Indian equity benchmarks ended in
red on Monday, with the both the larger peers closing trading session in deep
red. The start of the day was positive, as the Goods and Services Tax (GST)
Council, at its 31st meeting decided to lower tax rates on 23 goods and
services, including movie tickets, TV and monitor screens and power banks, and
exempted frozen and preserved vegetables from the levy. The new rates would
come into effect from January 1, 2019. Sentiments were positive in early
morning deals, with Finance minister Arun Jaitley expressing that the
government is confident of meeting the fiscal deficit target of 3.3% of GDP for
the current financial year (FY19) despite revenue loss on account of reduction
in Goods and Services Tax (GST) rates. Traders also took note of Niti Aayog CEO
Amitabh Kant's statement that the government needs to incentivise angel
investors eyeing startups and not tax them to give a boost to Prime Minister
Narendra Modi's flagship Startup India initiative. But, the markets soon turned
volatile, after Finance Commission Chairman N.K. Singh has sounded a note of
caution against fiscal slippage, saying it would adversely impact the country's
macroeconomic stability as well as investment climate. He expressed
apprehension that some states are not according priority to fiscal discipline,
which was not the case earlier. In the last leg of the trade, key indices
extended losses to end the session near day's low point, impacted by Reserve
Bank of India's (RBI) data report showing the country's foreign exchange
reserves declined by $613.9 million to $393.12 billion in the week to December
14, due to fall in foreign currency assets. In the reporting week, foreign
currency assets, a major component of the overall reserves, dropped by $631.6
million to $367.86 billion. Adding some more concerns, the Directorate General
of GST Intelligence (DGGI) has busted a racket of fraudulent companies engaged
in raising fake tax invoices worth Rs 220 crore to avail input-tax credit.
Domestic sentiments also got cautious with Sebi Chairman Ajay Tyagi's statement
that the capital markets, globally, have been quite volatile during the current
year and are likely to remain so in coming times on account of various factors
such as US Fed rate hikes, volatile oil prices, intensifying trade conflicts
and sanctions. Besides, some concerns came with reports that Reserve Bank of
India has cancelled the registration of 1,490 non-banking financial companies
(NBFCs). These included NBFCs that failed to meet prudential norms and those
that voluntarily surrendered registration. Finally, the BSE Sensex plunged by
271.92 points or 0.76% to 35,470.15, while the CNX Nifty was down by 90.50
points or 0.84% to 10,663.50.
The US markets remained closed on
Tuesday on account of Christmas Day holiday.
Indian
rupee trimmed most of its early gains but somehow managed to end higher against
the American currency on Monday, amid sustained selling of the American currency
by exporters and banks. Sentiments remained positive with Finance minister Arun
Jaitley expressing confidence of meeting the fiscal deficit target of 3.3% of
GDP for the current financial year (FY19) despite revenue loss on account of
reduction in GST rates. Besides, a weak dollar against some currencies overseas
also supported the gain in rupee. However, gains were capped as anxiety spread
among the traders with Reserve Bank of India's (RBI) data report showing the
country's foreign exchange reserves declined by $613.9 million to $393.12
billion in the week to December 14, due to fall in foreign currency assets. In
the reporting week, foreign currency assets, a major component of the overall
reserves, dropped by $631.6 million to $367.86 billion. On the global front, euro and Japanese yen
gained on Monday as concerns about a partial US government shutdown weighed on
investor sentiment and the dollar, although Chinese plans to cut tariffs on a
range of goods helped to lift the mood. Finally, the rupee ended at 70.14, 4
paise stronger from its previous close of 70.18 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 6483.30 crore against gross selling of Rs 6476.04 crore, while
in the debt segment, the gross purchase was of Rs 1859.49 crore with gross
sales of Rs 1181.13 crore. Besides, in the hybrid segment, the gross gross
selling was of Rs 1.60 crore against no buying.
The US markets remained closed on
Tuesday on account of Christmas Day holiday. Asian markets were trading mostly
in red in early deals on Wednesday following the losses on Wall Street on
Christmas eve in the face of a series of unnerving US political developments,
including a US federal government shutdown and President Donald Trump's increasingly
hostile stance toward the Federal Reserve chairman. Indian markets ended lower
on Monday on nervousness as political uncertainty in the US and concern over
slowing global growth. Today, the markets are likely to make cautious start
mirroring weakness in Asian counterparts. There will be some cautiousness with
former chief economic advisor Kaushik Basu's statement that distress in some
sectors of the economy has slowed India's GDP growth, the consequences of which
could be far reaching. Basu said distress has been very much visible in the
agriculture sector as the condition of farmers is bad. Traders will also be
concerned about a private report that as India near 2019 general elections,
populist steps by the government may exert pressure on India's fiscal scenario.
It expected the general government debt at 70.1% of the GDP in FY19. Traders
may take note of a report that despite a global trade war, India managed to
grow its exports in 2018 but high crude prices and rising domestic demand
continued to inflate the trade deficit at a faster rate. The year started with
monthly trade deficit soaring to a 56-month high. By October, it had risen to
more than $153 billion. However, traders may take some support later in the day
with a couple of days after cuts in the goods and services tax (GST) rates,
Finance Minister and GST Council Chairman Arun Jaitley raised hopes of further
pruning the peak rate (28%) and merging the 12% and 18% slabs. He further said
the single standard rate would take some time after GST revenues see a
significant rise. There will be some buzz in the motor insurance industry
related stocks with report that the reduction in GST rate for third-party motor
insurance of commercial vehicles to 12% from 18% may improve renewal rates for
the segment. Also, there will be some reaction power sector stocks with report
that fresh capacity addition in thermal and hydro power plunged 69% in the
April-November period of this fiscal, as green energy gained momentum.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,663.50
|
10,614.40
|
10,747.45
|
BSE Sensex
|
35,470.15
|
35,292.04
|
35,779.47
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
328.62
|
182.30
|
180.53
|
184.78
|
IOC
|
148.78
|
135.05
|
132.60
|
139.20
|
SBI
|
120.49
|
293.05
|
290.47
|
295.32
|
Tata Motors
|
113.74
|
172.50
|
170.05
|
176.40
|
Vedanta
|
99.51
|
196.40
|
195.10
|
198.60
|
Reliance Industries has acquired 5.56% equity stake in Vakt Holdings, UK, a closely held start up entity engaged in the technology space, for cash aggregating to $5 million.
Maruti Suzuki India is looking for a land parcel of around 700 acres in Haryana for shifting its Gurgaon plant.
Dr. Reddy's Laboratories has launched Aspirin and Extended-Release Dipyridamole Capsules in the US market.
Tata Steel has inaugurated the state-of-the-art Rain Water Harvesting Project Phase-II at Joda on December 20, 2018.