The Indian equity indices failed
to sparkle on first day of Diwali week, with both the Sensex and the Nifty
ending Monday's trading session with notable losses. The start of the day was
cautious, affected by a private report stating that with global crude prices
remaining elevated, the rupee is likely to be under pressure, and may touch the
76 levels against the US currency over the next three months. Domestic
sentiments also got hit with another private report showing that overseas
investors pulled out a massive Rs 38,900 crore (over $5 billion) from the
capital markets in October, the steepest outflow in nearly two years, on rising
crude oil prices, depreciating rupee and worsening current account deficit.
With this, the total outflow from the capital markets (equity and debt
together) has reached over Rs 1 lakh crore so far this year. The trade remained
in negative during the day, as former RBI governor and top economist Raghuram
Rajan said that cross-border capital flows have been a source of financial
fragility and he underscored that countries should see how best they can
benefit from cross-border flows, without incurring the costs. Separately,
raising concerns over recent liquidity crisis in non-banking financial
companies (NBFC), the industry chamber, Associated Chambers of Commerce and
Industry of India (ASSOCHAM) has stated that the Reserve Bank of India (RBI)
should provide a liquidity credit line of Rs 30,000-40,000 crore to non-banking
financial companies (NBFC) as a temporary relief from tight liquidity
conditions. However, positive data of India's services PMI helped the markets
to trim some of their losses in the last leg of the trade. India's services
sector activity signaled a solid and stronger improvement in business
conditions in the month of October, aided by accelerating new work along with
easing inflationary pressures. As per the survey report, the seasonally
adjusted Nikkei Services Business Activity Index rose to 52.2 in October from
50.9 in September. Some relief also came with Prime Minister Narendra Modi's
statement that he has announced measures for Micro, Small and Medium
Enterprises (MSMEs) will add strength to the sector. He also stated that bigger
markets and better opportunities for the MSMEs was a win-win situation. Soothing
some worries, a private report said that the government has generated
higher-than-expected revenues from customs duties, which may help it rein in
the fiscal deficit within its FY19 target of 3.3 percent of gross domestic
product. Traders took note of eminent economist Arvind Panagariya's statement
that India and several other Asian countries have in the past defied the belief
that protectionism is good for developing economies as these nations reaped benefits
of opening up trade and lower tariffs. Finally, the BSE Sensex lost 60.73
points or 0.17% to 34950.92, while the CNX Nifty was down by 29.00 points or
0.27% to 10524.00.
The US markets ended mostly
higher on Monday, as oil prices lifted energy stocks and defensive sectors such
as real estate and utilities gained, but a drop in Apple's shares dragged down
the Nasdaq. However, trading was subdued as traders reluctant to make
significant moves ahead of Tuesday's highly anticipated midterm elections, which
will decide control of both the House and Senate. Democrats are seen as having
a much better chance to claim a majority in the House than in the Senate, but
controlling the lower chamber would still allow Democrats to hinder Trump's
agenda. The Federal Reserve's looming monetary policy announcement also kept
some traders on the sidelines, with the Fed due to announce is latest decision
on Thursday. While the Fed is widely expected to leave interest rates
unchanged, traders will keep a close eye on the accompanying statement for
clues about an expected rate hike in December. Meanwhile, traders shrugged off
a report from the Institute for Supply Management showing a modest slowdown in
the pace of growth in the service sector in the month of October. The ISM said
its non-manufacturing index dipped to 60.3 in October after climbing to 61.6 in
September, although a reading above 50 still indicates growth in the service
sector. Street had expected the index to drop to 59.3. Last month, the ISM said
the non-manufacturing index unexpectedly rose in September, reaching its
highest level since the inception of the composite index in 2008. Dow Jones
Industrial Average surged 190.87 points or 0.76 percent to 25,461.70 and
S&P 500 was gained 15.25 points or 0.56 percent to 2,738.31, while Nasdaq
declined 28.14 points or 0.38 percent to 7,328.85.
Giving up most of the early
gains, crude oil futures ended lower on Monday as the US government decided to
grant waivers to some buyers of Iranian crude. According to reports, US
President Donald Trump has said that he wants to go slow on Iranian sanctions,
as doesn't want to drive up oil prices. This decision by the Trump
administration and recent data showing crude oil stockpiles in the US to have
increased for six successive weeks eased concerns about tighter supplies in the
market. Benchmark crude oil futures for December dropped 4 cents or less than
0.1 percent to settle at $63.10 a barrel on the New York Mercantile Exchange.
