Indian equity
benchmarks witnessed sharp fall on Tuesday, with both the larger peers, the
Sensex and Nifty, closing below their crucial psychological levels of 38,300
and 11,500, respectively. After a firm start, key indices remained positive for
the most part of the session, aided by a private report stating that if the
BJP-led National Democratic Alliance (NDA) gets a second term, it will provide
liquidity support to non-banking financial companies (NBFCs) that are facing
cash crunch for a year now. Traders were optimistic, as the government said
that India and the United States will engage regularly to resolve outstanding
trade issues. Both sides agreed to deepen economic cooperation and bilateral
trade by ensuring greater cooperation amongst stakeholders, including
Government, businesses and entrepreneurs. However, the markets erased all of
their gains in the last leg of the trade to end in red terrain, impacted by
S&P Global Ratings' latest report stating that goods and Services Tax (GST)
regime in India is not likely to reduce the deficits of state governments
significantly, amid large and growing expenditure mandates for the social
sector as well as capital spending. Some concerns also came with a private
report stating that the weak volume growth reported by consumer staple
companies in Q4, FY19 underlines the slowdown seen in housing over the past
five to six years and automobiles over the past year. The next government may
have its task cut out to revive flagging economic growth. Adding more worries
among traders, the head of the International Monetary Fund said that fresh
trade tensions between the United States and China were the main threat to the
world economy. Finally, the BSE Sensex slipped 323.71 points or 0.84% to
38,276.63, while the CNX Nifty was down by 100.35 points or 0.87% to 11,497.90.
The US markets ended lower with
cut of over one and half percent on Tuesday after US Trade Representative
Robert Lighthizer confirmed the US plans to raise tariffs on $200 billion worth
of Chinese goods to 25 percent on Friday. President Donald Trump threatened to
implement the tariff increase, claiming trade talks between the US and China
are moving too slowly. The confirmation of the Friday deadline may have
shattered the belief that the threat from Trump was just a negotiating tactic.
Lighthizer attributed the potential tariff increase to an erosion in
commitments by China over the last week, with the trade representative calling
substantive changes to the text of a deal unacceptable. Treasury Secretary
Steven Mnuchin noted the US would reconsider raising the tariffs if
negotiations get back on track during the next round of talks later this week.
Traders have largely shrugged off reports that Chinese Vice Premier Liu He is
expected to join this week's talks. On the economic front, with a modest drop
in revolving credit partly offsetting an increase in non-revolving credit, the
Federal Reserve released a report showing US consumer credit rose by less than
expected in the month of March. The Fed said consumer credit rose by $10.3
billion in March after climbing by an upwardly revised $15.4 billion in
February. Street had expected consumer credit to increase by $16.0 billion. Dow
Jones Industrial Average dropped 473.39 points or 1.79 percent to 25965.09,
Nasdaq declined 159.53 points or 1.96 percent to 7963.76 and S&P 500 was
down by 48.42 points or 1.65 percent to 2884.05.
Crude oil futures ended lower on
Tuesday on US-China trade spat. Meanwhile, the Energy Information
Administration (EIA), in its monthly Short-term Energy Outlook report, raised
its forecasts for oil prices and US crude production for this year and next.
For 2020, it forecasted domestic crude output of 13.38 million barrels a day.
That's up 2.2% from the forecast released in April. However, oil prices settled off the session's
worst levels as increasing tensions between the US and Iran and the threat of
disruptions to supplies in the Middle East helped to offset worries that a
protracted trade conflict between the US and China will hurt energy demand.
Benchmark crude oil futures for June dropped 85 cents or 1.4 percent to settle
at $61.40 a barrel on the New York Mercantile Exchange. July Brent crude
declined $1.36 or 1.9 percent to settle at $69.88 a barrel on London's
Intercontinental Exchange.
