The carnage in Indian equity markets prolonged for yet
another session as the frontline indices
continued to sway to the tune of gloomy global developments and deposed
another half a percentage point on the last trading session of the week. The
session was characterized by extreme volatility as nervous investors fretted
over the potential outcome of the US
presidential election, which has become too close to call, on November 8, 2016. Investors had
largely priced in a Hillary Clinton win in the election, but nerves creeped in
when news broke last week that the FBI was investigating new emails linked to
the Democratic candidate. On domestic front, Sun Pharmaceuticals and Reliance
Industries (RIL) have proved to be the main culprits for today's major fall.
RIL, with the highest weightage on Sensex, got bludgeoned by close to two
percent in the session after the Centre issued a penalty of $1.55 billion
(approximately Rs 10,340 crore) on Reliance Industries for drawing and selling
natural gas from the state-owned Oil and Natural Gas Corporation's idle block
in the Krishna-Godavari basin. Further, Pharma stocks including Sun
Pharmaceuticals edged lower after US prosecutors are bearing down on generic
pharmaceutical companies in a sweeping criminal investigation into suspected
price collusion, a fresh challenge for an industry that's already reeling from
public outrage over the spiraling costs of some medicines. Meanwhile, investors
also overlooked reports that the GST Council fixed a four-slab tax structure
for GST implementation. Four-tier GST tax structure of 5, 12, 18 and 28 per
cent that aims to lower tax incidence on most goods and keep out essential
items was decided by a high-powered council, a major breakthrough for rollout
of the Goods and Services Tax regime from April 1 next year. According to Chief
Economic Advisor Arvind Subramanian, the GST Council's decision to peg the tax
rate on items of mass consumption at 5 per cent will bring down prices and soften
inflation. Finally, the BSE Sensex declined by 156.13 points or 0.57% to
27274.15, while the CNX Nifty dropped 51.20 points or 0.60% to 8,433.75.
The US
markets closed lower on Friday, with the S&P 500 ending lower for a ninth
straight session in the longest losing streak since December 1980. Global
equity weakness has been tied in part to Republican presidential nominee Donald
Trump's gains against Democratic rival Hillary Clinton in the polls over the
past week. He is viewed as more likely to inject uncertainty into domestic and
global affairs, and investors generally don't like uncertainty. Economic data
released were mixed, but underlined steady growth and were seen as not
impacting the Federal Reserve's view for continued normalization of interest
rates. According to the CME Group's FedWatch tool, market participants see a
71.5% chance of the Federal Reserve tightening policy next month. On the
economy front, the US
added 161,000 new jobs in October and the unemployment rate fell below 5%
again, reflecting a tight labor market that's forced firms scrambling to fill
open positions to boost pay at the fastest pace in seven years. Unemployment,
meanwhile, fell to 4.9% from 5% and remained near an eight-year low.
Separately, the US
trade deficit plunged 10% in September to a 19-month low, aided by a fourth
straight increase in exports that gave the economy a boost in the third
quarter. The nation's trade gap shriveled to $36.4 billion from a revised $40.5
billion in August. Exports rose 0.6% to $189.2 billion and hit the highest
level since the summer of 2015 despite a sharp pullback in shipments of
soybeans. The Dow Jones Industrial Average lost 42.39 points or 0.24 percent to
17,888.28, Nasdaq dropped 12.04 points or 0.24 percent to 5,046.37, while S&P
500 was down 3.48 points or 0.17 percent to 2,085.18.
Crude
oil futures continued their decline on Friday, making it the worst weekly
settlement since September 20, as prices were down 9.5% this week. The
commodity also remained under pressure amid growing skepticism over the
implementation of a planned deal by OPEC to limit production. There were
reports that OPEC may not finalize an agreement to curb supplies until the end
of the month, and reports indicate Iran
is unwilling to commit to any quotas. Iraq,
Iran, Nigeria
and Libya all
signaled they might not take part in the proposed production cut deal. Also, Baker Hughes reported a 12-site
increase in the oil and gas rig count, bringing the total number of active rigs
to 569. Benchmark crude oil futures for December delivery dropped $0.59 or 1.3
percent to close at $44.07 a barrel on the New York Mercantile Exchange. In London,
Brent oil futures for December delivery declined by $0.51 or 1.1 percent to
$46.35 a barrel on the ICE.
