Bears tightened
their grip on Dalal Street with frontline gauges extending southward journey for
second straight session to settle below their crucial 11,300 (Nifty) and 37,500
(Sensex) levels. Markets made a cautious start and traded choppy for most part
of day's trade with private report suggesting India's economic growth is
expected to moderate in the second half of this financial year after a strong
first quarter, owing to tighter financial conditions, high oil prices and
slowing global growth. It expects real GDP growth to slow to 7-7.3% in the
second half of this fiscal from 8.2% in June 2018 quarter. Adding to the
pessimism, India Meteorological Department (IMD) data showed that the
countrywide monsoon saw the highest rain deficiency of the season in August --
ironically the month when a large part of Kerala was submerged and many other
states received excess rainfall. Traders also reacted negatively to another
private report that a depreciating currency will impact the economy adversely,
as India imports around 83% of its crude oil requirement. A surge in the oil
import bill can widen fiscal and current account deficits. Sharp selloff in
final hour of trade mainly played spoil sports for Indian equities and dragged
key gauges near intraday lows. Sentiments remained downbeat with former RBI
Governor Raghuram Rajan's statement that over optimistic bankers, slowdown in
government decision making process and moderation in economic growth mainly
contributed to the mounting bad loans. Caution also crept in ahead of Consumer
Price Index-based (CPI) inflation and Index of Industrial Production data slated
to be announced tomorrow. Traders shrugged off Asian Development Bank's (ADB)
latest report on Key Indicators for Asia and the Pacific 2018, where it has
stated that share of India in the Gross Domestic Product (GDP) of Asia and
Pacific region moved up to 17.3% in 2017 from 14.6% in 2000. It added that the
Asia and Pacific region accounts for more than two-fifths of the share of
global GDP in Purchasing Power Parity (PPP) terms. Finally, the BSE Sensex
declined by 509.04 points or 1.34% to 37,413.13, while the CNX Nifty was down
by 150.60 points or 1.32% to 11,287.50.
The US markets ended in green on
Tuesday with the Dow climbing by over 100 points, as energy and
telecommunications rallied. Telecommunications were among the best performers
while the energy sector got a lift from strong crude oil prices. Tech shares
were also notable gainers with megacaps Apple, Facebook, and Microsoft Corp all
rising sharply. The gain for Dow component Apple came a day ahead of the
company's annual iPhone event, which could also see the company announce
upgrades to other products, including a likely debut for a new version of the
Apple Watch. However, there was cautiousness in the markets as investors
continued to watch the situation between the US and China after President
Donald Trump recently threatened China with fresh tariffs. The latest move by
Trump would impact an additional $267 billion in Chinese goods, coming on top
of an already-proposed $200 billion in tariffs. China has vowed to retaliate
and plans to ask the World Trade Organization next week for permission to
impose sanctions on the US for Washington's noncompliance with a ruling in a
dispute over US dumping duties. Dow Jones Industrial Average rose 113.99 points
or 0.44 percent to 25971.06, the S&P 500 added 10.76 points or 0.37 percent
to 2887.89 and Nasdaq was up by 48.31 points or 0.61 percent to 7972.47.
Benchmark crude oil futures for
October surged $1.71 or 2.5 percent to settle at $69.25 a barrel on the New
York Mercantile Exchange. November Brent crude rose 1.69 or 2.2% to settle at
$79.06 a barrel on London's Intercontinental Exchanged. Crude oil futures ended
higher on Tuesday as the US government cut its forecasts for domestic
production and concerns continued to grow over the potential for tighter global
supplies ahead of renewed sanctions on Iran. It is expecting that the Energy
Information Administration (EIA) to report a fall of 2.7 million barrels in
crude supplies for the week ended September 7. Meanwhile, in a monthly report,
the EIA said that Iranian crude production was down 200,000 barrels a day in
August compared with July. Beside, some support also came in as a major
hurricane approaching the US East Coast boosted demand for fuel and threatened
the flow of gasoline through a key pipeline.
