Indian equity indices concluded
the season on a positive note on Wednesday, as investor turned optimistic after
Reserve Bank of India (RBI) used a less hawkish tone and reduced the Statutory
Liquidity Ratio (SLR) in its second bi-monthly monetary policy for financial
year 2017-18. The slashed in SLR or the percentage of deposits that banks have
to park in government securities by 0.5% to 20% will allow banks to increased
lending. RBI left repo and reverse repo rates unchanged at 6.25% and 6%,
respectively and lowered its inflation estimates for the current financial
year. The central bank, however, raised concerns over the possibility of fiscal
slippages due to the farm loan waivers. RBI also cut the economic growth
projection to 7.3% for the current fiscal from 7.4% earlier. With the UK
elections, the European Central Bank's (ECB) policy meeting, and former FBI
director James Comey's Senate testimony all set for Thursday, investors were
noticeably risk averse across the globe.
Sentiments got some support after the Met Department has upgraded the
South-West monsoon forecast to 98% of the long-term average rainfall from 96%
earlier. Rainfall during the June-September monsoon season is expected to be
normal, with a high possibility of all four broad geographical regions
receiving evenly distributed rains. Some support also came with NITI Aayog CEO
Amitabh Kant's statement that the Goods and Services Tax, to be rolled out next
month as the biggest tax reform since independence, will help India achieve 9%
growth rate. He said GST will simplify India's taxation system and help deal
with tax evasion. Meanwhile, many banking stocks gained traction on hopes of
early resolution to stressed assets issue and recapitalisation of PSUs. The
Reserve Bank of India said it would continue to work in partnership with the
government to address the stress in banks' balance sheets. Finally, the BSE
Sensex gained 80.72 points or 0.26 % to 31271.28, while the CNX Nifty was up by
26.75 points or 0.28% to 9,663.90.
The US markets closed higher on
Wednesday, halting two days losses ahead of potentially market moving events on
Thursday, including the UK election and former FBI director James Comey Senate
testimony. Meanwhile, the OECD forecast showed that the global economy is on
course this year for its fastest growth in six years as a rebound in trade
helps offset a weaker outlook in the United States. On the economy front,
consumer borrowing decelerated in April to the smallest increase in almost six
years, suggesting an expected rebound in spending in the second quarter may not
be as robust as hoped. Total consumer credit rose $8.2 billion in April to a
seasonally adjusted $3.82 trillion, posting an annual growth rate of 2.6%. This
is down from a revised $19.5 billion gain in March. The April increase was also
well below economist estimates for a $17 billion gain in consumer credit, and
is the slowest monthly growth rate since August 2011. Revolving credit, which
is mostly made up of credit card loans, increased at an annual rate of 1.8% in
April, compared with a rise of 6.5% in March. The Dow Jones Industrial Average
added 37.46 points or 0.18 percent to 21,173.69, Nasdaq was up 22.32 points or
0.36 percent to 6,297.38, while S&P 500 edged higher by 3.81 points or 0.16
percent to 2,433.14.
Crude oil futures slumped on
Wednesday, after data showed that supplies of U.S. crude rose for the first
time in nine weeks, adding to concerns that rising US oil output would
undermine Opec and its allies' efforts to curb supply. With refinery activity
on wane and exports fading, the Energy Information Administration (EIA) said
crude inventories rose by 3.3 million barrels in the week ended June 2. Gasoline
inventories, rose by 3.324m barrels, while distillate stockpiles unexpectedly
rose by 4.4m barrels. Also, overseas, tensions between Iran and Saudi Arabia
threaten to kill OPEC's supply quota plan that has thus far kept oil above $45
in 2017. Benchmark crude oil futures for July delivery ended lower by $2.30 or 4.8
percent to $45.88 on the New York Mercantile Exchange. In London, Brent crude
for July delivery ended down by 3.75 percent to $48.24 on the ICE.
Indian
rupee strengthened against US dollar on Wednesday, as Reserve Bank of India
(RBI) used a less hawkish tone and reduced the Statutory Liquidity Ratio (SLR)
in its second bi-monthly monetary policy for financial year 2017-18. The
central bank left repo and reverse repo rates unchanged at 6.25% and 6%,
respectively and lowered its inflation estimates for the current financial
year. Sentiments also got some support after the Met Department upgraded the
South-West monsoon forecast to 98% of the long-term average rainfall from 96%
earlier. Rainfall during the June-September monsoon season is expected to be
normal, with a high possibility of all four broad geographical regions
receiving evenly distributed rains. Moreover, positive momentum in the domestic
equities and continuous foreign capital inflows too supported the rupee. On the
global front, dollar jumped against the euro following reports that the
European Central Bank is preparing to cut its inflation forecast. Finally, the
rupee ended at 64.33, 9 paise stronger from its previous close of 64.42 on
Tuesday.
The
FIIs as per Wednesday'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
4094.77 crore against gross selling of Rs 7228.40 crore, while in the debt
segment, the gross purchase was of Rs 1649.11 crore with gross sales of Rs
861.37 crore.
The US markets ended modestly
higher in the last session on the heels of the pullback seen over the two
previous sessions. Though, traders seemed reluctant to make more significant
moves ahead of several potentially market-moving events. The Asian markets have
made a mixed start with some indices trading marginally in red, with some
concern emanating from Korea after North Korea launched a series of short-range
missiles. Traders seemed reluctant to add any big positions before Chinese
trade data too. The Indian markets recovering from their intraday low managed a
decent closing in the last session, with traders rejoicing the RBI's decision
to cut statutory liquidity ratio by 50 basis points to 20 percent, a move that
will help infuse more liquidity into the banking system. Today, the start is
likely to be flat-to-green and traders will be getting some support with RBI expectation
of retail inflation falling to 2-3.5 percent in the first half of current
fiscal and moving up to 4.5 percent in the second half saying that rush for
farm loan waivers may have inflationary spillovers. Though, after the Monetary
Policy Committee decided to hold rates, chief economic adviser Arvind
Subramanian has expressed his unhappiness over the Reserve Bank's inflexibility
on interest rates. He warned that real policy rates are becoming tighter and
rising at a time of low inflation and slowing growth. There will be some buzz
in the PSU banking stocks, as the RBI has raised its concern on state
governments waiving off farm loans and has said that such actions increase the
risk of slippages and contribute to inflation sooner or later. The PSU oil marketing
companies though will be in jubilant mood as the international crude prices
slumped by close to 5 percent.
Support and Resistance: NSE
(Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE Nifty
|
9663.90
|
9636.78
|
9684.78
|
BSE Sensex
|
31271.28
|
31180.51
|
31354.52
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
ICICI Bank
|
137.05
|
324.70
|
321.65
|
326.85
|
Vedanta
|
117.55
|
233.20
|
231.47
|
235.47
|
ITC
|
115.34
|
312.25
|
310.15
|
314.55
|
SBI
|
108.64
|
290.55
|
288.00
|
292.30
|
NTPC
|
89.15
|
157.85
|
157.03
|
158.58
|
Axis Bank has unveiled a bio-degradable plastic card, in the prepaid segment which last only as long as the card's validity.
HDFC is planning to raise Rs 2,000 crore by issuing bonds to shore up long-term capital.
Yes Bank has received its shareholders' nod for raising around Rs 20,000 crore through issuance of non-convertible debentures on private placement basis.
Maruti Suzuki India has reported 16.80% rise in its production to 151,262 units in May 2017 as compared to 129,509 units in May 2016.