Indian equity
benchmarks extended southward journey for fourth straight session to end below
their crucial 34,900 (Sensex) and 10,600 (Nifty) levels, as doubts whether the
Bharatiya Janata Party (BJP) could prove its majority in the southern state of
Karnataka weighed on investors' sentiment. Markets started the session on a
pessimistic note with a private report stating that Reserve Bank of India is
likely to keep policy rates unchanged in the forthcoming monetary policy
review, but will have a hawkish tone on concerns over inflation and as crude
oil prices remain elevated. Traders shrugged off UN's report that India's
economy is projected to grow 7.6% in fiscal year 2018-19, remaining the fastest
growing economy in the world, as robust private consumption and benefits from
past reforms help the country's GDP gain momentum but sustained recovery in
private investment remains a crucial challenge. Market participants failed to
get any sense of relief with Niti Aayog CEO Amitabh Kant's statement that crony
capitalism in India will come to an end with the new bankruptcy code though it
was facing some teething troubles. Markets extended losses in last leg of trade
on private report stating that crude oil prices may rise further in the coming
months, following which India's current account deficit will be around 2.4% in
2018- 19. Separately, India's oil imports from Iran surged to 640,000 barrels
per day (bpd) in April, its highest level since October 2016, according to data
from shipping and industry sources, as refiners raised purchases ahead of
looming US sanctions against Tehran. Meanwhile, in a major political development,
the Supreme Court held a hearing in the Karnataka government formation matter,
directing that the Bharatiya Janata Party (BJP) leader and the state's new
chief minister, B S Yeddyurappa, must conduct the floor test on Saturday at 4
pm. Finally, the BSE Sensex declined 300.82 points or 0.86% to 34,848.30, while
the CNX Nifty was down by 86.30 points or 0.81% to 10,596.40.
The US markets
closed lower on Friday, with major indices posting modest weekly declines as
investors grappled with lingering uncertainty over trade negotiations between
the US and China, as well as bond yields that climbed this week to the highest
level since 2011. Cleveland Fed President Loretta Mester said that rules
adopted after the financial crisis that have made big US banks more resilient
over the last decade should be tested in the next downturn before they are
reduced in any major way. The official added that the US economic outlook is as
strong as it has been in a long time. But that does not mean that
little-tested, so-called countercyclical standards, which would raise
requirements on banks during good times and ahead of a downturn, should be
tightened. Mester added that instead, existing capital and liquidity standards
should be set somewhat higher than they would be if we had more experience with
and confidence in the countercyclical tools. Meanwhile, interest rates on US
30-year fixed-rate mortgages rose to the highest in seven years as a bond
market selloff this week propelled 10-year yields to the highest since July
2011. The US mortgage finance agency added that thirty-year mortgage rates
averaged 4.61 percent in the week ended May 17, matching the level last seen in
May 2011. A week earlier, 30-year rates averaged 4.55 percent. Average 15-year
mortgage rates rose to 4.08 percent in the latest week from 4.01 percent, while
interest rates on five-year adjustable mortgages averaged 3.82 percent, up from
3.77 percent a week earlier. The Nasdaq dropped 28.134 points or 0.38 percent
to 7,354.34, the S&P 500 was down by 7.16 points or 0.26 percent to
2,712.97, while the Dow Jones Industrial Average added 1.11 points to
24,715.09.
Crude oil
futures ended lower on Friday, after wavering between gains and losses in
anticipation of renewed US economic sanctions on Iran. Besides, speculation
that OPEC supplies are declining, supported the crude prices. Moreover, the
overall US rig count continues its climb with a slight gain this week. Baker
Hughes' calculation of active US rigs increased by 1 unit during the week ended
May 18 to 1,046. Rigs drilling for oil were unchanged at 844 rigs compared with
last week, while those rigs targeting natural gas gained 1 unit to 200 rigs.
