Daily Newsletter
NSE Intra-day chart (19 December 2017)
Top Gainers
Company NameClose% Change
Top Losers
Company NameClose% Change
World Indices
IndicesLast Trade% Change
Indices
IndicesLast Trade% Change
FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
Equity
Debt
Equity
Debt
Equity
Debt
 
Market Commentary 20 December 2017
Markets to get in consolidation mood on sluggish global cues


Extending northward journey for fourth straight session, Indian equity benchmarks ended the Tuesday's trade at all time closing high levels, with frontline gauges recapturing their crucial 33,800 (Sensex) and 10,450 (Nifty) levels. Markets started the session on optimistic note with traders continued getting strength with the assembly election results announced yesterday. Blue chips soared during the trade after victory of Bharatiya Janata Party (BJP) in his home state of Gujarat and Himachal Pradesh, raising hopes of continued reforms. Traders also took encouragement with the private report highlighting brighter growth prospects for India by FY20 and beyond. India's growth prospect is likely to see a slowdown in the next two years followed by recovery in the medium term, with 2019-20 GDP expected at around 7.6 per cent. Meanwhile, the government has sought Parliament's approval to spend a net additional Rs 33,380 crore ($5.21 billion) in new spending in the fiscal year to March 2018. The additional spending will be on top of an approved spending of Rs 21.4 lakh crore in the annual budget. Markets extended its rally in last leg of trade to end near intraday highs after Finance Ministry in its year end review report stated that overall fundamentals of the economy remained strong in the current financial year, on the back of firm macroeconomic indicators, improvement in World Bank's ease of doing business ranking and sovereign rating upgrade by Moody's. Market participants shrugged off report that the government seeking Parliament's approval to spend a net additional Rs 333.8 billion ($ 5.21 billion) in new spending in the fiscal year to March 2018. The additional spending will be on top of an approved spending of $ 334.9 billion in the annual Budget. Also, investors ignored India Ratings' report where it has warned that the farm debt waivers announced by the five large states together will widen the combined fiscal deficit of the states by Rs 1,07,700 crore or 0.65 percent of GDP this financial year. Finally, the BSE Sensex soared 235.06 points or 0.70% to 33,836.74, while the CNX Nifty was up by 74.45 points or 0.72% to 10,463.20.

 

The US markets closed lower on Tuesday, as the House of Representatives, passed a bill that would deliver sweeping corporate tax cuts. The process hit a procedural snag after US markets closed, however, which will force the House to vote again on the package on Wednesday. On the economy front, the deficit in the broadest measure of US trade fell in the July-September quarter to $100.6 billion, the smallest imbalance in three years. The current account trade imbalance declined by 19.2 percent from a second quarter deficit of $124.4 billion. Meanwhile, housing starts ran at a seasonally adjusted annual rate of 1.297 million in November. That's 3.3% higher than a revised October pace, and 12.9% higher than a year ago. Permits, which foreshadow future starts activity, ticked down 1.4% to a 1.298 million rate. Permits are 3.4% higher compared to a year ago. The Dow Jones Industrial Average lost 37.45 points or 0.15 percent to 24,754.75, the Nasdaq dropped 30.908 points or 0.44 percent to 6,963.85, and the S&P 500 edged lower by 8.69 points or 0.32 percent to 2,681.47.

 

Crude oil futures bounced back and ended higher on Tuesday, amid mixed signals on global production next year. OPEC says it will continue to curb production in an effort to re-balance oil markets, but U.S. shale output may surge. Also, the investors mulled over the prospect of fresh Middle East supply disruptions amid rising geopolitical tensions in the region after reports Saudi air defences intercepted a missile fired at Riyadh. Meanwhile, traders will be keeping a close eye on weekly US inventories data over the next 24 hours. Benchmark crude oil futures for January delivery ended higher by $0.31 or 0.54 percent at $57.47 a barrel on the New York Mercantile Exchange. Brent crude for February delivery was up by $0.37 to $63.77 a barrel on the ICE.

 

Indian rupee ended higher against the dollar on Tuesday, with the American currency coming under heavy selling by banks and exporters. Sentiment got up-beat with the private report highlighting brighter growth prospects for India by FY20 and beyond. The report also stated that India's growth prospect is likely to see a slowdown in the next two years followed by recovery in the medium term, with 2019-20 GDP expected at around 7.6%. Optimism remained among the investors with Union Finance Ministry's latest report stating that overall fundamentals of the economy remained strong in the current financial year, on the back of firm macroeconomic indicators, improvement in World Bank's ease of doing business ranking and sovereign rating upgrade by Moody's. Besides, gains in the local equity markets for the four consecutive sessions along with dollar's slide against some currencies overseas, too supported the rupee surge. On the global front, euro rose slightly against dollar on Tuesday, as investors took a cautious view over how much tax reforms, if passed, would boost the US economy. Finally, the rupee ended at 64.03, 20 paise stronger from its previous close of 64.23 on Monday.

 

The FIIs as per Tuesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 4984.26 crore against gross selling of Rs 4866.07 crore, while in the debt segment, the gross purchase was of Rs 856.83 crore with gross sales of Rs 143.00 crore.

 

The US markets ended marginally in red in the last session, giving up some of their previous session gains on profit taking as traders cashed in on the strength seen in recent sessions. Though House Republicans voted to approve the first major tax reform legislation in several decades, cutting tax rates for businesses and individuals. The Asian markets have made a mixed start and some indices in the region are down by around a quarter percent, with investors awaiting the final votes on U.S. tax-cut legislation. The Indian markets extended gains in the last session to end at record highs, on firm global cues and BJP's win in both Gujarat and Himachal Pradesh. Today, the start is likely to be mildly soft-to-cautious on tepid global cues and traders will be eyeing the final Senate vote on U.S. tax-cut legislation. Traders will however be getting some support with Commerce & Industry Minister Suresh Prabhu's statement that the government is working on a strategy to boost share of services in total exports from the country. There will be buzz in the PSU banking stocks with global rating agency Moody's latest report that capital raising by a number of public sector banks (PSBs), including PNB and UBI, is credit positive because it will help improve their loss-absorbing buffers. Moody's said that it signals improved access to the equity capital markets and will reduce PSBs' dependence on fund infusion from the government. Some action can be seen in the oil companies stocks, as the Finance minister Arun Jaitley has said that the Centre favours including petroleum products in the ambit of the Goods and Services Tax (GST) but it would want a consensus with the States before taking such a step.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

10463.20

10422.07

10488.27

BSE Sensex

33836.74

33714.88

33910.33

 

Nifty Top volumes

 

Stock

Volume

(in Lacs)

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

SBI

147.41

319.80

318.05

321.90

ICICI Bank

131.35

313.70

309.87

316.17

Vedanta

129.48

316.25

311.45

319.05

Power Grid

113.25

202.60

200.20

204.00

Tata Motors

96.87

420.10

411.07

425.42

 

  • Bharti Airtel through its subsidiaries has entered into a definitive agreement with Millicom under which Airtel Rwanda will acquire 100% equity interest in Tigo Rwanda.
  • HDFC is planning to raise Rs 2,000 crore by issuing debt securities on private placement basis.
  • M&M is targeting a revenue growth of 20% in the next financial year from its diesel genset business after entering the high kVA segment.
  • Maruti Suzuki India has inked an agreement with the Skill Development Ministry to impart training to youth and enhance their employment potential.
News Analysis