Indian benchmarks failed to extend the gaining momentum on
Friday as jittery investors chose to take some profits off the table amid
hawkish comments from New York Fed President William Dudley and San Francisco
Fed President John Williams over US interest-rate increases. Apart from the
global concerns, markets also witnessed some disappointing developments on the
domestic front which did not augur well with investor's sentiments such as
Indian rupee, which weakened for the second consecutive session against the US
dollar. Market participants also remained cautious ahead of the announcement of
a new governor for the Reserve Bank of India (RBI) expected anytime now.
However, losses remained capped as Moody's Investors Service retained India's
growth forecast at 7.5% for 2016 and stated that the outlook for emerging
markets economies stabilized on account of the modest recovery in commodity
prices, better capital flows and a better near-term outlook for growth in
China. Some support also came in from reports that foreign portfolio investors
(FPIs) bought shares worth a net Rs 162.17 crore on August 18, 2016. Meanwhile, good buying was observed in
selected metal stocks as India
has slapped anti-dumping duty on certain cold-rolled flat steel products from
four nations including China
and South Korea
to guard domestic industry from cheap imports. Oil producing majors also gained
some traction after Brent crude topped $50 for the first time in six weeks as
major producers prepared to discuss a possible output freeze. Further, many
stock specific actions popup during the session like Coal India
came under pressure after the reports that the government's proposed 5-10%
stake-sale in the company and is likely to happen in Q4 of FY17. On the global
front, Most Asian markets drifted lower on Friday, however, Japanese markets
closed modestly higher. Back home, the local benchmark got off to a soft start
as the indices showed signs of consolidation in early trade, amid weak Asian
cues. Thereafter, the frontline indices oscillated in an extremely tight range
through the morning session as market participants remained sideways in the
absence of any significant trigger at domestic front. Finally, the BSE Sensex
slumped by 46.44 points or 0.17% to 28077.00, while the CNX Nifty dropped 6.35
points or 0.07% to 8,666.90.
The US
markets closed lower on Friday, as investors worried about whether the Federal
Reserve will raise interest rates sooner rather than later. A rise in bond
yields and a fall in gold may signal that bond investors are betting that the
Fed might return to tightening monetary policy. Friday's moves followed
comments from San Francisco Fed President John Williams, who stated that he
would like to see another rate increase sooner rather than later, suggesting he
is in the camp of central-bank officials who would like a rate increase as soon
as September. On the economy front, the moderate but steady pace of expansion
should continue for the rest of the year, according to an analysis of
indicators that typically correlate with the future health of the economy. The
Conference Board stated that its leading economic index rose 0.4% in July. The
index, which consists of ten indicators from stock prices to jobless claims to
hours worked in manufacturing, rose for a second month. Eight of the ten
indicators rose, with the hours worked giving the biggest jolt to the index. Over
the last six months, the index has grown at a pace equivalent to a 2.1% annual
rate. The only negative contributor in July was average consumer expectations
for business conditions. The Dow Jones Industrial Average lost 45.13 points or 0.24
percent to 18,552.57, Nasdaq was down 1.77 points or 0.03 percent to 5,238.38,
while S&P 500 dropped 3.15 points or 0.14 percent to 2,183.87.
Crude
oil futures consolidated on Friday, though Nymex crude remained near seven-week
highs following a choppy, volatile session. Though, traders' energy traders
largely shrugged off a considerable increase in US
oil rigs last week. Oil services firm Baker Hughes said that the US
weekly oil rig count rose by 10 to 406 last week. The number of oil rigs
nationwide has increased in each of the last eight. Benchmark crude oil futures
for September delivery gained $0.23 or 0.48 percent to close at $48.45 a
barrel after trading in a range of $47.94 and $48.74 a barrel on the New York
Mercantile Exchange. In London,
Brent oil futures for October delivery declined by $0.05 or 0.10 percent to $50.82
a barrel on the ICE.
