Indian equity bourses gained for
the third straight session and ended the trading session in green terrain on
Wednesday. Markets started on cautious note but soon gained momentum, after the
Trump administration said that there is an enormous potential for growth in the
India-US relationship, exuding confidence that the ongoing trade negotiations
could be worked through because of the friendship between the two nations.
Adding more comfort, Indian Ambassador to the US, Harsh Vardhan Shringla also
said that it is in the mutual interest of India and the US to have a smooth
trading relationship and they can find ways to deal with some of the minor
speed bumps. Key indices managed to hold their heads in green territory during
the whole day, despite mixed cues from global markets. The street remained
positive with Finance Minister Nirmala Sitharaman's statement that total bad
loans of commercial banks declined by Rs 1.02 lakh crore to Rs 9.34 lakh crore
in the 2018-19 fiscal on the back of steps taken by the government. However,
gains remain capped on the back of Chief Economic Advisor K V Subramanian's
statement that there is a need to tap foreign capital to accelerate growth from
the current level of 7 per cent to 8 per cent. He added that achieving
$5-trillion economy by 2024-25 is possible although the goal is slightly
stretched. Finally, the BSE Sensex gained 84.60 points or 0.22% to 39,215.64,
while the CNX Nifty was up by 24.90 points or 0.21% to 11,687.50.
The US markets ended lower on
Wednesday as investors digested mixed earnings results and economic data, while
a lack of progress on the Beijing-Washington tariff dispute remained a
headache. The weakness on markets also came following the release of a Commerce
Department report showing a bigger than expected drop in housing starts as well
as a nosedive in building permits. The Commerce Department said housing starts
slid by 0.9 percent to an annual rate of 1.253 million in June after slipping
by 0.4 percent to a revised rate of 1.265 million in May. Street had expected
housing starts to fall by 0.6 percent to a rate of 1.261 million from the 1.269
million originally reported for the previous month. The report also
unexpectedly showed a substantial pullback in building permits, an indicator of
future housing demand. Building permits plunged by 6.1 percent to an annual
rate of 1.220 million in June after climbing by 0.7 percent to a revised rate
of 1.299 million in May. Street had expected building permits to rise by 0.5
percent to a rate of 1.300 million from the 1.294 million originally reported
for the previous month. With the much steeper than expected drop, building
permits fell to their lowest level since hitting a rate of 1.201 million in May
of 2017. Besides, trading activity was somewhat subdued as traders stuck to the
sidelines as they wait for the earnings season to pick up steam being making
more significant bets. Dow Jones Industrial Average declined 115.78 points or
0.42 percent to 27219.85, Nasdaq dropped 37.59 points or 0.46 percent to
8185.21 and S&P 500 was down by 19.62 points or 0.65 percent to 2984.42.
Extending their previous session
losses, crude oil futures ended lower on Wednesday as US government data
revealed that domestic crude supplies fell for a fifth straight week. The
Energy Information Administration (EIA) reported that crude stockpiles were
down 3.1 million barrels for the week ended July 12. They were forecast to fall
by 4.2 million barrels. The American Petroleum Institute on Tuesday reported a
decline of 1.4 million barrels. Benchmark crude oil futures for August declined
84 cents or 1.5 percent to settle at $56.78 a barrel on the New York Mercantile
Exchange. September Brent dropped 69 cents or 1.1 percent to settle at $63.66 a
barrel on London's Intercontinental Exchange.
Indian rupee ended marginally lower against the American
currency on Wednesday, due to fresh dollar demand from banks and importers amid
rising crude oil prices. Sentiments remained down-beat with Chief Economic
Advisor K V Subramanian's statement that there is a need to tap foreign capital
to accelerate growth from the current level of 7 per cent to 8 per cent. He
added that achieving $5-trillion economy by 2024-25 is possible although the
goal is slightly stretched. Dollar's strength against major global currencies
overseas also weighed on the local unit. On the global front, euro fell to a
one-week low against the dollar on Wednesday, weighed down by expectations of
monetary policy easing and investors' preference for the higher-yielding U.S.
currency. Finally, the rupee ended at 68.82, 11 paise weaker from its previous
close of 68.71 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in equity segment, while they were net buyers in debt segment
In equity segment, the gross buying was of Rs 3719.21 crore against gross
selling of Rs 4077.69 crore,while in the debt segment, the gross purchase was
of Rs 2399.82 crore with gross sales of Rs 1611.65 crore. Besides, in the hybrid
segment, the gross buying was of Rs 0.31 crore against gross selling of Rs 1.17
crore.
The US markets ended lower on
Wednesday as weak results from CSX Corp stoked concerns that the protracted
trade war between the US and China could hurt corporate earnings. Asian markets
are trading in red in early deals on Thursday mirroring overnight fall on Wall
Street. Indian markets extended their gains for third straight session on
Wednesday led by banking, IT and FMCG stocks amid fall in crude oil prices.
Today, the markets are likely to make a negative start tracking weak global
cues. There will be some cautiousness with the International Monetary Fund's
statement that the US dollar was overvalued by 6% to 12%, based on near-term
economic fundamentals, while the euro, Japan's yen and China's yuan were seen
as broadly in line with fundamentals. It added that the dollar is overvalued is
likely to give Trump more fodder for his frequent complaints that dollar
strength is hampering US exports. However, some support may come later in the
day with a private report that budget proposals to address the country's
free-float problem can result in inflows of $25 billion. Finance minister
Nirmala Sitharaman's proposals include hiking the cap on foreign portfolio
investors from 24 percent in companies to get them on par with the sectoral FDI
limits and increasing the minimum public holding to 35 percent from the present
25 percent. Traders may also take note of NITI Aayog CEO Amitabh Kant's
statement that India needs to grow at the rate of 9-10 percent to lift the
majority of the population above the poverty line and this growth will not be
possible unless entrepreneurship in the country gets a massive boost.
Meanwhile, the Cabinet has approved seven amendments to the Insolvency and
Bankruptcy Code (IBC) to enforce strict timelines for the rescue of companies.
The amendments are aimed at filling the critical gaps in the corporate rescue
framework specified in the Code. There will be some buzz in the fast moving
consumer goods (FMCG) stocks as a private research firm lowered its growth target
for the FMCG sector. The firm has estimated growth in 2019 to be in the 9-10
percent range for 2019 as against 11-12 percent estimated earlier. There will
be some reaction in sugar stocks with report that the government has permitted
export of 1,239 tonnes raw sugar under its tariff-rate quota (TRQ) to the US,
which enables shipments to enjoy relatively low tariff. There will be lots of
earnings reaction based on the performance of the companies to keep the markets
buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,687.50
|
11,656.88
|
11,712.38
|
BSE Sensex
|
39,215.64
|
39,102.94
|
39,306.53
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
2,383.75
|
98.40
|
94.47
|
105.42
|
Tata Motors
|
252.37
|
167.90
|
165.35
|
171.40
|
State Bank of India
|
175.45
|
372.40
|
365.78
|
376.28
|
GAIL
|
113.34
|
143.40
|
141.77
|
145.72
|
Indiabulls Housing Finance
|
111.92
|
668.20
|
647.67
|
680.72
|
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