Rising for the third session in a
row, Indian equity benchmarks settled at record closing highs on Monday, after
exit polls predicted win for Bharatiya Janata Party-led National Democratic
Alliance (NDA) in the recently concluded general elections. After a fabulous
start, key indices remained in the grip of bulls throughout the session, aided
by the Reserve Bank of India's (RBI) data report that the country's foreign
exchange reserves rose by $1.368 billion to reach $420.055 billion in the week
to May 10 on account of a rise in foreign currency assets. In the previous
week, the reserves had increased by $171.9 million to $418.687 billion. Traders
remained optimistic amid reports that the government is considering various
options to adequately empower the Reserve Bank of India (RBI) to deal with
banks' stressed assets under the Insolvency and Bankruptcy Code following the
Supreme Court order, quashing February 12 circular of the central bank. Markets
maintained gaining momentum in the second half of the trading session, despite
weak cues from European markets. Market participants got comfort with a private
report stating that Indian retail real estate sector attracted private equity
investment worth $1.2 billion during 2017-18 calendar years, double from the
previous two years. The report attributed the sharp rise in private equity (PE)
inflow to further liberalisation in FDI policies such as 51 per cent FDI in
multi-brand retail and 100 per cent FDI in single-brand retail under the
automatic route. The street paid no heed towards India Meteorological
Department's (IMD) latest report indicating that pre-monsoon rainfall in the country
from March to May recorded a deficiency. The IMD recorded 75.9 millimetres of
rainfall from March 1 to May 15 as against the normal rainfall of 96.8
millimetres, which comes to around minus 22%. Finally, the BSE Sensex gained
1421.90 points or 3.75% to 39,352.67, while the CNX Nifty was up by 421.10
points or 3.69% to 11,828.25.
The US markets settled lower on
Monday amid ongoing concerns about the escalating US-China trade dispute after
Google suspended some of its business with Chinese tech giant Huawei. Google
has cut Huawei off from business involving the transfer of hardware, software
and technical services, complying with an order by President Donald Trump
blocking the sale or transfer of US technology to Huawei. The blow to Huawei
added to trade concerns sparked by last Friday's reports that the scheduling of
the next round of US-China trade talks is in flux because it is unclear what
the two sides would discuss. Besides, private report said that discussions
regarding scheduling the next round of talks have not taken place since Trump
signed an executive order ramping up scrutiny of Chinese telecom companies. On
the economic front, the Federal Reserve Bank of Chicago's national activity
index plunged to a negative 0.45 in April, down from an upwardly revised
positive 0.05 in March and a negative 0.31 in February. A reading less than
zero indicates below-trend economic growth. Atlanta Federal Reserve Bank
President Raphael Bostic said that he was not sure whether the central bank
would move next to raise or lower interest rates, while saying he expects
growth of 2.25% to 2.5% this year, a slowdown from last year's levels. Dow
Jones Industrial Average declined 84.10 points or 0.33 percent to 25679.90,
Nasdaq dropped 113.91 points or 1.46 percent to 7702.38 and S&P 500 was
down by 19.30 points or 0.67 percent to 2840.23.
Crude oil futures ended higher on
Monday, but Brent crude prices giving up an earlier rise to finish lower.
Traders weighed signs that the Organization of the Petroleum Exporting
Countries will decide to extend its production-cut agreement following a
committee meeting over the weekend between members and nonmembers of the
oil-producer group. Last December, the group agreed to cut output by a
collective 1.2 million barrels a day, a move that has driven gains for oil prices
this year, though the agreement expires at the end of June. Benchmark crude oil
futures for June gained 34 cents or 0.5 percent to settle at $63.10 a barrel on
the New York Mercantile Exchange. However, July Brent crude fell 24 cents or
0.3 percent to settle at $71.79 a barrel on London's Intercontinental Exchange.
Indian rupee ended significantly higher against dollar on
Monday, after exit poll results suggested another term for the ruling NDA
government. Sentiments were buoyed by the Reserve Bank of India's (RBI) data
report that the country's foreign exchange reserves rose by $1.368 billion to
reach $420.055 billion in the week to May 10 on account of a rise in foreign
currency assets. In the previous week, the reserves had increased by $171.9
million to $418.687 billion. Splendid gains of local equities coupled with
dollar losing sheen against some other currencies overseas also helped the
domestic currency rebound. On the global front, dollar held onto last week's
gains on Monday as investors waited for Fed minutes that may give more clues on
what prompted U.S. policymakers to strike a broadly neutral stance this month.
