Last hour sell-off pulled Indian
equity benchmarks lower on Friday, with both the larger peers, the Sensex and
the Nifty ending the session lower by over 150 and 50 points, respectively. The
markets made a fabulous start of the day, aided by apex exporters' body,
Federation of Indian Export Organisations (FIEO) stating that the tariff war
between the US and China is benefitting India as its exports to the
neighbouring country have increased by about 32 per cent during the
June-November 2018 period to $8.46 billion. Exports to China had stood at $6.37
billion in June-November 2017. Growth in exports to China is beneficial for
India as it has huge trade deficit with the neighbouring country. Adding some
optimism, Vice President M Venkaiah Naidu said that the country's Goods and
Services Tax would usher in long term gains despite initial problems and
claimed that the world would take a cue from the GST experiment. However, key
indices failed to hold the momentum and ended the session in negative terrain,
despite positive cues from global markets. Domestic sentiments got hit after
Global rating agency Moody's said that the government policies to support the
incomes of small enterprises and low-income households ahead of Lok Sabha
elections will make fiscal consolidation harder. It further said that the
fiscal deficit may touch 3.4 per cent of gross domestic product (GDP) for year
ending March 2019, breach the target of 3.3 per cent. Adding some anxiety,
United Nations head Antonio Guterres said that trade tensions impacting the
world economy were essentially a political problem and warned that a fragmented
response to global challenges was a recipe for disaster. The street overlooked
reports that India has emerged as one of the world's most-dynamic economies,
developing at a great pace and keeping at the forefront of technology and
social innovation. Finally, the BSE Sensex lost 169.56 points or 0.47% to
36,025.54, while the CNX Nifty was down by 69.25 points or 0.64% to 10,780.55.
The US markets ended higher on
Friday as investors focused on a broadly positive picture painted by earnings
season so far. Support also came as US
Treasury Secretary Steven Mnuchin reportedly said the US and China are making a
lot of progress in trade talks. Mnuchin is looking forward to a meeting with Chinese
Vice Premier Liu He next week, which will also include discussions on currency
issues. Besides, Stocks remained firmly positive as President Donald Trump
announced an agreement to end the record-setting government shutdown. Trump
revealed in a speech from the White House rose garden that lawmakers will vote
later today on legislation to fund the shuttered parts of the government until
February 15. The bill will not include money for Trump's controversial border
wall, which was the issue that led to the longest government shutdown in US
history. Trump indicated that the three weeks of funding provided by the
legislation will give lawmakers time to negotiate on the contentious issue of
border security. Trump said Many disagree, but I really feel that, working with
Democrats and Republicans, we can make a truly great and secure deal happen for
everyone. With the announcement, Trump seemed to give in to Democratic demands
to re-open the government before negotiating on border security. Though, if an
agreement on border security is not reached by February 15, Trump suggested the
government could shut down again or he could declare the situation on the
border a national emergency. Dow Jones Industrial Average surged 183.96 points
or 0.75 percent to 24737.20, Nasdaq gained 91.40 points or 1.29 percent to
7164.86 and S&P 500 was up by 22.43 points or 0.85 percent to 2664.76.
Crude oil futures ended higher on
Friday supported by supply concerns tied to Venezuela. A dramatic escalation in
tensions has raised fears that the US could impose sanctions on Venezuelan oil,
threatening to complicate the Organization of the Petroleum Exporting
Countries' (OPEC) job of balancing global oil supplies. A defiant Maduro called
home all Venezuelan diplomats from the US and closed its embassy, a day after
ordering all US diplomats out of the country by the weekend. However, gains remain
capped on account of hefty weekly rise in US crude supplies. The Energy
Information Administration (EIA) reported that domestic crude supplies climbed
by 8 million barrels for the week ended January 18, a two-month high. That was
contrary to expectations for a fall of 600,000 barrels. Benchmark crude oil
futures for March gained 56 cents or 1.1 percent to settle $53.69 a barrel on
the New York Mercantile Exchange, while March Brent crude rose 55 cents or 0.9
percent to settle at $61.64 a barrel on London's Intercontinental Exchange.
Erasing
all of the initial gains, Indian rupee ended weaker against dollar on Friday,
due to fresh demand for the American currency from banks and importers. Traders
remained concerned after Global rating agency Moody's said that the government
policies to support the incomes of small enterprises and low-income households
ahead of Lok Sabha elections will make fiscal consolidation harder. It further
said that the fiscal deficit may touch 3.4 per cent of gross domestic product
(GDP) for year ending March 2019, breach the target of 3.3 per cent. However,
losses remained capped with FIEO stating that the tariff war between the US and
China is benefitting India as its exports to the neighboring country have
increased by about 32 per cent during the June-November 2018 period to $8.46
billion. Exports to China had stood at $6.37 billion in June-November 2017.
