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NSE Intra-day chart (13 May 2019)
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Market Commentary 14 May 2019
Benchmarks to make a pessimistic start amid negative global cues


Losing streak continued on the Dalal Street for ninth straight session on Monday, as Sensex and Nifty ended lower with sharp losses of over 350 and 100 points, respectively. The markets made a cautious start of day, as India industrial production measured by Index of Industrial Production (IIP) contracted to 0.1% in March 2019, the lowest in 21 months. It had grown by 5.3% in March 2018. As per the data released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation, IIP with base 2011-12 for the month of March 2019 stood at 140.2, which is 0.1% lower as compared to the level in the month of March 2018. Markets remained volatile throughout the day, even though the FICCI's survey report indicated that the overall sentiment in the manufacturing sector remains positive as the proportion of respondents reporting higher output growth (around 54 percent) during the January-March 2018-19 (Q4FY19) remained the same as compared to Q3 (October-December) of 2018-19. In the last leg of trade, key indices saw steepest fall, on the back of weak cues from global markets along with heavy selling by traders. Domestic sentiments got further hit, amid reports that reversing their three-month buying streak, foreign investors pulled out a net Rs 3,207 crore from the Indian capital markets in the first seven trading sessions of May amid the US-China trade tensions and uncertainty over the election results. Prior to this, foreign portfolio investors (FPI) poured in a net Rs 16,093 crore in April, Rs 45,981 crore in March and Rs 11,182 crore in February in the domestic capital markets (both equity and debt). Further, investors also remained concerned with a private report stating that even as factory output fell to a 21-month low in March, the situation may not improve in the first few months of FY20 on account of the increased likelihood of lower investment activity and uncertainties around the elections. Finally, the BSE Sensex slipped 372.17 points or 0.99% to 37,090.82, while the CNX Nifty was down by 130.70 points or 1.16% to 11,148.20.


The US markets ended sharply lower on Monday, with the S&P 500 and the Dow logging their worst day since January 3, after China announced plans to raise tariffs on $60 billion worth of US goods, shrugging off a warning from US President Donald Trump. The move by China comes in retaliation for Trump's recent decision to raise tariffs on approximately $200 billion worth of Chinese goods to 25 percent from 10 percent. China said increased tariffs on a total of 5,140 US products would take effect June 1, with the tariffs ranging from 5 percent to 25 percent. China is following through on its pledge to take necessary countermeasures in response to the US tariff increase even though Trump warned the situation will only get worse if China retaliates. On the economic front, the composite leading indicator designed to anticipate turning points in economic activity in the Organisation for Economic Co-operation and Development area suggested easing growth momentum in most major economies. The leading indicator fell slightly to 99.0 in March from 99.1 in February. Easing growth momentum remains the assessment for the United States, Japan, Canada, the United Kingdom and the euro area as a whole, including Germany and Italy. On the other hand, the CLI for France indicated stable growth momentum, driven by improvements in consumer confidence, car registrations and share prices. Among major emerging economies, stable growth momentum was the assessment for China and India. Dow Jones Industrial Average plunged 617.38 points or 2.38 percent to 25324.99, Nasdaq dropped 269.92 points or 3.41 percent to 7647.02 and S&P 500 was down by 69.53 points or 2.41 percent to 2811.87.


Crude oil futures ended lower on Monday as steep declines in the US stock market fed an aversion to so-called riskier assets, which include oil. Meanwhile, the US-China trade dispute escalated as China said that it would lift tariffs on $60 billion of US goods to as high as 25%, after the US on Friday increased tariffs on $200 billion of Chinese goods to 25% from 10%. However, Middle East tensions appeared to ratchet up, posing a potential threat to global supply. The Saudi incident comes days after the US said it would send an aircraft carrier and bombers over what the administration of President Donald Trump has described as an increased threat from Iran. Benchmark crude oil futures for June declined 62 cents or 1 percent to settle at $61.04 a barrel on the New York Mercantile Exchange. July Brent crude fell 39 cents or 0.6 percent to settle at $70.23 a barrel on London's Intercontinental Exchange.


