Daily Newsletter
NSE Intra-day chart (04 January 2019)
Top Gainers
Company NameClose% Change
Top Losers
Company NameClose% Change
World Indices
IndicesLast Trade% Change
Indices
IndicesLast Trade% Change
FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
Equity
Debt
Equity
Debt
Equity
Debt
 
Market Commentary 07 January 2019
Markets to make gap-up opening on firm global cues

 

Indian equity bourses bounced back to green on the last trading day of the week, with Sensex and Nifty closing with gains of over a half percent. Key equity indices made a positive start but failed to retain gaining momentum, as India's services sector activity fell in month of December, as growth of new work and activity moderated from November's recent high. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index slipped to 53.2 in December from 53.7 in November. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- too eased to 53.6 in December from 54.5 in November. Domestic sentiments also got affected with a private report that despite crossing the Rs 1-trillion mark twice this year, the goods and services tax (GST) collections are running well behind the budgeted target. As opposed to a monthly target of Rs 1.04 trillion, the monthly run rate adjusting for refunds, works out to around Rs 89,600 crore. This could force the government to either cut its capital expenditure this year or roll over spending on account of subsidies to next year in order to meet the fiscal deficit target. But, in noon deals, the markets bounced back to end the session in green, aided by Finance Minister Arun Jaitley's statement that enacting the Insolvency and Bankruptcy Code (IBC) has helped lenders get Rs 80,000 crore in 66 cases and another about Rs 70,000 crore is likely to be recovered in the remaining months of the current financial year. Separately, Finance Minister Arun Jaitley said that there would be no loss of jobs due to merger of public sector banks. Positive cues from the global markets also provided support to the equity indices to hold their gains. Some support came with a report that the Central Board of Indirect Taxes and Customs (CBIC) has allowed businesses to correct any error or omission in filing of final sales return or GSTR-1 for the period July 2017-March 2018. Now businesses can correct the errors in the returns to be filed for January-March 2019. Finally, the BSE Sensex gained 181.39 points or 0.51% to 35,695.10, while the CNX Nifty was up by 55.10 points or 0.52% to 10,727.35.

 

The US markets ended higher on Friday, with gains of over 3 percent, on fresh signs of economic strength eased fears that slowing growth around the world could drag on the US expansion. Sentiment got boost on a better-than-expected jobs report for December which showed employers adding new personnel at a robust pace. The Labor Department said non-farm payroll employment soared by 312,000 jobs in December after climbing by an upwardly revised 176,000 jobs in November. Street had expected employment to increase by about 177,000 jobs. The report also said the unemployment rate rose to 3.9% in December from 3.7% in November. However, the unexpected uptick by the unemployment rate came as the labor force jumped by 419,000 people compared to a much more modest 142,000-person increase in the household survey measure of employment. The Labor Department said average hourly employee earnings payrolls climbed by 11 cents to $27.48 in December, reflecting a 3.2% increase compared to the same month a year ago. Adding to the optimism, Fed Chairman Jerome Powell said jobs report didn't materially increase concerns over rising inflation, while reiterating that the central bank would continue to keep an open mind about how much it will raise interest rates in 2019 and how aggressively it will shrink its balance sheet, based on incoming data about the US and global economy, including recent weakness in equity markets. The rally on Wall Street also came after China's Commerce Ministry said China and the US would hold vice ministerial level trade talks in Beijing next week. Dow Jones Industrial Average jumped 746.94 points or 3.29 percent to 23433.16, Nasdaq surged 275.35 points or 4.26 percent to 6738.86 and S&P 500 was up by 84.05 points or 3.43 percent to 2531.94.

 

Extending gains for fifth successive session, crude oil futures ended significantly higher on Friday on stronger than expected US jobs data and renewed trade talks set for next week between the US and China. Sentiments remained upbeat on hopes that output reductions by major oil producers like Saudi Arabia and Russia would help ease concerns about excess supply in the market. Besides, the Energy Information Administration's data showed that crude inventories in the US rose by 7,000 barrels in the week to December 28, beating expectations for a drop of more than 3 million barrels. Distillate stockpiles were up by 9.5 million barrels last week, the biggest weekly jump in two years. Gasoline stocks rose by 6.9 million barrels, more than thrice the expected increase. Benchmark crude oil futures for February surged 87 cents or 1.9 percent to settle $47.96 a barrel on the New York Mercantile Exchange. March Brent crude gained $1.11 or 2 percent to settle at $57.06 a barrel on London's Intercontinental Exchange.