Rupee resumed
its gaining streak after a day of fall and ended marginally higher against US
dollar on Tuesday, on account of selling of American currency by banks and
exporters. Sentiments remained optimistic with reports that commerce Minister
Suresh Prabhu and US Commerce Secretary Wilbur Ross have agreed to engage
regularly at various level. Both sides agreed to deepen economic cooperation
and bilateral trade by ensuring greater cooperation amongst stakeholders,
including Government, businesses and entrepreneurs. Some support also came with
report that Central Board of Direct Taxes (CBDT) has refuted media reports
pertaining to reduction in numbers of Income Tax Returns (ITR) e-filed during
Financial Year (FY) 2018-19 as compared to FY 2017-18. However, gains remained capped
impacted by S&P Global Ratings' latest report stating that goods and
Services Tax (GST) regime in India is not likely to reduce the deficits of
state governments significantly, amid large and growing expenditure mandates
for the social sector as well as capital spending. Finally, the rupee ended at
69.43, 0.03 paise strong from its previous close of 69.40 on Monday.
The FIIs as per Tuesday's data
were net buyers in equity segment, while they were net sellers in debt segment.
In equity segment, the gross buying was of Rs 5256.66 crore against gross
selling of Rs 4948.42 crore, while in the debt segment, the gross purchase was
of Rs 556.30 crore with gross sales of Rs 558.20 crore. Besides, in the hybrid
segment, the gross buying was of Rs 25.42 crore against gross selling of Rs
29.07 crore.
The US markets settled lower on
Tuesday after the US confirmed that tariffs on imported goods from China could
be raised by the end of the week. Asian markets traded lower in early deals on
Wednesday as the global growth concerns grew. Investors on Tuesday went on a
last-hour selling spree to bring down the markets which ended with substantial
losses. Today, the start of the session is likely to be on negative side amid
global sell-off on worries of US-China trade conflict. Traders will remain
concern on report that US Commerce Secretary Wilbur Ross warned any retaliatory
tariff by India in response to the United States' planned withdrawal of trade
privileges will not be appropriate under WTO rules. India has raised the
prospect of higher import duties on more than 20 US goods if US President
Donald Trump presses ahead with a plan announced in March to end the
Generalized System of Preferences (GSP) for India. India is the biggest
beneficiary of the Generalized System of Preferences (GSP), which allows
preferential duty-free imports of up to $5.6 billion from the South Asian
nation. However, some respite can come later in the day on report that Commerce
and Industry Minister Suresh Prabhu has made a case for a
government-to-government agreement between India and the US to facilitate private
companies in both the countries. He also
expressed hope that issues being faced by businesses in India and the US can be
sorted out in a way that benefits both the countries. Beside, traders will be
getting some encouragement with private report that the number of
business-to-business (B2B) startups has jumped four times to 3,200 in 2018 from
800 in 2014, enabling faster growth of the ecosystem, attracting investments
worth USD 3.7 billion from USD 797 million, during the period. There will be
buzz in the IT stocks with report that India's IT and business services market
May grow by over eight per cent to reach $ 13.1 billion by the year-end and
expand further to $ 14.3 billion by 2020. The IT services market is slated to
reach $ 10 billion by December 2019, growing at 9.1 per cent annually. There
will also be some buzz in solar stocks on report that India needs faster
implementation of roof-top solar projects to meet the 175 gigawatts of
renewable energy target by 2022. There will be lots of earnings reaction based
on the performance of the companies to keep the markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
38,276.63
|
38,063.36
|
38,662.72
|
BSE Sensex
|
38,276.63
|
38,063.36
|
38,662.72
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ICICI Bank
|
415.19
|
386.50
|
378.08
|
401.13
|
Yes Bank
|
404.47
|
164.75
|
162.28
|
168.58
|
Tata Motors
|
305.17
|
190.95
|
185.92
|
199.42
|
Zee Entertainment
Enterprises
|
198.51
|
369.15
|
343.08
|
394.13
|
Bharti Airtel
|
174.08
|
324.95
|
317.32
|
336.72
|
Eicher Motors' motorcycle arm -- Royal Enfield has initiated recall of nearly 7,000 units of its Bullet and Bullet Electra models to rectify faulty brake caliper bolt.
Tata Motors' wholly owned subsidiary -- Jaguar Land Rover has initiated sales of locally manufactured Range Rover Velar in the country with prices starting from Rs 72.47 lakh.
Mahindra & Mahindra's stylish & thrilling new SUV, the XUV300 has crossed 26,000 bookings, since its launch in February this year.
Larsen & Toubro has bought shares worth about Rs 113 crore of Mindtree through open market transactions.