Monday's trading session was
clearly of consolidation as the Indian benchmark indices appeared a bit
fatigued and remained in tight range for most part of the day. Sentiments got
some support after the government last week finalized rates for the upcoming
goods and services tax (GST). The government on Friday unveiled four bands of
rates under the GST for services in line with those applying to goods, a big
departure from the current single rate of 15% applied on most services. Adding
the optimism of investors, Revenue Secretary Hasmukh Adhia said Inflation will
fall by 2% on implementation of the GST and create buoyancy in the economy.
With the stage set for the biggest overhaul of India's tax system since Independence,
the government will launch a massive awareness campaign to educate consumers
about GST so that they are not fleeced by traders in the name of new tax. Some
support also came after Maharashtra Assembly passed the GST Bill in today's
session of its lower house. GST, which will come in force from July 1, will
unify the country's economy into a common market and eliminate a string of
central and state levies. The act is significant as the BMC gets a considerable
share of its revenue through octroi, which will now be scrapped with the
introduction of the GST regime.
Meanwhile, Foreign Direct Investment (FDI) inflows into the country
touched a new high of $60.08 billion in 2016-17. FDI Inflows grew by 8% over
the previous high of $55.6 billion posted in 2015-16. Increased FDI inflows in
the country are largely attributed to intense and bold policy reforms the
government undertook to bring pragmatism in the FDI regime. On the global
front, Asian markets ended mostly higher on Monday as the Japanese yen weakened
and US crude futures climbed back above $50 per barrel on expectations that
major oil producing nations might extend their production cuts beyond an
agreed-on June deadline when they meet on May 25. Finally, the BSE Sensex
gained 106.05 points or 0.35% to 30570.97, while the CNX Nifty was up by 10.35
points or 0.11% to 9,438.25.
The US markets closed higher on
Monday, for a third straight session, recovering most of last week's sharp loss
as tech and industrial stocks rallied in a day marked by lighter than usual
volume. With the bulk of earnings season over, investors will scrutinize US
political news, like headlines last week that triggered a sharp midweek plunge
for stocks. On the economy front, US hiring improved and factories were busier
last month, enough to overcome weaker consumer spending and drive up a broad
measure of April national economic activity released Monday by the Chicago
Federal Reserve. The Chicago Fed national activity index jumped to a positive
0.49 in April from a positive 0.07 in March. That's the highest reading for the
index since March 2014. The index's three-month moving average, which tends to
offer a clearer picture of the trend in economic activity than the volatile
monthly reading alone, rose to a positive 0.23 in April from a neutral reading
a month earlier. The three-month average has been neutral or positive for a
fifth consecutive month. The contribution of the personal consumption and
housing category was the only drag on the activity index as it ticked down to
negative 0.08 in April from negative 0.06 in March. The Dow Jones Industrial
Average gained 89.99 points or 0.43 percent to 20,894.83, Nasdaq added 49.92
points or 0.82 percent to 6,133.62, while S&P 500 edged higher by 12.29
points or 0.52 percent to 2,394.02.
Crude oil futures extended their
gains on Monday, amid growing expectations that OPEC members will agree to
extend production cuts, after Iraq supported Saudi Arabia's view that cuts
needed to be extended for a prolonged period until March 2018. Saudi Energy
Minister Khalid al-Falih is meeting with Iraqi officials to hammer out the
details of the agreement. Meanwhile, German Chancellor Angela Merkel said the
euro is "too weak." The dollar softened on her remarks, boosting oil
prices. Benchmark crude oil futures for June delivery ended higher by $0.40 or 0.8
percent to $50.73 on the New York Mercantile Exchange. In London, Brent crude
for July delivery ended up by $ 0.28 to $53.89 on the ICE.
Indian
rupee strengthened for second consecutive session on Monday, on increased
selling of the American currency by exporters and banks. Sentiments remained
optimistic with Revenue Secretary Hasmukh Adhia's statement that inflation will
fall by 2 percent on an implementation of the goods and services tax (GST) and
will create buoyancy in the economy. Some support also came with report that
Foreign Direct Investment (FDI) inflows into the country touched a new high of
$60.08 billion in 2016-17. Besides, positive momentum in the domestic equities
and continuous foreign capital inflows too supported the rupee. On the global
front, dollar steadied close to six-month lows against a basket of currencies
on Monday, as investors took stock of a week of political turmoil in the United
States and a resurgent euro zone economy. Finally, the rupee ended at 64.55, 9
paise stronger from its previous close of 64.64 on Friday.
The
FIIs as per Monday's data were net buyers in equity and debt segments both. In
equity segment, the gross buying was of Rs 8772.35 crore against gross selling of
Rs 5599.70 crore, while in the debt segment, the gross purchase was of Rs
1148.66 crore with gross sales of Rs 469.77 crore.
The US markets moved further high
albeit modestly, trading activity remained somewhat subdued with a lack of
major US economic data. The Asian markets have made a mixed start and some of
the indices in the region are trading in red, as investors took a cautious
approach amid the latest reports on the Trump administration and a suspected
terrorist attack in the UK. The Indian markets despite cautiousness and losing
some strength in the latter half managed a positive close in last session,
while the benchmarks snapped the two session losing streak, broader indices
succumbed to pressure. Today, the start is likely to be mildly positive to
flat. Though, there will be some concern with a suspected terrorist attack in
UK where 19 people have been killed. Traders however will be getting some
support with a new survey by the Confederation of Indian Industries (CII) and
Indian Bank's Association (IBA) showing that the outlook towards the financial
condition of the country has taken a positive turn during the first quarter of
the ongoing fiscal. The CII-IBA Financial Conditions Index stood at 56.9 for
first quarter of 2017-18, as compared to 48 during the previous quarter. The
banking stocks may see some recovery, as the Reserve Bank of India (RBI) has
said that the oversight committee set up to decide loan restructuring cases
under the so-called S4A scheme will be expanded by adding new members. RBI has
also said that credit rating agencies will be given greater role in dealing
with large amount of stressed assets in banks. There will be some buzz in the
textile stocks, as the Textiles Minister Smriti Irani has said that the Textile
Ministry will announce an incentive package for the knitwear sector in less
than two months to help the industry cope with the challenging times. There
will be lots of important earnings announcements too, to keep the markets in
action.
Support and Resistance: NSE (Nifty) and BSE
(Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9438.25
|
9411.22
|
9481.97
|
BSE Sensex
|
30570.97
|
30487.84
|
30683.12
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
ITC
|
359.39
|
303.60
|
295.00
|
308.50
|
SBI
|
357.71
|
294.30
|
288.53
|
304.73
|
ICICI Bank
|
135.01
|
303.85
|
300.18
|
309.53
|
Bank of Baroda
|
108.49
|
182.80
|
179.23
|
188.83
|
Hindalco
|
97.00
|
190.25
|
188.13
|
193.38
|
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