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NSE Intra-day chart (07 November 2019)
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Market Commentary 08 November 2019
Benchmarks to get a gap-down opening amid weak Asian cues

 

Bulls kept tight control over Dalal Street on Thursday, with Sensex & Nifty garnering around 200 & 50 points, respectively. The start of the day was fabulous, as Cabinet cleared the structure of the proposed exclusive alternate investment fund (AIF) for the real estate sector with an initial corpus of Rs 25,000 crore, more inclusive terms and a commitment to continue to provide more budget funds, in addition to the initial Rs 10,000 crore, as & when demand arises. Adding some relief, Petroleum Minister Dharmendra Pradhan said that the government is on track to meet the target of cutting India's oil import dependence by 10 percent by 2020. Key indices erased all of their gains to turn negative in noon deals, after the International Monetary Fund (IMF) stated that the Indian government needs to become more transparent on the fiscal numbers as it is a laggard among the G20 peers on this front.  However, benchmarks managed to gain traction again during last hours of the trade to settle near their intraday high points, on account of positive cues from the global markets. Market participants took encouragement with Prime Minister Narendra Modi's statement that India is taking several steps to create an enabling ecosystem for investors. Finally, the BSE Sensex gained 183.96 points or 0.45% to 40,653.74, while the CNX Nifty was up by 46.00 points or 0.38% to 12,012.05.

 

The US markets ended higher with Dow Jones Industrial Average and S&P 500 closing at record highs on Thursday after a spokesman for the Chinese Commerce Ministry said the US and China have agreed to lift existing tariffs in phases. Ministry spokesman Gao Feng said the trade war started with tariffs and should end with the cancellation of tariffs. Gao added Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations. The US has widely been expected to scrap tariffs on about $156 billion worth of Chinese imports currently set to take effect on December 15 as part of phase one. A private report said an anonymous US official confirmed the planned rollback as part of a phase one trade agreement President Donald Trump and Chinese President Xi Jinping hope to sign before the end of the year. On the economic front, a report released by the Federal Reserve showed US consumer credit increased by much less than expected in the month of September. The Fed said consumer credit rose by $9.5 billion in September after jumping by $17.9 billion in August. Street had expected consumer credit to climb by $15.0 billion. The smaller than expected increase in consumer credit came as a continued drop in revolving credit partly offset continued growth in non-revolving credit. Revolving credit, which largely reflects credit card debt, edged down by $1.1 billion in September after slipping by $2.2 billion in August. Besides, first-time claims for US unemployment benefits fell by more than expected in the week ended November 2, according to a report released by the Labor Department. The report said initial jobless claims slid to 211,000, a decrease of 8,000 from the previous week's revised level of 219,000. Street had expected jobless claims to dip to 215,000 from the 218,000 originally reported for the previous week.

 

Crude oil futures ended higher on Thursday after China and the US agreed to lift existing tariffs if a partial trade deal is struck soon. Gao Feng, a ministry spokesperson for China's Commerce Ministry, said Beijing and Washington agreed to the simultaneous removal of import duties recently imposed as the parties move closer to a so-called phase one trade pact. Besides, the Energy Information Administration (EIA) reported that domestic supplies of natural gas rose by 34 billion cubic feet for the week ended November 1. Benchmark crude oil futures for December rose 80 cents or 1.4 percent to settle at $57.15 a barrel on the New York Mercantile Exchange. January Brent gained 55 cents or 0.9 percent to settle at $ 62.29 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended unchanged compared to its previous close, as reports of delays in sealing a preliminary Sino-US trade deal kept investors edgy. The domestic currency was also weighed down by dollar's strengthen against some other currencies. Traders remained cautious with the International Monetary Fund (IMF) stating that the Indian government needs to become more transparent on the fiscal numbers as it is a laggard among the G20 peers on this front. However, traders took some support with Prime Minister Narendra Modi's statement that India is taking several steps to create an enabling ecosystem for investors. Finally, the rupee ended unchanged from its previous close of 70.97 on Wednesday.

 

The FIIs as per Thursday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 6071.98 crore against gross selling of Rs 4810.11 crore, while in the debt segment, the gross purchase was of Rs 4104.29 crore with gross sales of Rs 1360.49 crore. Besides, in the hybrid segment, the gross buying was of Rs 9.96 crore against gross selling of Rs 12.22 crore.

 

The US markets ended higher on Thursday after a Chinese official said that Washington and Beijing have discussed rolling back tariffs. However, Asian markets were trading mostly lower on Friday despite positive cues from Wall Street. Indian markets ended higher on Thursday after the government announced a Rs 25,000 crore stimulus for the real estate sector. Today, the start of session is likely to be gap-down amid lackluster trade in Asian peers and concerns over economic growth. Traders will be anxious as India's credit ratings outlook was cut to negative from stable by Moody's Investors Service on concern the government won't be able to help stunted economic growth. Moody's cited a growing debt burden and the government's struggle to narrow the budget deficit. The rating company affirmed the nation's foreign issuer rating at Baa2, the second-lowest investment grade score. Also, there will be some cautiousness with the ICRA's report that the government's Rs 25,000-crore fund to complete about 1,500 stalled affordable and mid-income housing projects is not adequate. Though, traders may take some support later in the day with report that in the last 20 years, the Indian economy has grown from a gross domestic product (GDP) of $476 billion in 2000 to  $2,900 billion today, a growth of 10 percent compounded annual growth rate (CAGR) in nominal terms and about 7.5 percent in real terms. Traders may take note of report that the government may impose a provisional safeguard duty of 25 per cent on imports of single-mode optical fibre, used for signal transmission, based on a Commerce Ministry investigation that found a sudden and significant surge in the imports of the fibre. Meanwhile, the Insurance Regulatory and Development Authority of India (Irdai) has issued draft guidelines on the wellness and preventive features in health insurance products to enhance the scope of services offered. There will be some buzz in the aviation stocks with global airlines body IATA's statement that India's air traffic increased by just 1.6 per cent in September compared to 4.5 per cent in August this year and it said the pace of growth has slowed significantly throughout 2019 due to weaker economic activity and Jet Airways bankruptcy. Banking stocks will be in focus with the Reserve Bank of India (RBI) data showing that the non-food credit growth in the banking system stood at 8.79% year-on-year (y-o-y) for the fortnight ended November 7, the highest in the last three fortnights, following the lending outreach programmes by public-sector banks (PSBs). There will be some reaction in telecom stocks with report that the communications ministry has started examining whether the Supreme Court's ruling on the definition of telecom revenue may apply to any company that utilizes radio waves and has a telecom license, throwing up the possibility of statutory dues swelling beyond Rs 3 lakh crore.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

12,012.05

11,965.47

12,040.02

BSE Sensex

40,653.74

40,487.12

40,754.32

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

1,898.59

66.45

65.20

68.50

Tata Steel

407.01

403.10

391.65

411.70

Tata Motors

386.25

171.50

167.83

174.93

SBIN

339.27

318.15

315.53

322.03

ICICI Bank

183.12

478.55

475.13

482.48

 

  • ICICI Bank has expanded its retail network in Andhra Pradesh and Telangana by adding 57 new branches in the current fiscal. 
  • Tech Mahindra and Israel-Based Startup Atidot has collaborated to offer artificial intelligence enabled solution for life insurance companies. 
  • NTPC has commenced commercial operation of Unit-1 of 660 MW of Tanda Super Thermal Power Station, Stage-II.  
  • Hero MotoCorp has launched India's first BS-VI compliant motorcycle-the new Splendor iSmart.
News Analysis