Indian equity benchmarks extended
gaining streak for ninth straight session on Tuesday with frontline gauges
ending just shy of 34,400 (Sensex) and 10,550 (Nifty) levels. Markets started
the session on positive note with the World Bank forecasting a growth rate of
7.3% for India this year and 7.5% for 2019 and 2020, and noted that the
country's economy has recovered from the effects of demonetisation and the
Goods and Services Tax (GST). The World Bank also said that India should strive
to accelerate investments and exports to take advantage of the recovery in
global growth. Some support also came with the India Meteorological Department
(IMD) forecasting that the country will receive normal monsoon for a third
consecutive year. However, gains remained capped as investors kept a wary eye
on geopolitical tensions and oil price movements. However, markets took U-turn
and entered into red terrain as traders remained anxious with former President
Pranab Mukherjee's statement that the country's demographic dividend runs the
risk of turning into a demographic disaster if employment is not generated. He
added that the country has achieved an economic growth of 6-8% in the last
couple of decades but the inequality among different classes of the society is
still huge and unacceptable. Sentiments also remained dampened on media report
that the shortage of currency reported in Andhra Pradesh, Telangana and Madhya
Pradesh in the past few weeks has spread to a few more states. There were
complaints of cash shortages in eastern Maharashtra, Bihar and Gujarat on
Monday. The shortage is being felt despite currency in circulation crossing the
pre-demonetization level. However, buying in final hour of trade helped markets
to regain green terrain after Finance Minister Arun Jaitley said that there is
more than adequate currency in circulation and with the banks. Finally, the BSE
Sensex surged 89.63 points or 0.26% to 34,395.06, while the CNX Nifty was up by
20.35 points or 0.19% to 10,548.70.
The US markets closed higher on
Tuesday, with major indices ending at the highest levels in about a month as
the latest round of corporate earnings supported the thesis that valuations are
supported by economic activity. An upbeat attitude toward first-quarter
earnings remained a driving factor for stocks. Meanwhile, a lack of escalation
in the trade tensions between China and the US has also emboldened investors.
Separately, the International Monetary Fund again lifted its estimate for US
economic growth for this year and next, even as the international agency warned
that tax cuts will just bring a momentary jolt to the world's biggest economy.
In its world economic outlook, the IMF lifted its US growth estimate for 2018
to 2.9% and its 2019 estimate to 2.7%, both increases of two-tenths of a
percentage point. It kept unchanged its world economic output estimate from
January at 3.9% for both this year and next year. The IMF pointed out the Tax
Cuts and Jobs Act, the $1.5 trillion tax cut law, gives a temporary allowance
for companies to fully expense investment. This is a strong incentive, the IMF
finds, for companies to push along investment projects. On the economy front,
industrial production in March rose 0.5%. Production is estimated to have risen
at an annual 4.5% rate in the first quarter, down from a blistering 7.8% pace
in the final three months of the year. Capacity utilization rose to 78% in
March from 77.7%, the highest rate in three years. Over the past 12 months,
production has climbed 4.3%. Separately, housing starts ran at a seasonally
adjusted annual pace of 1.32 million in March, up 2% compared to February.
Permits were at a seasonally adjusted annual 1.35 million rate. The Dow Jones
Industrial Average added 212.9 points or 0.87 percent to 24,573.04, the Nasdaq
gained 49.635 points or 0.70 percent to 7,156.28, while the S&P 500 was up
by 21.54 points or 0.81 percent to 2,677.84.
Crude oil
futures ended higher on Tuesday, boosted by investors' growing concern over the
potential for disruptions to crude supply, especially in the Middle East.
Besides, as per a report, Oil minister from Oman have called on OPEC and Russia
to extend their supply quota plan beyond 2018. Meanwhile, Kuwait's oil minister
said such a move is possible. He also said it would depend on market conditions
whether to extend this agreement beyond 2018 or to reach a permanent agreement
between OPEC and non-OPEC to support market stability. Benchmark crude oil
futures for May delivery rose 30 cents or 0.5 percent to settle at $66.52 a
barrel on the New York Mercantile Exchange. June Brent crude gained 16 cents or
0.2 percent to settle at $71.58 a barrel on London's Intercontinental Exchange.
Taking
the losses further for the second straight day against the US dollar, Indian
rupee ended weaker on Tuesday, on continued demand for the American unit
coupled with its growing strength overseas. Traders remained concerned with
former President Pranab Mukherjee's statement that the country's demographic
dividend runs the risk of turning into a demographic disaster if employment is
not generated. He added that the country has achieved an economic growth of
6-8% in the last couple of decades but the inequality among different classes
of the society is still huge and unacceptable. Investors failed to take support
with the India Meteorological Department (IMD) forecasting that India will
receive normal monsoon for a third consecutive year. On the global front,
dollar rebounded on Tuesday, partly boosted by a drop in the pound after a
disappointing reading on UK wage growth put the brakes on the recent sterling
rally. Finally, the rupee ended at 65.64, 15 paise weaker from its previous
close of 65.49 on Monday.
The FIIs as per Tuesday's data
were net sellers in equity and debt segments both. In the equity segment, the
gross buying was of Rs 3934.48 crore against gross selling of Rs 4283.09 crore,
while in the debt segment, the gross purchase was of Rs 345.64 crore with gross
sales of Rs 1438.50 crore. Besides, in the hybrid segment, the gross buying was
of Rs 0.21 crore against gross selling of Rs 0.09 crore.
The US markets ended higher on
Tuesday as traders reacted positively to a report from the Commerce Department
showing a rebound in housing starts in the month of March. The report said
housing starts jumped by 1.9 percent to an annual rate of 1.319 million in
March after tumbling by 3.3 percent to a revised 1.295 million in February.
Asian markets were trading mostly in green, as investor confidence stayed firm
on the back of Wall Street's advance following strong earnings. Indian equity
markets extended their winning streak to a ninth straight session on Tuesday
after the IMD forecast that the country will receive normal monsoon for a third
consecutive year. Today, the markets are likely to make an optimistic start
amid firm global cues. Traders will get some encouragement with International
Monetary Fund's (IMF) statement that India's GDP growth will accelerate in the
current and next fiscal years as structural reforms raise potential output. GDP
is forecast to grow 7.4 percent in the current fiscal from 6.7 percent in FY18
and accelerate further in FY20 to 7.8 percent. Market participants will also
get some support with Commerce and Industry & Aviation Suresh Prabhu's
statement that the government is working with the US to resolve all trade
issues even as America has decided to review India's eligibility to enjoy
duty-free access for certain products under a tax benefit scheme. Meanwhile,
the group of ministers (GoM) on Tuesday worked out a revamped return for goods
and services tax (GST) to help ease the burden on businesses. Stocks related to
sugar sector will get some boost with report that India's sugar production has
touched an all-time high of 29.98 million tonnes till April 15 in the current
season on higher cane output, leading to a surge in arrears to farmers at over
Rs 20,000 crore. There will be some important earnings announcements too, to
keep the markets buzzing.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,548.70
|
10,509.42
|
10,574.22
|
BSE Sensex
|
34,395.06
|
34,271.88
|
34,476.19
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Hindalco
|
164.18
|
239.40
|
236.00
|
244.80
|
SBI
|
159.22
|
248.15
|
245.67
|
251.57
|
ICICI Bank
|
154.06
|
291.75
|
287.95
|
294.40
|
Tata Motors
|
142.41
|
336.45
|
331.30
|
342.90
|
ITC
|
132.08
|
267.60
|
264.07
|
269.77
|
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