Wednesday turned-out to be a
quiet day of trade for Indian equity benchmarks with frontline gauges ending
almost flat, as traders remained anxious eyeing ongoing result season and ahead
of Federal Reserve meeting outcome tonight. Markets altered between green and
red throughout the session and traded mostly near neutral lines, as traders
remained cautious on report that the eight core industries' output growth
slowed to three-month low of 4.1 per cent in March, largely due to some base
effect and contraction in crude oil production. The latest print was lower than
the revised 5.4 per cent growth in February and 6.1 per cent in January. Also,
the December 2017 print for core eight industries has been revised downwards to
3.8 per cent from 4.2 per cent projected earlier. Traders also remained
cautious with Moody's Investors Service's latest report stating that the
Reserve Bank of India's (RBI) push to banks to recognize problem assets more
accurately will reduce profitability of banks in the near term. It said that
increased provisioning will hurt the banks' profitability, and weaker public
sector banks (PSBs) in particular will continue to report losses in the next
fiscal year (FY19), adding pressure on their capital ratios. However, market
participants got some respite with a report highlighting that the Indian
manufacturing activity expanded further in April, on the back of faster
expansions in output and new orders, signaling a faster improvement in business
conditions across the country's goods-producing sector compared to the previous
March month. The seasonally adjusted Nikkei India Manufacturing Purchasing
Managers' Index (PMI) - a composite single-figure indicator of manufacturing
performance - surged to 51.6 in April from 51.0 in March. Some solace also came
with report stating that the government mopped up over Rs 1 trillion in GST
collection in April, indicating stabilisation of the new indirect tax regime
which was rolled out on July 1 last year. While Goods and Services Tax (GST)
collection in entire 2017-18 stood Rs 7.41 trillion, in March the figure was Rs
892.6 billion. Finally, the BSE Sensex rose 16.06 points or 0.05% to 35,176.42,
while the CNX Nifty was down by 21.30 points or 0.20% to 10718.05.
The US markets closed lower on
Wednesday, as the Federal Reserve acknowledged rising prices and said it now
expects inflation to run near its 2% target over the medium term, in its most
recent policy statement. The Federal Reserve held interest rates steady and
expressed confidence that a recent rise in inflation to near the US central
bank's target would be sustained, leaving it on track to raise borrowing costs
in June. The upgrading of the Fed's inflation outlook represented a milestone
after roughly six years of price gains falling short of its 2 percent goal,
even as key aspects of the economy saw a healthy recovery from the 2007-2009
recession. The Fed's rate-setting committee also downplayed a recent slowdown
in economic and job growth, saying activity had been expanding at a moderate
rate and job gains, on average, had been strong in recent months. On the
economy front, private-sector employment remained strong in April, as employers
added 204,000 jobs, Automatic Data Processing Inc. reported. March's gain was
cut to show 228,000 growth instead of a previously estimated 241,000. This is
the sixth month in a row of job growth above 200,000. Details of ADP's report
showed that small firms added 62,000 jobs in April, medium-sized businesses
added 88,000 and large companies added 54,000. The Dow Jones Industrial Average
lost 174.07 points or 0.72 percent to 23,924.98, the Nasdaq dropped 29.807
points or 0.42 percent to 7,100.90, and the S&P 500 was down by 19.13
points or 0.72 percent to 2,635.67.
Crude oil
futures edged higher on Wednesday after the IMF threatened to expel Venezuela
over lack of transparency with its financials. The IMF said it has issued a
declaration of censure against Venezuela for its failure to implement certain
remedial measures and failure to comply with specific obligations. The IMF said
it called on Venezuela to adopt specific remedial measures and will meet again
within 6 months to consider Venezuela's progress in implementation. Meanwhile,
U.S. crude oil inventories surged by much more than anticipated last week. The
Energy Information Administration said U.S. commercial crude oil inventories
(excluding those in the Strategic Petroleum Reserve) increased by 6.2 million
barrels from the previous week. Benchmark crude oil futures for June delivery
jumped by 68 cents or 1 percent to settle at $ 67.93 a barrel on the New York
Mercantile Exchange. July Brent crude gained 23 cents or 0.30 percent to settle
at $73.36 a barrel on London's Intercontinental Exchange.
