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NSE Intra-day chart (11 January 2019)
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Market Commentary 14 January 2019
Benchmarks likely to make cautious start amid weak global cues


Indian equity indices fell for the second consecutive day on Friday, with Sensex and Nifty posting losses of around 0.25% each. The markets made firm start of the day, aided by Goods and Services Tax (GST) Council's decision to double the limit for exemption from payment of GST to Rs 40 lakh from the earlier cap of Rs 20 lakh. It also decided that from the next fiscal year, businesses with annual turnover of Rs 1.5 crore will be able to pay GST at a fixed rate of their earnings under the composition scheme, while the current limit is Rs 1 crore. Domestic sentiments were optimistic with Commerce & Industry Minister Suresh Prabhu's statement that we are considering giving transport subsidy to states. It is under active consideration to promote agriculture exports. On credit issues being faced by exporters, he said the financial services secretary would hold meeting with banks on the matter. Meanwhile, the Securities and Exchange Board of India (SEBI) announced portfolio concentration norms for equity exchange-traded funds (ETFs) and index funds. SEBI's new guidelines are meant to address risks related to portfolio concentration in ETFs and index funds. According to the new norms, the index shall have a minimum of 10 stocks as its constituents. However, the markets soon turned lackluster and remained weak for the rest of the session, on the back of heavy selling by the traders, despite positive cues from global markets.  Anxiety spread among the market participants, with reports that the unemployment rate rose to a four-year high in 2016-17, when the government demonetised old currency notes, at the same time as more people joined the labour force looking for jobs. According to the findings of the Labour Bureau, the unemployment rate stood at 3.9%, compared to 3.7% in 2015-16 and 3.4% in 2013-14. Adding more worries, the Annual Survey of Industries (ASI) showed that in 2016-17-the year in which high-value currency was scrapped-gross value added (GVA) by the industry grew at the slowest pace since the Narendra Modi government took over. GVA grew by 7.2% at current prices in FY17, down from 9.3% in FY16 and 9.4% in FY15. Finally, the BSE Sensex lost 96.66 points or 0.27% to 36,009.84, while the CNX Nifty was down by 26.65 points or 0.25% to 10,794.95.


The US markets ended marginally lower on Friday on account of profit taking, with traders cashing in on the gains seen over the five-session winning streak. Concerns about the ongoing government shutdown and skepticism about a potential trade deal between the US and China also weighed on the markets. Selling pressure remained somewhat subdued, however, with recent upward momentum helping to limit the downside for the markets.  On the economic front, the Labor Department released a report showing a slight drop in consumer prices in the month of December. The Labor Department said its consumer price index slipped by 0.1 percent in December after coming in unchanged in November. The slight drop in consumer prices matched street estimates. Energy prices showed another significant decrease during the month, plunging by 3.5 percent in December following a 2.2 percent slump in the previous month. A steep drop in gasoline prices led the way lower, with gas prices plummeting by 7.5 percent in December after tumbling by 4.2 percent in November. On the other hand, the report said food prices climbed by 0.4 percent in December, the largest increase since May of 2014. Prices for fruits and vegetables surged higher. Excluding food and energy prices, the core consumer price index rose by 0.2 percent in December, matching the increases seen in the two previous months as well as expectations. Higher prices for shelter, recreation, medical care, and household furnishings and operations more than offset lower prices for airline fares, used cars and trucks, and motor vehicle insurance. Dow Jones Industrial Average declined 5.97 points or 0.02 percent to 23995.95, Nasdaq lost 14.59 points or 0.21 percent to 6971.48 and S&P 500 was down by 0.38 points or 0.01 percent to 2596.26.


Snapping their 9-day Winning Streak, Crude oil futures ended lower on Friday, however scoring a second weekly climb in a row. The recent advance for the energy complex has been powered by optimism over US-China trade talks, as well as a December output drop from major producers and a decline in last week's US crude inventories. Meanwhile, over in the US, the number of domestic rigs drilling for oil fell for a second week in a row-by 4 to stand at 873 this week, suggesting a slowdown in crude production. Benchmark crude oil futures for February declined $1 or 1.9 percent to settle $51.59 a barrel on the New York Mercantile Exchange. March Brent crude dropped $1.20 or 2 percent to settle at $60.48 a barrel on London's Intercontinental Exchange.


