Weakness hit over Indian equity
benchmarks on Thursday, with both the larger peers, Sensex and Nifty, closing
lower by around 1.25% each. The markets made a lackluster start of the day, as
tax collection missed target by a wide margin. As against a steep 17.5 percent
higher tax collection budgeted for the full year, the government could mop-up
only 4.7 percent more so far this year, with the direct tax kitty growing to Rs
5.50 lakh crore as of September 17, up from Rs 5.25 lakh crore a year-ago.
Adding more concerns, the India Meteorological Department's (IMD) report showed
that monsoon rains in India in the week to September 18 were above average for
a third straight week, with floods hitting many districts in the central parts
of the country and damaging crops such as soybean and pulses. Indices remained
under pressure for the whole day, amid a private report that India's slowdown
& a simmering shadow banking crisis is putting Prime Minister Narendra
Modi's goal of crafting a $5 trillion economy by 2025 at risk. Traders paid no
heed towards reports that the government decided to set up an 11-member panel.
The latest decision is in line with the government's objective of promoting
ease of doing business for law abiding corporates, fostering improved corporate
compliance for stakeholders at large & also to address emerging issues
having impact on the working of companies in the country. Investors also
overlooked Niti Aayog CEO Amitabh Kant's statement that the government is doing
everything possible to turn around the Indian economy & bring it back to a
high trajectory growth path. Finally, the BSE Sensex fell 470.41 points or
1.29% to 36,093.47, while the CNX Nifty was down by 135.85 points or 1.25% to
10,704.80.
The US markets ended mostly
higher on Thursday following better-than-expected housing and manufacturing
data a day after the second interest rate cut of 2019 by the Federal Reserve. A
report on the US housing market and manufacturing data in the Philadelphia area
helped to hearten investors about the state of the US economy. The National
Association of Realtors said existing-home sales rose 1.3% in August from the
previous month to a seasonally adjusted annual rate of 5.49 million, marking
the strongest pace of sales since March of last year. The Philadelphia Federal
Reserve's manufacturing index fell to 12.0 in September after registering a
reading of 16.8 in August. Any reading above zero indicates improving
conditions. Meanwhile, after reporting a much bigger than expected drop in
first-time claims for US unemployment benefits in the previous week, the Labor
Department released a report showing a modest rebound in initial jobless claims
in the week ended September 14. The report said initial jobless claims inched
up to 208,000, an increase of 2,000 from the previous week's revised level of
206,000. Street had expected jobless claims to climb to 213,000 from the
204,000 originally reported for the previous week. Despite the upward revision,
jobless claims in the previous week were at their lowest level since hitting a
nearly 50-year low of 193,000 in April. Some cautiousness prevailed in the
markets amid continued uncertainty about the outlook for interest rates
following the Federal Reserve's monetary policy announcement on Wednesday. The
Fed lowered interest by 25 basis points as expected but indicated officials are
mixed about whether the central bank should cut rates again before the end of
the year. While seven participants expect another rate cut before the end of
year, five expect rates to remain unchanged and another five expect rates to be
raised back to 2 to 2-1/4 percent.
Crude oil prices ended marginally
higher on Thursday amid reports disruptions to refining activity in Texas due
to flooding from Tropical Storm Imelda and a likely drop in demand for crude.
Oil prices got an early boost after a private report that Saudi Arabia was
looking to buy oil and additional oil products from Iraq and possibly other
neighbors, including a request for as much as 20 million barrels of oil from
Iraq, as it scrambles to maintain its reputation as a reliable supplier after
missiles knocked out around half of the country's crude production over the
weekend. Benchmark crude oil futures for October gained 2 cents to settle at
$58.13 a barrel on the New York Mercantile Exchange. November Brent surged 80
cents or 1.3 percent to settle at $64.40 a barrel on London's Intercontinental
Exchange.