Finally, the rupee ended at 69.74, 49 paise stronger from its previous close of
70.23 on Friday.
The FIIs as per Monday's data were
net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 4128.13 crore against gross selling of Rs 5255.48 crore, while
in the debt segment, the gross purchase was of Rs 432.45 crore with gross sales
of Rs 732.11 crore. Besides, in the hybrid segment, the gross buying was of Rs
10.98 crore against gross selling of Rs 10.92 crore.
The US markets ended in red
territory on Monday as souring US-China trade relations continued to weigh on
sentiment, with selling pressure in technology stocks weighted on markets.
Asian markets are trading mostly lower on Tuesday on mounting worries the White
House's black-listing of Chinese telecom giant Huawei Technologies could
further inflame already tense relations between the Washington and Beijing.
Indian markets continued their rally for third straight session on Monday and
settled at record highs, with gains of around 4% each, after exit polls
predicted the return of the Narendra Modi-led National Democratic Alliance
(NDA) to power. Today, the start is likely to be slightly in green, extending
precious session's rally. Some support will come with IHS Markit report stating
that India's economic policy will continue to focus on maintaining strong
economic growth and creating jobs for the country's large and growing
population. It added that the government will also focus on the expansion of
already announced policies including infrastructure investment, the Goods and
Services Tax (GST) rationalisation and financial sector regulations. Meanwhile,
the Food Safety and Standards Authority (FSSAI) has permitted small organic
producers, having an annual turnover of over Rs 12 lakh, to sell their produce
directly to end consumers without certification till April 2020, but will not
be able to use Jaivik Bharat logo on their products. The Jaivik Bharat logo is
an identity mark to distinguish organic products from non-organic ones.
Besides, SEBI came out with a framework for Innovation Sandbox that will help
provide financial technology firms and unregulated market participants an
environment to test their new solutions with markets data. However, some
cautiousness may come with report that rising trade tensions have prompted the
World Trade Organization (WTO) to dim its prospect for trade growth in the
second quarter of the 2019 calendar year. The WTO said world trade growth is
likely to remain weak into the second quarter of 2019. It pointed towards
falling levels of growth in international air freight, automobile production,
sales and trade in agriculture raw materials. There will be some buzz in the
power sector stocks with rating agency ICRA's statement that power regulator,
the Central Electricity Regulatory Commission (CERC) allowing a tariff relief
to independent power projects (IPP) affected by domestic coal shortfall is
positive for the power generation segment. There will be some reaction in
infrastructure sector stocks with the Reserve Bank of India's (RBI) data
showing that bank credit to infrastructure sector grew by 18.5 per cent to Rs
10.55 lakh crore as of 2018-19, the highest since 2012-13 fiscal. Outstanding
bank credit to the sector was Rs 8.91 lakh crore as at March 2018. There will
be lots of earnings reaction based on the performance of the companies.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,828.25
|
11,664.90
|
11,918.40
|
BSE Sensex
|
39,352.67
|
38,810.95
|
39,653.47
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
822.05
|
143.55
|
138.73
|
146.63
|
SBI
|
532.07
|
344.70
|
335.20
|
350.00
|
ICICI Bank
|
333.51
|
407.70
|
401.80
|
413.80
|
Tata Motors
|
298.74
|
190.15
|
182.27
|
195.02
|
Indiabulls Housing Finance
|
197.74
|
814.55
|
754.70
|
860.65
|
TCS is expecting significant growth in the coming years across markets like Latin America, India and South Africa that have historically lagged in technology spending.
Coal despatches by Coal India to the power sector have been rose marginally by 1% to 40.7 MT in April 2019 compared to 40.3 MT in the year-ago month.
Dr Reddy's Laboratories is planning to spend upto $300 million on research and development during financial year 2019-2020.
L&T has acquired 73,953 shares of Mindtree from the open market on May 20, 2019.