NSE Intra-day chart (01 February 2019) | | | Top Gainers | | | Top Losers | | | World Indices | | | Indices | | | FII Activity(Rs. Cr) | | |
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Market Commentary | | 04 February 2019 | |
Markets to make pessimistic start on Monday
Indian equity benchmarks lauded
the Interim Budget 2019 on Friday, with Sensex and Nifty closing the trading
session with the gains of over half a per cent each. The start of the day was
positive, as the government revised India's gross domestic product (GDP) growth
rate upwards by 50 basis points to 7.2 per cent from 6.7 per cent for fiscal
2017-18 and by 110 basis points to 8.2 per cent from 7.1 per cent for 2016-17.
Adding enthusiasm among the market participants, the Finance Ministry said that
revenue collection from Goods and Services Tax (GST) in the month of January
2019 surpassed Rs 1 lakh crore-mark, after a gap of 2 months. It noted that
this has been a significant improvement over collection of Rs 94,725 crore
during December 2018 and Rs 89,825 crore during the same month last year.
Sentiments remained upbeat, aided by rising manufacturing PMI data. The Indian
manufacturing sector surged in the month of January, with the quickest increase
in order books. As per the survey report, the Nikkei India Manufacturing
Purchasing Managers' Index (PMI) - a composite single-figure indicator of
manufacturing performance - rose to 53.9 in January from 53.2 in December. The
manufacturing sector activity expanded for the 18th consecutive month as the
PMI reading stood above the watershed 50 mark, which differentiates growth from
contraction. The markets extended their gains in noon deals, as Finance
Minister Piyush Goyal started presenting the budget in the Parliament. Goyal
said that India has emerged as the brightest spot in the world in the last five
years during which the country witnessed the fastest GDP growth higher than
under any previous governments. Separately, the Finance Minister proposed higher
allocation for MNREGA by 9 percent to Rs 60,000 crore for the financial year
2019-20, as a part of the NDA government's larger plan to focus specifically on
the country's rural sector, amid concerns over rising agrarian crisis. However,
in the last leg of the trade, the key indices pared some their gains, amid
reports that the growth of eight core infrastructure industries slowed down to
2.6 percent in December 2018, on account of negative growth in expansion of
crude oil, refinery products and fertilisers. According to data released by the
ministry of Commerce and Industry, the combined Index of eight core industries
stood at 132.1 in December, 2018. Finally, the BSE Sensex gained 212.74 points
or 0.59% to 36,469.43, while the CNX Nifty was up by 62.70 points or 0.58% to
10,893.65.
The US markets ended Friday's
choppy trading session mostly in green, as an unexpectedly strong January jobs
report overshadow the sting of a weak outlook from e-commerce giant Amazon.com
Inc. The Labor Department showed much stronger than expected job growth in the
month of January but also an uptick in the unemployment rate. The Labor
Department said non-farm payroll employment surged up by 304,000 jobs in
January compared to street estimates for an increase of about 165,000 jobs.
However, the report also showed the spike in employment in the previous month
was downwardly revised to 222,000 jobs from the initially reported 312,000
jobs. Meanwhile, Amazon reported fourth quarter results that exceeded street
estimates but forecast weaker than expected first quarter revenues. Besides, a
separate report from the Institute for Supply Management (ISM) showed growth in
the manufacturing sector unexpectedly reaccelerated in January after seeing a
substantial slowdown in December. The ISM said its Purchasing Managers' Index
(PMI) climbed to 56.6 in January from a revised 54.3 in December, with a
reading above 50 indicating growth in the manufacturing sector. Street had
expected the manufacturing index to edge down to 54.0 from 54.1 originally
reported for the previous month. Dow Jones Industrial Average jumped 64.22
points or 0.26 percent to 25063.89 and S&P 500 gained 2.43 points or 0.09
percent to 2706.53, while Nasdaq was down by 17.87 points or 0.25 percent to
7263.87.