Growth in exports to China is beneficial for India as it has huge trade deficit
with the neighboring country. On the global front, euro was down in the forex
markets as trading got underway on Friday following a warning from the European
Central Bank. Finally, the rupee ended at 71.17, 10 paise weaker from its previous
close of 71.07 on Thursday.
The FIIs as per Friday's data
were net sellers in equity segment, while they were net buyers in debt segment
In equity segment, the gross buying was of Rs 4032.25 crore against gross
selling of Rs 4226.96 crore, while in the debt segment, the gross purchase was
of Rs 1083.60 crore with gross sales of Rs 533.52 crore. Besides, in the hybrid
segment, the gross buying was of Rs 1.61 crore against no selling.
The US markets ended in green on
Friday, as mostly positive earnings results and a report that the Federal
Reserve will maintain a larger portfolio of Treasury securities helped boost
investor sentiment. Asian markets are trading higher on Monday as Wall Street
rallied after a deal was announced to reopen the US government following a
prolonged shutdown that had shaken investor sentiment. Indian equity markets
wiped out early gains to end notably lower on Friday as weak third quarter
earnings overshadowed positive cues from global markets. Today, the start of
the new week is likely to be marginally in green tacking positive global cues.
Traders will be getting encouragement with the Economic Advisory Council to the
Prime Minister's (EAC-PM) statement that India's economic growth is expected to
remain in the range 7-7.5 per cent in the next few years. The council observed
that the growth rate can be easily increased by 1 per cent by addressing
structural problems through reforms. Some support will also come with Central
Board of Direct Taxes (CBDT) Chairman Sushil Chandra's statement that the
government will exceed the direct tax target of Rs 11.5 trillion in the
financial year 2018-19. Traders may take note of Union Commerce and Industry
Minister Suresh Prabhu stating that new policies of the government will ensure
the doubling of exports, currently pegged at $321 billion, in a few years. He
said the policy focuses on five key elements, namely agriculture, horticulture,
plantation, fisheries and meat. Meanwhile, the Union cabinet is likely to
approve a package for farmers to boost their income and address distress in the
farm sector, the move will come ahead of the general elections. However, there
may be some cautiousness with Moody's Investors Service's statement that the
steps announced by the government to aid MSMEs and the measures being planned
to support farmers will increase the risk of fiscal slippage and push deficit
to 3.4 per cent of GDP in the current financial year. The government budgeted
the fiscal deficit for the current financial year at 3.3 per cent of the gross
domestic product (GDP). Besides, foreign investors have pulled out close to Rs
6,000 crore so far from the Indian stock markets in January and experts believe
this trend will continue in the coming months as well. There will be some buzz
in the banking sector stocks with report that the government has empowered PSU
banks to request lookout circulars (LOCs) against wilful defaulters and
fraudsters. The Home Ministry has also authorised the Serious Fraud Investigation
Office (SFIO), a statutory corporate fraud investigation agency, to request
LOCs if it feels the suspect may escape from India.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,780.55
|
10,714.10
|
10,889.35
|
BSE Sensex
|
36,025.54
|
35,827.63
|
36,348.96
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,834.26
|
219.60
|
210.07
|
237.07
|
ZEEL
|
742.61
|
318.40
|
258.02
|
409.07
|
ICICI Bank
|
229.78
|
357.20
|
352.95
|
363.05
|
Tata Motors
|
121.37
|
173.25
|
170.50
|
177.45
|
Bharti Infratel
|
118.29
|
279.75
|
268.42
|
286.77
|
Eicher Motors' two-wheeler division -- Royal Enfield has signed a MoU with the Government of Tamil Nadu.
Coal India has supplied 389.63 MT of coal to the power sector in the current financial year till up to January 22, 2019, registering a rise of 8% over the previous year.
L&T has reported a rise of 37.02% in its net profit at Rs 2,041.62 crore for Q3FY19 as compared to Rs 1,489.98 crore for Q3FY18.
Maruti Suzuki India has reported a fall of 17.22% in its net profit at Rs 1489.30 crore for Q3FY19 as compared to Rs 1799.00 crore for Q3FY18.