Indian rupee ended considerably weaker against the US dollar on Monday, as uncertainty following trade tensions between US and China escalated. Investors remained concerned with data showing that India's industrial output declined by 0.1% in March, hitting a 21-month low, due to contraction in manufacturing, capital goods and consumer durables. Traders also remained wary ahead of Consumer Price Index (CPI) data for April scheduled to be released today. Heavy selling in domestic equities and rising crude oil prices also kept pressure on the Indian rupee. On the global front, Japanese yen rose on Monday, as a stalemate over trade talks between the U.S. and China pushed investors toward assets perceived as havens. Finally, the rupee ended at 70.51, 59 paise weaker from its previous close of 69.92 on Friday.


The FIIs as per Monday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 3494.05 crore against gross selling of Rs 4742.62 crore, while in the debt segment, the gross purchase was of Rs 655.09 crore with gross sales of Rs 933.68 crore. Besides, in the hybrid segment, the gross buying was of Rs 2190.49 crore against gross selling of Rs 1.77 crore.


The US markets declined on Monday as China said it would raise steep tariffs on $60 billion in US goods, upping the stakes of a trade war that threatens to imperil the global economy. Asian markets are trading mostly in red on Tuesday following sharp falls on Wall Street overnight, as the trade war between China and the United States escalated. Indian markets ended lower for ninth straight session on Monday with losses of around a percent, mainly on account of late hour sell-off, as the trade talks between China and US failed to bring any breakthrough. Today, the markets are likely to make pessimistic start tracking weak global cues amid escalation in US-China trade tensions. Market participants will be looking forward to Wholesale Price Index (WPI) to be released later in the day. Traders will be concerned about the Central Statistics Office (CSO) data showing that retail inflation inched up to a six-month high of 2.92% in April due to a spike in food prices, including vegetables, meat, fish and eggs. Inflation based on the Consumer Price Index (CPI) was at 2.86% in the previous month and 4.58% in April 2018. The rate of price rise in April is the highest since October 2018 when the rate was 3.38%. As per the data, the inflation in the food basket was 1.1% in April, up from 0.3% in March. Also, there will be some cautiousness with global analytical company Crisil's statement that its research expects headline inflation, measured by the CPI to rise 60 basis points (bps) to 4% this fiscal from 3.4% in fiscal 2019. This base case assumes food inflation rising to 3% from an abnormal low of 0.1%. Traders may take note of Moody's Investors Service's statement that India's rising oil consumption will support its investments in refining capacity additions and upstream production, but imports will keep growing amid stagnant production. The country's dependence on imported crude oil to meet its needs has risen to 83.7% in 2018-19 fiscal year from 82.9% in 2017-18. Import dependence was 80.6% in 2015-16. However, some respite may come later in the day with Chief Economic Advisor (CEA) Krishnamurthy V. Subramanian's statement that the Indian economy will grow at 7% range in the current fiscal powered by the effects of the strong structural reforms such as bankruptcy laws, Goods and Services Tax (GST), crackdown on shell companies and the fiscal prudence undertaken in the last five years. There will be some buzz in the power sector stocks with a private report that India is expected to add about 80 gigawatts (GW) of renewable energy capacity in the next five years. About 47 GW will be from utility scale solar, 21 GW from wind, 8 from rooftop solar and 3 GW from floating solar projects. There will be lots of earnings reaction based on the performance of the companies.


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Tata Steel






  • L&T has received approval for scheme of arrangement for merger of Wholly-owned Subsidiary -- L&T Shipbuilding with the Company. 
  • Hero MotoCorp has strengthened its scooter portfolio with the launch of two powerful and stylish new scooters-Maestro Edge 125 and Pleasure+ 110- for customers in India and across its global markets. 
  • Tata Motors Group global wholesales in April 2019, including Jaguar Land Rover, were at 79,923 nos., lower by 22%, over April 2018. 
  • ITC has reported a rise of 18.73% in its net profit at Rs 3,481.90 crore for Q4FY19 as compared to Rs 2,932.71 crore for Q4FY18.
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