Continuing
its record closing low for the second straight day, Indian rupee ended
considerably weaker against the Greenback on Tuesday, on fresh bouts of dollar
demand from importers. Investors remained concerned with private report
suggesting India's economic growth is expected to moderate in the second half
of this financial year after a strong first quarter, owing to tighter financial
conditions, high oil prices and slowing global growth. It expects real GDP
growth to slow to 7-7.3% in the second half of this fiscal from 8.2% in June
2018 quarter. Traders also reacted negatively to another private report
highlighting that a depreciating currency will impact the economy adversely, as
India imports around 83% of its crude oil requirement. A surge in the oil
import bill can widen fiscal and current account deficits. Additionally, a firm
dollar against some global currencies overseas along with sharp losses in the
local equities also pressurized the sentiments. On the global front, the euro's
bounce fizzled on Tuesday as a broad dip in investor appetite for risk dragged
the single currency lower, offsetting recent positive sentiment toward Italian
government debt before a central bank meeting later this week. Finally, the
rupee ended at 72.69, 24 paise weaker from its previous close of 72.45 on
Monday.
The FIIs as per Tuesday's data
were net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 5434.35 crore against gross selling of Rs 6396.43 crore, while
in the debt segment, the gross purchase was of Rs 325.51 crore with gross sales
of Rs 663.57 crore. Besides, in the hybrid segment, the gross buying was of Rs
1.13 crore against gross selling of Rs 1.62 crore.
The US markets shrugged off trade
worries and ended higher on Tuesday as gains in technology stocks helped the
markets to regain footing and curbed losses in the materials and industrials
sectors due to fears of an escalation in Sino-US trade spat. Asian markets were
trading in red on Wednesday, as investor confidence was chilled by the latest
round of verbal threats in an intensifying US-China trade conflict. The Indian
markets witnessed a bloodbath for the second straight day on Tuesday as Sensex
and Nifty fell over 1% after the rupee hit a fresh record low of 72.62,
reversing initial gains. Today, the markets are likely to make a cautious start
amid mixed global cues. Investors will be looking ahead to macroeconomic data
such as Index of Industrial Production (IIP) and Consumer Price Index (CPI) to
be announced after the market hours, for clues to whether the Reserve Bank of
India (RBI) will front-load its hiking cycle to keep inflation under check.
Investors will be also closely watching rupee movement. Traders will be
concerned about a private report that regulatory policies pose the biggest
risks for companies over the next three years, followed by cyber security and
technology disruptions. The report showed a divide on the viewpoint of risk
management amongst Indian organisations. However, traders may get some
encouragement with Moody's Investors Service's report that the sharp
depreciation in rupee's valuation is unlikely to impact India's sovereign
credit profile as rupee-denominated government bonds and robust foreign
exchange reserves mitigate the risk. Also, traders may get some support with
the Finance Ministry's statement that the decision to double the limit to Rs 20
lakh for filing applications in debt recovery tribunals will help them focus on
high value matters leading to quicker recovery of bad loans. Meanwhile, SBI
Ecowrap report stated that the recent increase in petrol and diesel prices is
likely to give state governments a windfall gain of around Rs 22,700 crore over
and above the budget estimates for current fiscal. It said the this windfall
gain will have positive impact on state finances, which might push down the
states' fiscal deficit by 15-20 bps, other things remaining unchanged. The
power stocks will keep buzzing after the Supreme Court asked banks to maintain
status quo and not to initiate insolvency proceedings against loan defaulting
power companies in the country. There will be some buzz in the steel sector
stocks with the Steel Ministry's statement that India is hopeful of occupying
the second slot in global steel output after China while the government has
also taken steps to encourage secondary steel producers to boost performance.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,287.50
|
11,214.53
|
11,419.93
|
BSE Sensex
|
37,413.13
|
37,168.46
|
37,850.53
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
285.54
|
316.60
|
311.52
|
324.77
|
SBI
|
283.61
|
282.60
|
279.02
|
288.82
|
ITC
|
260.07
|
297.20
|
292.92
|
304.12
|
Axis Bank
|
191.62
|
650.15
|
643.17
|
661.42
|
Vedanta
|
142.76
|
219.65
|
215.97
|
225.37
|
IOC has entered into a MoU with the Haryana government on September 10, 2018, to set up an ethanol plant in Panipat.
ICICI Bank along with BSE and PTC India has filed a petition with CERC on September 7, 2018 for grant of license for setting up a new power exchange.
UltraTech Cement has joined EP100 to double energy productivity.
Yes Bank has raised $400 million through syndicated loan facility, borrowed out of its IFSC Banking Unit in Gujarat International Finance Tec-City.