Indian
rupee ended unchanged compared to its previous close as investors awaited the
Federal Reserve's upcoming policy statement for clues on the future pace of US
monetary tightening. Traders also remained pessimistic with report that the eight
core industries' output growth slowed to three-month low of 4.1 per cent in
March, largely due to some base effect and contraction in crude oil production.
However, domestic currency got some support from report that India's
manufacturing sector activity improved marginally in April, driven by rise in
new business orders amid favourable demand conditions, amid easing inflationary
pressures. The Nikkei India Manufacturing Purchasing Managers Index (PMI), rose
from 51.0 in March to 51.6 in April, indicating faster improvement in the
health of the country's manufacturing economy than in the prior month. On the
global front, pound inched higher against dollar on Wednesday, following the
news that the UK's construction sector has bounced back. Finally, the rupee
ended unchanged from its previous close of 66.65 on Friday.
The FIIs as per Wednesday's data
were net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 8566.71 crore against gross selling of Rs 9482.40 crore, while
in the debt segment, the gross purchase was of Rs 1485.67 crore with gross
sales of Rs 3318.20 crore. Besides, in the hybrid segment, gross buying was of
Rs 0.32 crore against gross selling of Rs 6.07 crore.
The US markets ended lower on
Wednesday after the Fed's comments about inflation, which signaled that an
interest rate hike is likely in June. All the Asian markets are trading in red
in early deals on Thursday, ahead of anxiously-awaited U.S.-China trade talks.
The talks between US Treasury Secretary Steven Mnuchin and Chinese Vice Premier
Liu He are due to kick off later on Thursday, but a breakthrough deal is viewed
as highly unlikely. Indian markets ended flat on Tuesday on account of
disappointing economic report that showed the pace of growth in eight core
sectors to have slowed to a 3-month low in March. Today, the markets are likely
to make pessimistic start, mirroring mixed cues from global markets after the
U.S. Federal Reserve sprang no surprises with its latest policy statement. Sentiments
will remain dampen on report that India has slipped by three spots to eleventh
position in the FDI Confidence Index 2018 released by American global
management consulting firm AT Kearney. India falls by three spots, reversing
its two-year streak of rising in the rankings. The report also said that India
fell out of the top 10 for the first time since 2015. Traders will get some
support later in the day with report that Economic growth in India is expected
to strengthen to 7.3 percent in financial year 2018-19 on the back of robust
activity from construction, manufacturing, and services sectors. Telecom stocks
will remain in focus after the government unveiled a new draft policy for the
telecom sector branded as National Digital Communications Policy 2018 that
proposes broadband access for all with 50 mbps speed, 5G services and 40 lakh
new jobs in the sector by 2022. 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
|
10,718.05
|
10,677.02
|
10,771.87
|
BSE Sensex
|
35,176.42
|
35,046.84
|
35,331.57
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Axis Bank
|
251.96
|
523.75
|
516.78
|
529.33
|
ITC
|
160.72
|
287.25
|
282.10
|
290.55
|
Tata Motors
|
160.22
|
336.05
|
330.15
|
346.80
|
ICICI Bank
|
142.11
|
276.90
|
273.72
|
281.92
|
Yes Bank
|
130.59
|
354.25
|
349.07
|
362.07
|
Tata Motors has registered an impressive growth of 86% at 53,511 units in April 2018, as against 28,844 units over last year.
M&M is planning to set-up a Mahindra Ag Tech Center in the United States at Virginia Tech Corporate Research Center.
Bharti Airtel has launched a first-of-its-kind carrier digital platform which will enable global carriers to do wholesale voice business with Airtel at the click of a button.
Bajaj Auto has registered a rise of 26% in total sales to 4,15,168 units in April 2018 against 3,29,800 units in April 2017.