 56.69 MT in January 2018, as against a target of 63.32 MT.