Bulls continued to roar on Dalal
Street on Wednesday's trading session, with Sensex and Nifty closing higher by
around half a percent. The start of the day was firm, amid reports that the
Department for Promotion of Industry and Internal Trade (DPIIT) has kick-started
an exercise to relax India's foreign direct investment (FDI) norms. The
department held an inter-ministerial meeting to discuss further opening up in
sectors, especially where 100% FDI is not allowed on the automatic route. The
street got comfort, after Finance Minister Nirmala Sitharaman exhorted India
Inc to expand CSR reach to poor states like Jharkhand, Chattisgarh, Bihar and
North East region. Indices traded with traction during whole day, aided with a
report that the finance ministry & regulators are reviewing the possibility
of scrapping the dividend distribution tax. It is also considering
rationalisation of the long-term capital gains taxation structure by
classifying three asset classes against six at present. However, traders were seen
taking a note of a private report that following the surprise move to cut
corporate taxes last month, speculation is high that a reduction in personal
income taxes is on the cards next in India. With the all-in corporate tax rate
at 25 per cent, it is likely that personal income tax rates, which are at 30
per cent plus levels, will also be lowered, surcharges notwithstanding.
Finally, the BSE Sensex gained 220.03 points or 0.55% to 40,051.87, while the
CNX Nifty was up by 57.25 points or 0.49% to 11,844.10.
The US markets ended higher on
Wednesday as traders reacted positively to the Federal Reserve's monetary
policy decision. The Fed announced its decision to lower interest rates for the
third straight meeting. The Fed announced its widely expected decision to lower
the target range for the federal funds rate by 25 basis points to 1-1/2 to
1-3/4 percent. The quarter point rate cut follows two matching moves at the
Fed's meetings in September and July, which marked the first rate cuts in over a
decade. The Fed's accompanying statement removed a key line indicating the
central bank would continue to act as appropriate to sustain the expansion. The
line was included in each of the Fed's three previous statements and was seen
as pointing toward a near-term rate cut. The Fed said it would continue to
monitor the implications of incoming information for the economic outlook as it
assesses the appropriate path of the target range for the federal funds rate.
Besides, traders largely shrugged off the release of some upbeat US economic
data, including the Commerce Department's first reading on third quarter GDP.
The Commerce Department report showed US economic growth slowed much less than
expected in the third quarter. The report said real gross domestic product
increased by 1.9 percent in the third quarter after climbing by 2.0 percent in
the second quarter. Street had expected GDP growth to slow to 1.7 percent.
Moreover, payroll processor ADP released a separate report showing US private
sector employment increased by 125,000 jobs in October compared to economist
estimates for an increase of about 120,000 jobs. However, the report also
showed private sector job growth in September was downwardly revised to 93,000
from the previously reported addition of 135,000 jobs.
Crude oil futures ended lower on
Wednesday after data showed a notable jump in crude inventories in the US. The
Energy Information Administration (EIA) data showed that crude stockpiles in
the US increased by 5.7 million barrels in the week ended October 25, more than
twice the expected jump. The EIA report also said gasoline inventories dropped
by 3 million barrels in the week ended October 25. Distillates supply dropped
by about 1 million barrels in the week. Besides, the American Petroleum
Institute (API) had released a report that said crude inventories fell by
708,000 barrels last week. Moreover, worries about energy demand outlook amid
the ongoing US-China trade dispute and slowing global economy too contributed
to the drop in oil prices. Benchmark crude oil futures for December lost 48
cents or 0.9 percent to settle at $55.06 a barrel on the New York Mercantile
Exchange. December Brent fell 98 cents or 1.6 percent to settle at $60.61 a
barrel on London's Intercontinental Exchange.
Indian
rupee ended marginally weaker against the US dollar on Wednesday, due to
increased demand of the greenback from the importers and the banks. Traders
failed to take support with reports that the Department for Promotion of
Industry and Internal Trade (DPIIT) has kick-started an exercise to relax
India's foreign direct investment (FDI) norms. The department held an inter-ministerial
meeting to discuss further opening up in sectors, especially where 100% FDI is
not allowed on the automatic route.
However, positive trend in equity market along with dollar losing muscle
against other currencies overseas helped in restricting the slide in the Indian
unit. On the global front, dollar was steady against other major currencies on
Wednesday as investors braced for a rate cut by the US Federal Reserve and an
advance reading of economic growth in the third quarter that could shed light
on the rate outlook. Finally, the rupee ended at 70.90, 6 paise weaker from its
previous close of 70.84 on Tuesday.
The
FIIs as per Wednesday's data were net buyers in both equity and debt segments.
In equity segment, the gross buying was of Rs 8087.86 crore against gross
selling of Rs 6568.26 crore, while in the debt segment, the gross purchase was
of Rs 2976.41 crore with gross sales of Rs 958.78 crore. Besides, in the hybrid
segment, the gross buying was of Rs 14.87 crore against gross selling of Rs
1.10 crore.
The US markets ended in green on
Wednesday as investors cheered the Federal Reserve's third rate cut of the year
and comments from Chairman Jerome Powell that signaled it would be a while
before the central bank hikes rates. Asian markets are trading mostly higher on
Thursday after the US Federal Reserve cut interest rates as expected to keep
the economic expansion on track. Indian markets ended higher on Wednesday amid
speculation the government may rationalize the tax structure for equities by
November-end. Today, the start of the F&O series expiry session is likely
to be optimistic following positive global cues coupled with fall in crude oil
prices. There will be some encouragement with the Economist Intelligence Unit's
report stating that India and China are projected to see accelerated economic
growth in the fourth quarter of this year, bucking trends in the US and the
European Union. It added that the real GDP growth of India in the December-ending
quarter is expected to be the highest among G7 and BRICS nations. In the third
quarter, India's real GDP growth is estimated to be 1% on a quarter-on-quarter
basis and is projected to rise to 2.20% in the fourth quarter. Traders may take
note of report that Commerce and industry minister Piyush Goyal has assured
that startups will never be harassed and that the government is taking steps to
promote them. The minister said the government has come out with clarifications
that startups would not be asked any questions if they are registered with and
recognized by the Department for Promotion of Industry and Internal Trade
(DPIIT). However, there may be some cautiousness with report that the
government is unlikely to moderate personal income tax rates for the rich due
to fiscal stress on account of lower tax realisation amid slowdown in the
economy. There will be some buzz in the power stocks with ICRA's report that
progress on stressed thermal power asset resolution remained slow as only 10%
of affected generation capacity witnessed resolution despite several steps
taken by the government and lenders. Telecom stocks will be in focus as the
Telecom Regulatory Authority of India released the amended broadcasting and
cable services interconnection regulations to ensure a fully-compliant audit
regime. There will be some reaction in sugar stocks with report that the
government's Rs 15,000-crore soft loan programme for sugar mills to set up
ethanol units is moving at a very slow pace as banks have so far disbursed only
about Rs 800 crore. There will be some earnings announcements too to keep the
markets buzzing.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,844.10
|
11,791.05
|
11,890.55
|
BSE Sensex
|
40,051.87
|
39,845.28
|
40,218.29
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
2,562.98
|
56.80
|
55.38
|
58.83
|
Tata Motors
|
907.60
|
171.90
|
167.08
|
176.18
|
SBI
|
514.69
|
289.90
|
282.43
|
294.18
|
Bharti Infratel
|
351.36
|
183.20
|
173.08
|
196.58
|
ITC
|
342.91
|
259.40
|
254.47
|
264.17
|
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