Wednesday's session turned-out to
be a dismal day of trade for Indian equity benchmarks, where frontline gauges
ended the day with a cut of over a percent, breaching their crucial 33,100
(Sensex) and 10,150 (Nifty) levels, as trade war fears escalated after China
announced 25% tariff on 106 products in 14 categories imported from the US,
including soybeans, automobiles and chemicals. Markets started the session on
positive note with traders taking some encouragement from Finance Minister Arun
Jaitley's statement that direct tax collection has grown by 18 per cent to
cross Rs 10.02 trillion in the financial year ended on March 31, 2018. He said
demonetisation and GST implementation have resulted in higher formalisation of
the economy which is evident from additional 10 million IT returns being filed
in the previous financial year. The sentiments also remained upbeat on private
weather forecasting agency report that monsoon rains in India are expected to
be average in 2018, raising prospects of higher farm and economic growth in the
$2 trillion economy. The report added that monsoon rains are expected to be 100
percent of the long-term average. However, markets pared all of their initial
gains and entered into red terrain as traders turned anxious on report that the
Reserve Bank of India (RBI) is unlikely to yield to the India Inc's pressure
for a benign monetary policy stance by keeping policy rates unchanged in its
first monetary policy review of 2018-19 to be announced on Thursday against the
backdrop of hardening global crude oil prices. Some concerns also came with the
Andhra Pradesh government's statement that the Centre grossly failed in
effectively implementing the Goods and Services Tax and accused it of
sidetracking the new taxation system. The market participants also took note
of Chief Economic Advisor Arvind Subramanian's statement that it is easy to
advocate one uniform GST rates for all goods, but it cannot be done ignoring
political realities. Finally, the BSE Sensex declined 351.56 points or 1.05% to
33,019.07, while the CNX Nifty was down by 116.60 points or 1.14% to 10,128.40.
The US markets closed higher on
Wednesday, in the latest example of heavy intraday volatility as investors
continued to suss out the likelihood of, or the potential impact from, a trade
war between the United States and China. St. Louis Fed President James Bullard
said that the US Federal Reserve does not need to raise its benchmark interest
rate much further given how close it is to the neutral rate. Bullard added that
it is not necessary to raise the policy rate further in order to put downward
pressure on inflation, since inflation is already below target. Bullard, who
does not have a vote on the Fed's interest rate policy this year, has become
critical of the central bank's plans to continue to raise rates as it seeks to
normalize short-term borrowing costs amid a strong economy. On the economy
front, private-sector employers expanded their workforce by a seasonally
adjusted 241,000 jobs last month, Automatic Data Processing Inc. reported. This
is the fifth straight gain above 200,000. According to data on 10 major
industries tracked by ADP, professional/business services and
trade/transportation/utilities posted the largest hiring gains in March
followed by construction and manufacturing. By company size, small firms added
47,000 jobs in March, medium-sized businesses added 127,000 and large companies
added 67,000. February's gain was upwardly revised to show 246,000 growth
instead of a previously estimated 235,000. The Dow Jones Industrial Average
added 230.94 points or 0.96 percent to 24,264.30, the Nasdaq gained 100.825
points or 1.45 percent to 7,042.11, while the S&P 500 was up by 30.24
points or 1.16 percent to 2,644.69.
Crude oil futures edged slightly
lower on Wednesday on concerns over an escalating trade war between the U.S.
and China. However, the decline was trimmed after government data showed an
unexpected drop in U.S. crude inventories. Oil trimmed its decline after the
U.S. Energy Information Administration (EIA) released its weekly petroleum
status report showing that U.S. commercial crude inventories decreased by 4.6
million barrels last week. That's roughly in line with yesterday's report from
the American Petroleum Institute, which reported a draw of 3.3 million barrels.
Benchmark crude oil futures for May delivery declined 14 cents or 0.2 percent
to settle at $63.37 a barrel on the New York Mercantile Exchange. May Brent
crude lost 10 cents 0.2 percent to settle at $68.02 a barrel on London's
Intercontinental Exchange.