Indian rupee depreciated substantially against dollar on
Friday as investors remained cautious on the expectation that the Reserve Bank
of India (RBI) may delay cutting interest rates after recent higher inflation
data. Some losses in the domestic equity
market and anxiety ahead of the announcement of a new governor for the RBI
expected anytime now, have also contributed to rupee's fall. On the global
front, dollar strengthened against other major currencies after hawkish
comments from New York Fed President William Dudley and San Francisco Fed
President John Williams over US interest-rate increases. Finally the rupee ended at 67.06, weaker by 25
paise from its previous close of 66.81 on Thursday.
The
FIIs as per Friday's data were net buyers in equity and debt segments both. In
equity segment, the gross buying was of Rs 4285.83 crore against gross sell of
Rs 4030.54 crore, while in the debt segment, the gross purchase was of Rs
1297.70 crore with gross sales of Rs 913.73 crore.
The US
markets turned lower in last session despite positive economic data as the
traders remained concerned about the timing of interest rate hike by Federal
Reserve. The Asian markets have made a mixed start, with some indices trading
marginally in red, as hawkish comments from a Federal Reserve official boosted
the likelihood of a US
interest-rate increase this year. The Indian markets declined in last session,
paring some gains of previous trading, today the start of the F&O expiry week is likely to
be cautious but in green on mixed regional cues, but as the trade progress traders will be getting some encouragement
with the appointment of Urjit Patel, a known inflation warrior, as Raghuram
Rajan's successor at the Reserve Bank of India. Patel's appointment is also an
indirect acknowledgment of Raghuram Rajan's work and legacy. The government is
confident that Urjit Patel, will be "more balanced" in his approach to managing
inflation and will be mindful of the need to push growth, considered critical
for creating jobs. Global rating agency Moody's too has said that clean-up of India's
banks is good for India's
credit rating and it expects the process to continue under governor-designate
Urjit Patel. Meanwhile, marketmen will also be getting some support with Francis
Gurry, director-general at the World Intellectual Property Organization stating
that India can
break into the top-25 rank in the next 10 years. Also, Union Labour Minister
Bandaru Dattatreya has said that EPFO will raise proportion of its investments
in exchange traded funds (ETFs) from the present 5 per cent and a final
decision on the quantum for current fiscal would be taken very soon. Some boost
can also come with report that foreign investors have deployed over Rs 7,700
crore in the Indian stock market so far this month, driven by global and
domestic factors. There will be some buzz in the aviation sector, on report
that domestic air passenger traffic jumped by nearly 26 percent in July,
registering double-digit growth for the 24th consecutive month with lower fares
attracting more fliers. Local airlines flew 85.08 lakh passengers in July
compared to 67.62 lakh fliers recorded in the year-ago period.
Support and Resistance: NSE (Nifty)
and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8666.90
|
8643.80
|
8693.30
|
BSE Sensex
|
28,077.00
|
27997.98
|
28184.16 |
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
SBI
|
398.23
|
258.50
|
254.67
|
261.17
|
Bank of Baroda
|
142.67
|
161.65
|
156.90
|
164.60
|
Hindalco
|
136.25
|
158.95
|
156.98
|
160.18
|
ICICI Bank
|
132
|
253.90
|
251.73
|
255.88
|
Coal India
|
97.64
|
334.15
|
330.70
|
339.00 |
- Wipro
has picked up a minority stake in Israeli cyber-security startup Intsights
Cyber Intelligence for $1.5 million, months after the Bangalore-based firm
invested in Israeli venture capital firm TLV Ventures.
- Tata
Motors, the country's largest automaker by revenues, has delivered 241 buses to
the Karnataka State Road Transport Corporation, under the Jawaharlal Nehru
National Urban Renewal Mission.
- ICICI
Bank, India's
largest private sector bank, has unveiled Asia's first
payment service using a smartphone keyboard.
- HDFC
Bank is planning to set up a 200 seater business process outsourcing centre in Bhubaneswar.
- The
Centre government has imposed an additional penalty of $380 million on Reliance
Industries and its partners for producing less than targeted natural gas from
eastern offshore KG-D6 fields for 2014-15.