January Brent crude rose 34 cents or 0.5 per cent to settle at $73.17 a barrel
on London's Intercontinental Exchange.
Reversing
two straight sessions of uptrend, Indian rupee ended significantly weaker
against the Greenback on Monday, on account of buying in American currency by
banks and importers. Sentiments weakened with a private report stating that
with global crude prices remaining elevated, the rupee is likely to be under
pressure, and may touch the 76 levels against the US currency over the next
three months. Moreover, the greenback's strength against other currencies
overseas also put pressure on the rupee. Traders failed to take support with a
monthly survey indicating that the country's services sector in October
expanded at the quickest pace since July, driven by significant increase in new
business orders, which in turn led to robust workforce expansion. The
seasonally adjusted Nikkei India Services Business Activity Index rose to 52.2
in October, from 50.9 in September. On the global front, dollar held steady
against most of its major peers on Monday, supported by expectations of tighter
US monetary policy. Finally, the rupee ended at 73.12, 67 paise weaker from its
previous close of 72.45 on Friday.
The FIIs as per Monday'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 7428.03 crore against gross
selling of Rs 7563.61 crore, while in the debt segment, the gross purchase was
of Rs 5110.24 crore with gross sales of Rs 905.39 crore.
The US markets ended mixed on
Monday ahead of highly anticipated midterm elections but oil prices lifted
energy stocks and defensive sectors. Asian markets were trading mixed on
Tuesday with markets seemingly in a holding pattern after a muted US session
ahead of midterm elections. Indian markets ended lower on first trading day of
the week following negative Asian cues coupled with profit booking and weak
rupee. Today, the markets are likely to make positive start amid mixed global
cues as sentiment was tempered ahead of the US midterm elections. There will be
some support with a private report that the government has generated
higher-than-expected revenues from customs duties, which may help it rein in
the fiscal deficit within its FY19 target of 3.3% of gross domestic product
(GDP). Also, traders will be getting some encouragement with rating agency
Crisil's report that the rupee may appreciate to 71 against the dollar by March
2019 on positives like the dip in crude prices and the $75-billion currency
swap with Bank of Japan. However, there
may be some cautiousness with report that excessive competition at times can
result in stress in a particular sector, Finance Minister Arun Jaitley said
pointing out that these are challenges of the growing economy. He also said
that with the growing economy, the role of each regulator will expand. Traders
may take note of S&P Global Ratings' statement that most of its rated
Indian companies and banks can withstand the recent sharp depreciation in the
rupee, but a deep and sustained decline could squeeze their margins. It said
most emerging market issuers are buffered against further currency depreciation
and do not face immediate downgrade risk from currency depreciation. There will
be some buzz in power sector stocks with report that average spot power price
at Indian Energy Exchange (IEX) rose 45.5% in October at Rs 5.94 per unit over
Rs 4.08 per unit in the year-ago month. IEX witnessed highest ever sales volume
of 7,125 million units (MU) during the month due to higher demand, coal
shortage, lower wind and hydro power generation. There will be lots of earnings
announcements too, to keep the markets in action.
Support and Resistance: NSE (Nifty) and BSE
(Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,198.40
|
10,154.13
|
10,263.88
|
BSE Sensex
|
33,891.13
|
33,735.16
|
34,111.73
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
SBI
|
446.20
|
294.95
|
285.63
|
302.13
|
Axis Bank
|
242.01
|
624.40
|
616.73
|
632.53
|
ICICI Bank
|
228.74
|
349.65
|
347.82
|
351.67
|
Yes Bank
|
211.34
|
210.10
|
206.68
|
212.93
|
ONGC
|
152.61
|
154.95
|
151.10
|
161.90
|
SBI has reported a fall of 61.50% in its net profit at Rs 751.58 crore for Q2FY19 as compared to Rs 1,952.30 crore for Q2FY18.
ONGC has reported 4.7% fall in its total Crude Oil Production at 12.294 MMT in H1FY19 from 12.894 MMT in H1FY18.
Maruti Suzuki India has reported 6.5% rise in its production to 150,497 vehicles in October 2018, as compared to 141,269 vehicles in October 2017.
Cipla has reported a fall of 10.78% in its net profit at Rs 377.05 crore for Q2FY19 as compared to Rs 422.59 crore for Q2FY18.