 

Indian rupee settled on stronger note on Friday against dollar tracking gains in Asian currencies as the dollar fell on weak US manufacturing data. Rupee sentiment remained upbeat with Finance Minister Arun Jaitley's statement that enacting the Insolvency and Bankruptcy Code (IBC) has helped lenders get Rs 80,000 crore in 66 cases and another about Rs 70,000 crore is likely to be recovered in the remaining months of the current financial year. Some support came with a report that the Central Board of Indirect Taxes and Customs (CBIC) has allowed businesses to correct any error or omission in filing of final sales return or GSTR-1 for the period July 2017-March 2018. Traders shrugged off report that the seasonally adjusted Nikkei Services Business Activity Index slipped to 53.2 in December from 53.7 in November. Further, the Nikkei India Composite PMI Output Index -- which measures both manufacturing and services -- too eased to 53.6 in December from 54.5 in November. Finally, the rupee ended at 69.72, 48 paise stronger from its previous close of 70.20 on Thursday.

 

The FIIs as per Friday'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 3957.73 crore against gross selling of Rs 5015.43 crore, while in the debt segment, the gross purchase was of Rs 3317.14 crore with gross sales of Rs 1886.52 crore.  Besides, in the hybrid segment, there was no buying and selling.

 

The US markets ended Friday's trading session in green territory with notable gains on strong US jobs report and upbeat note following dovish Federal Reserve comments. All the Asian markets are trading higher on Monday as a dovish turn by the Federal Reserve and startlingly strong US jobs data soothed some of the market's worst fears about the global outlook. Snapping two-day losing streak, Indian markets ended higher on Friday, with financials leading the surge, as global growth worries eased coupled with strength in rupee. Today, the markets are likely to make gap-up opening tacking firm trade in global markets after soothing Federal Reserve comments. Traders will be getting encouragement with Federation of Indian Chambers of Commerce and Industry's (FICCI) president Sandip Somany's statement that agricultural reforms, interest rate cut and credit availability to micro, small and medium enterprises will drive India's economic growth to 7.5% in 2019-20. He added that the economy is on a good footing. There will be some support with Reserve Bank of India (RBI) data showing that the country's foreign exchange reserves increased by $116.4 million to $393.404 billion in the week to December 28, on account of rise in foreign currency assets. In the previous week, the reserves had increased by $167.2 million to $393.287 billion. However, there may be some cautiousness with RBI warning that a sudden surge in crude prices can upset the nation's key macro-stability parameters, as it can sharply spike the current account deficit (CAD), inflation and the fiscal numbers, whittling the benefits of higher growth. It added that the international crude prices increased by around 12 per cent between April and September 2018. Traders may also be concerned about a report that overseas investors pulled out over Rs 83,000 crore from the capital markets in 2018, after pouring in a record Rs 2 lakh crore in the preceding year, on the back of rate hikes in the US, rise in global crude prices and rupee depreciation. There will be some buzz in the banking sector stocks with RBI's report that despite concerns, credit growth of the scheduled commercial banks (SCBs) improved across all bank groups between March and September 2018. Besides, Centre has infused more than Rs 51,000 crore in public sector banks till December 2018. There will be some reaction in sugar sector stocks with Indian Sugar Mills Association (ISMA) saying that higher production is attributed to the fact that Maharashtra and Karnataka sugar mills started crushing operations earlier this year. Though, due to substantially lower rainfall and white grub infestation, Maharashtra is likely to produce significantly lower quantities of the commodity this year as compared to the last. Overall, the country is expected to produce much less sugar this season as compared to last.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

10,727.35

10,656.98

10,769.38

BSE Sensex

35,695.10

35,470.05

35,832.17

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

459.15

189.65

184.03

192.78

ICICI Bank

228.96

365.20

359.23

369.98

SBI

195.14

297.65

293.10

300.60

Tata Motors

176.50

170.95

168.98

172.43

Hindalco Industries

174.08

210.90

208.17

213.02

 

  • Yes Bank has sold 2,30,655 equity shares having nominal value of Rs 100 each, constituting 30% of the paid-up share capital of Valecha Investments. 
  • Power Grid Corporation of India has received investment approval for implementation of 500MVAr Thyristor Controlled Reactor at Kurukshetra 400kV bus. 
  • Bharti Airtel planning to launch of its 4G services at remote Hayuliang in Anjaw District of Arunachal Pradesh. 
  • ICICI Bank has signed a MoU with Small Business FinCredit India for entrepreneurs, to jointly provide credit to MSMEs.
News Analysis