Benchmark crude oil futures for June delivery dropped 21 cents or 0.30 percent
to settle at $71.28 a barrel on the New York Mercantile Exchange. July Brent
crude slipped 79 cents or 1.00 percent to settle at $78.51 a barrel on London's
Intercontinental Exchange.
Snapping
2-day winning streak, Indian rupee ended considerably weaker against the
American currency on Friday, due to demand for greenback by banks and
importers. Sentiments turned pessimistic with a private report stating that
Reserve Bank of India is likely to keep policy rates unchanged in the
forthcoming monetary policy review, but will have a hawkish tone on concerns
over inflation and as crude oil prices remain elevated. Investors paid no heed
towards UN's report that India's economy is projected to grow 7.6% in fiscal
year 2018-19, remaining the fastest growing economy in the world, as robust
private consumption and benefits from past reforms help the country's GDP gain
momentum but sustained recovery in private investment remains a crucial
challenge. The fall in the rupee was also triggered by dollar's strength
against major global currencies overseas along with extremely bearish local
equity markets. On the global front, US dollar traded higher against most other
major currencies as Treasury yields rose sharply in recent days after solid
economic data. Finally, the rupee ended at 68.00, 32 paise weaker from its
previous close of 67.68 on Thursday.
The FIIs as per Friday's data were
net sellers in equity and debt segments both. In equity segment, the gross buying
was of Rs 5180.25 crore against gross selling of Rs 5592.29 crore, while in the
debt segment, the gross purchase was of Rs 573.57 crore with gross sales of Rs 857.21
crore. Besides, in the hybrid segment, the gross selling was of Rs 0.29 crore against
no buying.
The US markets
ended mostly lower on Friday, as uncertainty about the outcome of the second
round of trade talks between the U.S. and China kept traders on the sidelines.
Asian markets are trading mostly in green in early deals on Monday after fears
of a trade war between the U.S. and China receded following weekend developments.
Indian equity benchmarks ended lower for a fourth straight session on Friday as
sustained selling by foreign investors in recent sessions, rising crude oil
prices and concerns about near term outlook for the economy weighed on sentiment.
Today, the markets are likely to start slightly in green tailing firm Asian
peers. Sentiments will get some support with economic affairs secretary Subhash
Chandra Garg's statement that India's growth trajectory continues to be stable
with strong macroeconomic fundamentals, despite a continual rise in global oil
prices and hardening bond yields. He said, the fiscal deficit programme has
been going on very smoothly and there has been no reason for us to believe that
there will be any greater impact. Traders will also get some support with
report that India is the sixth wealthiest country in the world with a total
wealth of $8,230 billion, while the US is the richest nation globally. However,
there will be some concern on report that even as monsoon is predicted to be
normal this year, its uneven distribution could spike food prices, and
inflation is likely to edge further. There will be buzz in banking counters as
the finance ministry expects banks to write back more than Rs 1 lakh crore
after the resolution of all 12 NPA cases referred to insolvency proceedings by
the RBI it its first list. Meanwhile, Indostar Capital Finance, which recently
concluded its initial public offer, will make stock market debut today. 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
|
10,596.40
|
10,565.35
|
10,651.20
|
BSE Sensex
|
34,848.30
|
34,725.58
|
35,067.07
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ICICI Bank
|
174.70
|
286.10
|
282.03
|
292.73
|
ITC
|
154.22
|
282.30
|
277.02
|
286.57
|
SBI
|
118.73
|
238.85
|
236.47
|
242.62
|
Tata Motors
|
116.89
|
304.60
|
300.40
|
311.90
|
Bharti Airtel
|
112.06
|
361.35
|
354.92
|
367.92
|
Reliance Industries' telecom arm -- Jio has entered into exclusive partnership for the Indian market with Screenz.
Bharti Airtel and Amazon India have entered into a strategic partnership, with an aim to jointly drive smartphone adoption across the country.
Tata Motors has signed a MoU with the National Institute of Technology, Trichy.
L&T's construction arm -- L&T Construction -- has bagged orders worth Rs 1,504 crore through Heavy Civil Infrastructure business unit.