Indian rupee snapping its two-day depreciating streak ended
stronger against dollar on Friday on account of fresh selling of the American
currency by banks and exporters. Sentiments got some support with report that
the government has finalized four-tier GST tax structure of 5, 12, 18 and 28
percent that aims to lower tax incidence on most goods and keep out essential
items. Meanwhile, Chief Economic Advisor Arvind Subramanian has said that the
GST Council's decision to peg the tax rate on items of mass consumption at 5
per cent will bring down prices and soften inflation. Further, dollar weakened
overseas also supported the rupee but a weak trend domestic equity markets
capped the gains. On the global front, the safe haven Yen was pushed higher
against US Dollar as FX traders consider the possibility that Donald Trump
could become the next US President. Finally, the rupee ended at 66.70, 4 paise
stronger from its previous close of 66.74 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 3827.03 crore against gross sell of
Rs 3754.00 crore, while in debt segment, the gross purchase was of Rs 1224.64
crore with gross sales of Rs 1047.94 crore.
The US
markets ended lower in last session amid election outcome concerns and traders
shrugged off the largely positive jobs report. Most of the Asian markets have
made a green start and the Japanese market has advanced over a percent as the
yen weakened the most in a month after dollar strengthened on latest FBI report.
The Chinese market was marginally lower and the Hong Kong
property shares tumbled after the government announced shock measures to cool
the affordable housing market. The Indian markets had made a dismal closing of
last week with another negative ending amid uncertainty over US election
results, and the first week of Samvat 2073 witnessed cuts of over two percent. Today,
the start is likely to be in green and the markets will see recovery tailing
the gains in Asian markets after the US FBI informed Congress that a review of
new emails found in relation to the bureau's investigation into Hillary Clinton's
use of a private email server had not yielded any reason for charges against
the Democratic presidential nominee. On the domestic front the traders will be
getting support with a survey report that India
improved its ranking by one spot in a global index of business optimism, with
policy reforms and Goods and Services tax (GST) expected to become a reality
soon. India was
ranked second on the optimism index during the third quarter (July-September 2016).
Also, foreign direct investment (FDI) into the country grew by over 30 percent
to $ 21.62 billion during the first half of 2016-17. During April-September of 2015-16,
India received
FDI worth $ 16.63 billion. The Tata group stocks will once again be buzzing
with a group of foreign institutional investors (FIIs) that together own more
than 10% of Tata Motors expressing concerns over Tata Sons having access to
strategic information about Tata Motors. There will be lots of important result
announcements too, to keep the markets in action.
Support and Resistance: NSE (Nifty)
and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8433.75
|
8388.00
|
8491.75
|
BSE Sensex
|
27274.15
|
27145.54
|
27450.84 |
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
ITC
|
352.63
|
249.05
|
245.27
|
254.62
|
Sun Pharma
|
179.09
|
651.50
|
639.10
|
671.90
|
ICICI Bank
|
148.74
|
269.80
|
265.93
|
273.08
|
Hindalco
|
140.42
|
158.85
|
154.08
|
164.28
|
SBI
|
126.58
|
242.85
|
239.63
|
246.73 |
- Yes
Bank has launched 'Yes Mobile 2.0' mobile Banking app with multiple industry first features, and extensive support
for Banking transactions on Apple and Android based SmartWatches.
- Tata
Motors has singed memorandum of understanding with Indonesia's
state-owned enterprise PT Pindad to explore market potential of Tata-armoured
vehicles in Indonesia
and other agreed regions of Asean.
- Maruti
Suzuki India
has reported 5.32% rise in its production to 132,980 units in October 2016 as
compared to 126,251 units in October 2015.
- Bharti
Airtel has provided 7000 more additional points of interconnect to Reliance
Jio, taking the total number of those provided to over 17,000, which claimed to
be enough to cater a user base of 75 million.
- The
government has slapped a $ 1.55 million fine on Reliance Industries and its
partners for extracting natural gas that came under the state-owned ONGC in the
KG basin over the past seven years.