In a volatile trade, key Indian
bourses, Sensex and Nifty settled at record closing high points for third
straight session on Tuesday. After a positive start, the markets traded
volatile throughout the session, impacted with the Federation of Indian
Chambers of Commerce & Industry's (FICCI) statement that India's slowing
economic growth is of serious concern and the country needs to urgently cut tax
and interest rates to revive the economy. FICCI made a strong case for fiscal
stimulus to pump-prime the slowing economy amid global headwinds and weakening
domestic demand in the next budget as the Narendra Modi government is all set
to begin its second innings. Traders also remained worried with India Ratings
and Research's (Ind-Ra) latest report stating that India's gross domestic
product (GDP) is likely to grow at 6.9 percent in the fiscal 2018-19 (FY19),
slightly lower than Central Statistics Office's (CSO) advance estimate of 7
percent. However, in the last leg of the trade, key indices managed to stage
recovery and ended the trading session in green terrain, amid reports that the
commerce and industry ministry is considering a major export promotion scheme
to ensure expeditious refund of all un-rebated central and state levies and
taxes imposed on inputs that are consumed in exports of all sectors. Adding
optimism among the market participants, eminent economist Arvind Panagariya
said that the new government can start by cutting corporate tax to 25 percent
and removing exemptions. Meanwhile, Industry body Confederation of Indian
Industry (CII) has called for lowering corporate tax rate, kick-starting
government expenditure and rationalization of dispute tax resolution mechanism.
Finally, the BSE Sensex gained 66.44 points or 0.17% to 39,749.73, while the
CNX Nifty was up by 4.00 points or 0.03% to 11,928.75.
The US markets ended lower on
Tuesday on account of lingering concerns about the economic impact of the
ongoing trade dispute between the US and China. President Donald Trump warned
that US tariffs on Chinese goods could go up very, very substantially, very
easily. Trump also said the US is not ready to make a deal and suggested China
probably wishes they made the deal that they had on the table before they tried
to renegotiate it. The trade war worries contributed to a slump in treasury
yields, which in turn added to concerns about a potential recession. The yield
on the benchmark ten-year note dropped to its lowest levels since September of
2017. However, during a trip to Japan over the weekend, President Donald Trump
expressed optimism the US and China will eventually reach a trade agreement. On
the economic front, a report released by the Conference Board showed another
substantial improvement in US consumer confidence in the month of May. The
Conference Board said its consumer confidence index surged up to 134.1 in May
after jumping to 129.2 in April. Street had expected the index to inch up to
129.8. The bigger than expected spike by the headline index was partly due to a
sharp increase by the present situation index, which shot up 175.2 in May from
169.0 in April. The jump by the present situation index was primarily driven by
employment gains, as consumers saying jobs are plentiful inched up to 47.2
percent from 46.5 percent and those claiming jobs are hard to get dropped to
10.9 percent from 13.3 percent. Dow Jones Industrial Average declined 237.92
points or 0.93 percent to 25347.77, Nasdaq dropped 29.66 points or 0.39 percent
to 7607.35 and S&P 500 was down by 23.67 points or 0.84 percent to 2802.39.
Crude oil futures ended higher on
Tuesday but, Brent crude prices finished flat. Oil exports have fallen in Iran
because of the US sanctions while outages in Venezuela, and elsewhere, have
further reduced supply. However, oil shipments from Russia are recovering after
contamination affected Druzhba pipeline. This should ease supply concerns
slightly, potentially leading to weakness in prices -everything else being
equal. Weekly data on US petroleum supplies are delayed this week due to
Monday's holiday. The American Petroleum Institute will release its figures
late Wednesday, while the Energy Information Administration's report is due on
Thursday. Benchmark crude oil futures for July rose 51 cents or 0.9 percent to
settle at $59.14 a barrel on the New York Mercantile Exchange. July Brent crude
settled unchanged at $70.11 a barrel on London's Intercontinental Exchange.
Indian rupee ended weaker against the US dollar on Tuesday,
on the back of consistent demand for the greenback from state-run banks and
importers. Traders remained concerned with the Federation of Indian Chambers of
Commerce & Industry's (FICCI) statement that the India's slowing economic
growth is of serious concern and the country needs to urgently cut tax and
interest rates to revive the economy. Some cautions also prevailed in the markets
ahead of GDP number that will be released later this week. A rebound in the
dollar from multi-week lows too put pressure on the rupee in the forex market.
On the global front, dollar rose against its major peers on Tuesday as
investors awaited new trading catalysts after the European Union parliamentary
elections showed a polarisation of the 28-member block. Finally, the rupee
ended at 69.69, 18 paise weaker from its previous close of 69.51 on Monday.
The FIIs as per Tuesday's data
were net buyers in equity and debt segments both. In equity segment, the gross
buying was of Rs 6414.77 crore against gross selling of Rs 3480.95 crore, while
in the debt segment, the gross purchase was of Rs 2813.93 crore with gross
sales of Rs 1726.79 crore. Besides, in the hybrid segment, the gross buying was
of Rs 15.19 crore against gross selling of Rs 2.75 crore.
The US markets ended lower on
Tuesday amid lingering concerns about the economic impact of the ongoing trade
dispute between the US and China. Asian markets are trading mostly in red on
Wednesday as investors remained cautious, awaiting new developments between
Beijing and Washington amid the ongoing trade tensions. Indian markets ended
higher with marginal gains to settle at record closing highs for third straight
session on Tuesday, amid expectations that a stable government at the Centre
will boost growth and lead to higher foreign fund inflows. Today, the markets
are likely to make a cautious start tracking weak global cues. Traders will be
concerned about the Department for Promotion of Industry and Internal Trade's
(DPIIT) latest data showing that foreign direct investment (FDI) in India
declined for the first time in the last six years in 2018-19, falling by 1 per
cent to $44.37 billion as compared to $44.85 billion in 2017-18. According to
the data, FDI inflows in telecommunication, construction development,
pharmaceuticals and power sectors declined significantly in 2018-19. Decline in
foreign inflows could put pressure on the country's balance of payments and may
also impact the value of the rupee. However, some respite may come later in the
day with a global study showing that India has moved up one place to rank as
the world's 43rd most competitive economy on the back of its robust economic
growth, a large labour force and its huge market size, while Singapore has
toppled the US to grab the top position. Traders may take note of a private
report indicating that India can attract FDI to a ratio of 1.5 per cent to 2
per cent of its GDP by further improving on ease of doing business and building
infrastructure. There will be some buzz in the steel industry stocks with a
report that amid concerns about sluggish steel demand and dumping threat from
China, domestic steel may register a growth of 6-8 per cent in the current
financial year. There will be some reaction in power sector stocks with report
that power production in India is expected to grow by five to six per cent
during FY 2019-20, riding on improved demand from newly connected households.
Also, there will be some buzz in the oil marketing companies (OMCs) stocks with
report that thinner spreads and rising under-recoveries are expected to shave
the operating profit margins of OMCs by 1.5-1.7 per cent this fiscal, even as
crude prices remain elevated and volatile. There will be lots of earnings
reaction based on the performance of the companies.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,928.75
|
11,876.25
|
11,969.90
|
BSE Sensex
|
39,749.73
|
39,556.04
|
39,886.04
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
816.70
|
152.80
|
149.03
|
155.73
|
Vedanta
|
573.85
|
169.55
|
166.30
|
172.25
|
Wipro
|
441.37
|
282.95
|
279.82
|
285.92
|
ZEEL
|
367.24
|
381.80
|
361.13
|
393.63
|
Infosys
|
238.60
|
728.10
|
714.12
|
737.77
|
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