Indian rupee ended marginally weaker against the American currency on Friday, due to fresh dollar demand from banks and importers. Traders remained concerned ahead of index of industrial production (IIP) data for November. Some anxiety also spread among the local traders with a report that India's fiscal deficit target has overshot by 15 per cent in the first eight months of FY 2018-19, largely due to a revenue shortfall rather than front-loading of expenditure. Moreover, a weak equity market put pressure on the rupee but sluggish dollar overseas capped the losses. On the global front, euro was on track for its biggest weekly rise in four months on Friday as the U.S. dollar weakened on signs that the Federal Reserve could slow down the pace of interest rate hikes. Finally, the rupee ended at 70.49, 8 paise weaker from its previous close of 70.41 on Thursday.


The FIIs as per Friday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 4074.25 crore against gross selling of Rs 4381.84 crore, while in the debt segment, the gross purchase was of Rs 1016.07 crore with gross sales of Rs 1617.62 crore. Besides, in the hybrid segment, the gross selling was of Rs 0.38 crore against no buying.


The US markets snapped a five-day winning streak to settle marginally lower on Friday as concerns about the slowing of the Chinese economy and the continued shutdown of the US government dragged equities lower. Asian markets were trading mostly in red on Monday as investors kept a wary eye on looming Chinese trade data on increasing signs a slowdown in the world's second-biggest economy is dragging on global growth. Indian markets extended their losses for second straight session to end lower on Friday as traders were cautious ahead of the key macro-economic figures like forex reserves and Index of Industrial Production (IIP). Today, the markets are likely to make cautious start amid weak global cues and slow down in factory output growth. India's industrial output hit a 17-month low of 0.5 per cent in November as compared to 8.1 per cent in October mainly on the back of contraction in manufacturing sector, mining, capital goods and consumer durable goods. The previous low was in June 2017, when IIP growth contracted by 0.3 per cent. Also, traders will be eyeing another macro data of wholesale price inflation (WPI) and consumer price index (CPI) for December scheduled to be released later in the day. There will be some cautiousness with a private report that meeting the fiscal deficit target of 3.3 per cent of Gross Domestic Product (GDP) for the current fiscal could be a challenge for the government, given the shortfall in Goods and Services Tax (GST) collections, rising expenditure and slowing factory output. Meanwhile, a data from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed that India's fuel demand rose 3.2 per cent in December compared with the same month last year. Consumption of fuel, a proxy for oil demand, totalled 18.51 million tonnes. However, some support may come later in the day with the Reserve Bank of India's (RBI) data showing that India's foreign exchange (forex) reserves rose by nearly $2.7 billion as on January 4, 2019. This was the highest weekly gain since February 2018. besides, commerce and industry minister Suresh Prabhu said the government is coming out with a new industrial policy that will link the country with the global supply-chain that will be mutually beneficial. He added that businesses can only grow when there are partnerships among several other geographies. There will be some buzz in the banking sector stocks with report that the RBI deferred the implementation of the last tranche of Capital Conservation Buffer (CCB) by a year, a move that would leave about estimated Rs 37,000 crore capital in the hands of banks. This would help banks increase lending by over Rs 3.5 lakh crore by leveraging ten times of the capital. Also, there will be some reaction in power sector stocks with report that amid stress in the power sector, woes of electricity generating firms have increased further as their outstanding dues on state distribution companies (discoms) rose to Rs 39,498 crore in October 2018, up 24.7 per cent from a year-ago levels. There will be some result announcements to keep the markets in action.


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



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Nifty Top volumes




Previous close (Rs)

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  • Tata Motors' wholly owned subsidiary - JLR has reported retail sales of totalled 592,708 vehicles in 2018, down 4.6% compared to 2017's record year. 
  • Wipro Infrastructure Engineering's aerospace business has begun shipments of part supplies to Boeing from its plant near Bengaluru international airport. 
  • Eicher Motors' two-wheeler division -- Royal Enfield has launched Bullet 500 ABS in the Indian market priced around Rs 1.86 lakh ex-showroom, Delhi. 
  • Infosys has reported a fall of 29.64% in its consolidated net profit at Rs 3,609 crore for Q3FY19 as compared to Rs 5,129 crore for Q3FY18.
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