Key Indian equity benchmarks
ended near their intraday low points on Wednesday, with Sensex and Nifty losing
over 300 and 90 points, respectively. The markets made slightly higher opening
of the day, amid reports that the Reserve Bank of India (RBI) has decided to
infuse Rs 10,000 crore on January 24, 2019. This is in line with its continuous
efforts to adhere commitment of providing adequate liquidity. The street got
also comfort in early morning deals with Employment Provident Fund
Organisation's (EPFO) latest Net Payroll Data report showing that India
created 7.32 lakh new jobs in the month of November 2018. The job creation
increased from the revised figure of 666437 in October to 732083 in November.
Some support came with former RBI governor Raghuram Rajan's statement that
India will eventually surpass China in economic size and will be in a better
position to create the infrastructure being promised by the Chinese side in
South Asian countries. However, the key indices soon turned lackluster and
ended the session with notable losses, as trading sentiments got hit after a
private report showed that India's industrial activity is expected to remain
subdued in the near term, owing to muted domestic demand, weak global economic
outlook and uncertainty among businesses over the outcome of Lok Sabha
elections, 2019. Weak opening of European markets also influenced the mood of
Indian equities. The market participants failed to take any senses of relief
with reports that the commerce ministry sought stakeholders' views on a report
submitted by a panel to revive special economic zones (SEZs). Investors also
overlooked NITI Aayog CEO Amitabh Kant's statement that urbanisation will be a
big driver of economic growth in India going forward, supported by favourable
macroeconomic factors, accelerated infrastructure building and continuing
reforms. He also said that the Indian economy may even exceed the IMF growth
forecast of 7.5 per cent for the country. Finally, the BSE Sensex fell 336.17
points or 0.92% to 36,108.47, while the CNX Nifty was down by 91.25 points or
0.84% to 10,831.50.
The US markets ended higher on
Wednesday following a batch of strong earnings reports. Tech giant IBM Corp.
(IBM) posted a standout gain after reporting fourth quarter results that beat
estimates and providing upbeat guidance for 2019. Shares of United Technologies
(UTX) also moved notably higher after the industrial conglomerate reported
fourth quarter results that exceeded Street estimates on both the top and
bottom lines. Consumer products giant Procter & Gamble (PG) also saw
significant strength after reporting better than expected fiscal second quarter
results. However, upside remain capped as traders expressed uncertainty about
the economic impact of the ongoing US government shutdown. A top economic
adviser to President Donald Trump acknowledged the shutdown could lead to a
lack of economic growth in the first quarter. White House Council of Economic
Advisers Chairman Kevin Hassett conceded the US could see zero growth if the
shutdown continues for the whole quarter. He said It is true that if we get a
typically weak first quarter and extended shutdown that we could end up with a
number that is very low, or very close to zero. Though, Hassett predicted
second quarter growth would subsequently be humongous assuming the government
reopened. Dow Jones Industrial Average surged 171.14 points or 0.70 percent to
24575.62, Nasdaq gained 5.41 points or 0.08 percent to 7025.77 and S&P 500
was up by 5.80 points or 0.22 percent to 2638.70.
Crude oil futures settled lower
on Wednesday following a report that the European Union may soon launch a
mechanism that will allow companies to bypass US sanctions, and trade with
Iran. However, losses remain capped as traders looked to the possibility of US
sanctions on Venezuelan oil, which could lead to a tighter market. The Trump
administration told US energy companies it could impose Venezuela oil sanctions
as soon this week if the political situation there deteriorates further. The US
imported about 17.7 million barrels of crude oil and petroleum products from
Venezuela in October 2018. Benchmark crude oil futures for March declined 39
cents or 0.7 percent to settle $52.62 a barrel on the New York Mercantile
Exchange. March Brent crude fell 36 cents or 0.6 percent to settle at $61.14 a
barrel on London's Intercontinental Exchange.
Halting a three-day slide, Indian
rupee ended marginally higher against US dollar on Wednesday, as exporters and
banks stepped up selling of the American currency. Traders took support with
former RBI governor Raghuram Rajan's statement that India will eventually
surpass China in economic size and will be in a better position to create the
infrastructure being promised by the Chinese side in South Asian countries.