Indian
rupee ended marginally weaker against the American currency on Thursday, due to
fresh dollar demand from banks and importers. Sentiments remained down-beat
with the India Meteorological Department's (IMD) report that monsoon rains in
India in the week to September 18 were above average for a third straight week,
with floods hitting many districts in the central parts of the country and
damaging crops such as soybean and pulses. Heavy losses in domestic equity
markets also weighed on the domestic unit. However, losses remain capped as
some optimism remained among the traders with Niti Aayog CEO Amitabh Kant's
statement that the government is doing everything possible to turn around the
Indian economy and bring it back to a high trajectory growth path. On the
global front, Japanese yen rallied on Thursday after the Bank of Japan kept
interest rates on hold, while the dollar struggled to move higher despite the
Federal Reserve offering mixed signals about the path for further easing.
Finally, the rupee ended at 71.34, 10 paise weaker from its previous close of
71.24 on Wednesday.
The
FIIs as per Thursday's data were net sellers in both equity and debt segments.
In equity segment, the gross buying was of Rs 2841.75 crore against gross
selling of Rs 3773.98 crore, while in the debt segment, the gross purchase was
of Rs 1449.27 crore with gross sales of Rs 1347.36 crore. Besides, in the
hybrid segment, the gross buying was of Rs 6.12 crore against gross selling of
Rs 6.88 crore.
The US markets ended mostly
higher on Thursday with modest gains as the US and China kicked-off deputy
level trade negotiations for the first time in close to two months. Asian
markets are trading mostly in green on Friday as economic stimulus around the
world eased fears of economic deceleration. Indian markets ended lackluster
session in red territory on Thursday, with cut of over a percent, amid selling
seen across the board as oil prices rose sharply once again. Today, the markets
are likely to open in green amid positive leads from Asian peers. Traders will
be getting some encouragement with Reserve Bank of India (RBI) Governor
Shaktikanta Das' statement that there is room for rate cut as the growth has
slowed down. The policy objective of the monetary policy is to maintain price
stability, keeping in mind the objective of growth. Separately, Das expressed
the hope that the ongoing crisis in Saudi Arabia that has spiked crude prices
to multi-year highs will have limited impact on inflation and fiscal numbers.
Some support will also come with report that Finance minister Nirmala
Sitharaman is likely to unveil measures to boost economic growth, which slipped
to a six-year low of 5% in the April-June quarter. Investors will be looking
ahead to the Goods and Services Tax (GST) Council meeting later in the day to
take up a host of issues and on top of the agenda will be recommendations made
by the GST Council's Fitment Committee. As per the report, the committee has
rejected the proposal to cut GST on biscuits and for the auto sector. However,
some cautiousness may come with report that the Organisation for Economic
Co-operation and Development (OECD) appears to be the most pessimistic on
India's economy among think tanks, as it cut the GDP growth forecast by 1.3
percentage points to 5.9 per cent for 2019-20. Meanwhile, capital market
regulator SEBI has set up a high-level panel to suggest possible structures and
regulations for creating social stock exchanges to facilitate listing and
fund-raising by social enterprises as well as voluntary organizations. Banking
stocks will be in focus as credit rating agency Moody's said that the
increasing liquidity stress among real estate developers would indirectly hit Indian
banks and is thus credit negative for the domestic lenders. There will be some
buzz in the power stocks as India Ratings & Research (Ind-Ra), a Fitch
Group company, maintained a stable outlook for wind and solar power sectors for
the remaining part of financial year 2019-20 (FY20).
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,704.80
|
10,634.97
|
10,809.92
|
BSE Sensex
|
36,093.47
|
35,849.54
|
36,475.67
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in
Lacs)
|
Yes Bank
|
3,212.71
|
54.10
|
49.80
|
61.60
|
Tata Motors
|
510.12
|
124.20
|
121.82
|
125.97
|
SBI
|
233.88
|
274.05
|
271.42
|
278.32
|
Indiabulls Housing Finance
|
228.49
|
394.75
|
375.07
|
418.52
|
ICICI Bank
|
226.48
|
386.60
|
382.07
|
393.42
|
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