Indian
rupee turned weak against the dollar on Wednesday, on sustained buying of the
US currency by importers and banks. The market sentiment remained cautious
ahead of RBI's two-day policy meet outcome. The first bi-monthly monetary
policy review for FY19 is to be announced by the RBI on April 5. Investors even
overlooked private weather forecasting agency report that monsoon rains in
India are expected to be average in 2018, raising prospects of higher farm and
economic growth in the $2 trillion economy. The report added that monsoon rains
are expected to be 100 percent of the long-term average. Besides, heavy selling
in last hour of trade in the domestic equity markets too weighed on the rupee,
but dollar's reduced clout against other currencies overseas helped to cap the
losses in rupee. On the global front, U.S. dollar pulled lower on Wednesday,
after China took further trade retaliatory measures against the US today,
imposing a 25% import tariff on key US products. Finally, the rupee ended at
65.14, 12 paise weaker from its previous close of 65.02 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in equity and debt segments both, in equity segment, the gross
buying was of Rs 5478.65 crore against gross selling of Rs 5953.63 crore, while
in the debt segment, the gross purchase was of Rs 1101.31 crore with gross
sales of Rs 1803.37 crore. Besides, in the hybrid segment, the gross buying was
of Rs 10.84 crore against gross selling of Rs 0.97 crore.
Stocks showed a substantial
turnaround over the course of the trading session on Wednesday after moving
sharply lower at the open. The rebound on Wall Street came as traders shrugged
off trade war concerns after China issued a list of 106 U.S. products that will
be subject to additional tariffs. Asian markets are trading mostly in green as
investors welcomed signals the U.S. and China are open to negotiations rather
than escalating threatened tit-for-tat trade tariffs. Indian markets gave up
early gains to end sharply lower on Wednesday amid persisting worries about
global trade war. Today, the markets are likely to make positive start on
Thursday, tracking firm global cues. Traders will be getting support with
report that the trade deficit between India and the US dropped by almost six
per cent in 2017 compared to the previous year, even as it continued to harp on
issues such as market access and high tariffs on several American products
being imported into India. Some support will also come from NITI Aayog CEO
Amitabh Kant's statement that the government has been able to save Rs 83,000
crore through direct benefit transfer (DBT) scheme. He said that advantages of
digitization are so enormous in making India a progressive, effective society.
Traders will also take some encouragement with private weather forecasting
agency Skymet's forecast that Monsoon in India is likely to be normal with no
chances of drought this year. The forecaster said there were 5 per cent chances
of excess rainfall that is more than 110 percent of long-period average (LPA).
The average, or normal, rainfall in the country is defined between 96 and 104
per cent of a 50-year average for the entire four-month monsoon season.
Meanwhile, the government said India's prospects to become a top steel exporter
depends on a range of factors, including competitiveness and demand, and will
not be impacted by the trade barriers the US has put on imports.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,128.40
|
10,066.52
|
10,235.07
|
BSE Sensex
|
33,019.07
|
32,825.91
|
33,358.88
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ICICI Bank
|
334.87
|
268.65
|
265.00
|
272.80
|
Tata Motors
|
271.57
|
355.60
|
346.67
|
364.12
|
SBI
|
188.24
|
247.30
|
244.20
|
251.70
|
Hindalco
|
177.53
|
200.80
|
197.17
|
207.27
|
Tata Steel
|
139.10
|
560.55
|
548.57
|
581.52
|
Reliance Industries' JV - Jio Payments Bank has commenced the commercial operations.
IndusInd Bank has received the RBI's approval for proposed acquisition of 100 percent stake in IL&FS Securities Services.
HDFC Bank has inked a MoU with Indian Army for Defence Salary Package on April 3, 2018.
Kotak Mahindra Bank has launched Keya, India's first AI-powered voicebot in the banking sector.