Besides, weak US dollar overseas largely supplemented strength to the local currency.
However, further gains were restricted as some concern came with a private
report showed that India's industrial activity is expected to remain subdued in
the near term, owing to muted domestic demand, weak global economic outlook and
uncertainty among businesses over the outcome of Lok Sabha elections, 2019. On
the global front, dollar fell against other currencies overseas on Wednesday on
lingering worries about a global slowdown and continuing US-China trade
tensions. Finally, the rupee ended at 71.33, 11 paise stronger from its
previous close of 71.44 on Tuesday.
The FIIs as per Wednesday's data
were net buyers in equity segment, while they were net sellers in debt segment.
In equity segment, the gross buying was of Rs 5681.87 crore against gross
selling of Rs 5233.62 crore, while in the debt segment, the gross purchase was
of Rs 1163.98 crore with gross sales of Rs 1264.83 crore. Besides, in the
hybrid segment, the gross buying was of Rs 0.87 crore against gross selling of
Rs 0.56 crore.
The US markets ended higher on
Wednesday on the back of strong quarterly earnings from companies like IBM,
United Technologies and Procter & Gamble. Asian markets were trading mostly
in green in early deals on Thursday following gains on Wall Street, but gains were
capped by political uncertainty in the US and worries about weakening global
economic growth. Late hour sell off dragged the Indian markets lower to end
Wednesday's trading session near intra-day low levels, mirroring weak global
cues as investors stayed away from risky assets amid signs of slowing global
growth and an unsettled Sino-US trade dispute. Today, the start of the session
is likely to be in green following positive leads from global markets. Traders
will be getting encouragement with Crisil Ratings' report showing that India's
growth rate is likely to inch up to 7.3 percent in 2019-20, provided that there
are normal rains and a stable political outcome of the general elections. It
added that India is expected to clock a growth rate of 7.2 percent in the
current financial year, up from 6.7 percent in 2017-18. Also, there will be
some support with the United Nations' World Economic Situation and Prospects
(WESP) 2019 report stating that India's economy is expected to grow at 7.4 per
cent during 2018-19 and improve to 7.6 per cent in the next fiscal. It added
that growth continues to be underpinned by robust private consumption, a more
expansionary fiscal stance and benefits from previous reforms. Traders may take
note of a report that Fund inflow into the Indian capital market through
participatory notes (P-notes) climbed to Rs 79,513 crore till the end of
December 2018 in the current financial year, amid SEBI relaxing norms for
clubbing of investment limits by FPIs. Meanwhile, markets regulator SEBI has
asked stock exchanges to follow the policy of having uniform trading and
delivery lot size for commodity derivatives contracts. Currently, exchanges
keep different trading lot size and delivery lot size of some commodity
derivatives contracts which, at times, put participants in disadvantageous
positions. Besides, in order to attract big foreign players in the single-brand
retail sector, the government is considering measures to relax the mandatory 30
per cent local sourcing norms by allowing them more time to comply with the
regulations. There will be some reaction in agriculture sector stocks with the
government think tank Niti Aayog's statement that doubling Farmers Income by
2022 cannot be achieved if they are not able to bring reforms in Agriculture
sector. He also asserted that the problems in the agriculture credit system
should also be addressed. Also, there will be some buzz in the insurance sector
stocks on report that insurance regulator Irdai set up a panel to identity
domestically systemically important insurers (SII) and put in place an enhanced
regulatory framework for them. 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
|
10,831.50
|
10,780.70
|
10,913.55
|
BSE Sensex
|
36,108.47
|
35,923.76
|
36,407.33
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
463.94
|
197.25
|
194.10
|
199.95
|
ITC
|
401.88
|
277.30
|
270.07
|
289.47
|
Sun Pharma
|
269.21
|
431.00
|
416.97
|
439.72
|
ZEEL
|
129.87
|
432.85
|
424.50
|
440.50
|
SBI
|
103.05
|
286.65
|
283.78
|
291.23
|
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