Crude oil futures ended
significantly higher on Friday as US sanctions on Venezuela's oil exports and
reports of notable drop in The Organization of the Petroleum Exporting
Countries' (OPEC) oil output eased concerns about any excess supply in the
market. As per the report, OPEC's crude oil production dropped by as much as
890,000 barrels per day in January, from the previous month. That was the
largest month-on-month decline since January 2017. Besides, a report from
energy services firm Baker Hughes said drillers cut 15 oil rigs in the week to
February 1, bringing the total count down to 847, the lowest since May 2018.
Benchmark crude oil futures for March gained $1.47 or 2.7 percent to settle
$55.26 a barrel on the New York Mercantile Exchange, while April Brent crude
surged $1.91 or 3.1 percent to settle at $62.75 a barrel on London's
Intercontinental Exchange.
Indian
rupee ended weaker against the US dollar on Friday, on the back of consistent
demand for the greenback from state-run banks and importers. Traders remained
cautious as the government overshot the fiscal deficit target for the current
financial year and announced some populist measures, which will increase fiscal
burden on the exchequer. Some concern also came with reports that the growth of
eight core infrastructure industries slowed down to 2.6 percent in December
2018, on account of negative growth in expansion of crude oil, refinery
products and fertilisers. On the global front, Sterling briefly dived below a
key market level on Friday after weak survey data highlighted the degree of
uncertainty sweeping across British factories as the country heads towards
Brexit in less than two months. Finally, the rupee ended at 71.25, 17 paise
weaker from its previous close of 71.08 on Thursday.
The FIIs as per Friday's data
were net buyers in equity segment, while they were net sellers in debt segment
In equity segment, the gross buying was of Rs 10924.60 crore against gross
selling of Rs 8168.97 crore, while in the debt segment, the gross purchase was
of Rs 551.51 crore with gross sales of Rs 648.26 crore. Besides, in the hybrid
segment, the gross buying was of Rs 0.20 crore against gross selling of Rs
0.20.
The US markets ended mostly
higher on Friday after the US created more jobs than expected in January. Asian
markets were trading mostly in green on Monday following strong US economic
data and positive comments out of Washington on the trade talks. Indian markets
ended higher for second straight session on Friday as investors cheered major
announcements in the interim budget presented in Parliament. Today, the start
of the new week is likely to be slightly in red, as investors will be looking
ahead to the first Reserve Bank of India (RBI) policy meeting under the new
governor later in the week. There will be some cautiousness with Moody's Investors
Service's statement that the government will find it difficult to meet the
fiscal deficit target of 3.4% in 2019-20 on account of higher spending and low
revenue growth. Observing that Indian government's debt is stubbornly high as a
percentage of GDP, Moody's said it could be brought down only if the Centre
sticks to the fiscal consolidation path. Traders will be concerned about a
report that Foreign Portfolio Investors (FPIs) withdrew over Rs 5,300 crore
from the Indian capital markets in January, indicating their wait and watch
approach ahead of the general election. Also, traders will be reacting to
report that the government has reduced the allocation for Startup India
programme in the Budget 2019-20 but added more monies to the Make in India kitty.
According to the budget documents, the allocation for Startup India programme
has been slashed to Rs 25 crore for 2019-20 from the revised estimate of Rs 28
crore in 2018-19. Meanwhile, Fitch Ratings said pre-election spending has led
to fiscal slippage by a modest margin but the sovereign rating profile of India
would be evaluated based on the medium term outlook in the post-election
Budget. However, traders may get some support later in the day with the finance
ministry's statement that GST collections in January rose to Rs 1.02 lakh crore
- the second highest monthly mop-up after April. The total number of sales
return or GSTR-3B filed for the month of December up to January 31, 2019 is
73.3 lakh. Traders may also take note of Federation of Indian Export
Organisations' (FIEO) saying that the new logistics portal and upcoming
national policy would help boost the country's export growth. There will be
buzz in the oil industry stocks with report that state-owned oil firms' capital
expenditure has hit a four-year low with PSUs such as ONGC and IOC planning to
invest Rs 93,693 crore in oil and gas exploration, refining and petrochemicals
in the 2019-20 fiscal year. There will be some reaction in the stocks related
to construction equipment sector with report that the growth of construction
equipment sector has hit a bumper after liquidity crisis gripped NBFCs
following the IL&FS default. As per the report, the construction equipment
sector was growing around 20% prior to the IL&FS crisis. The growth has now
slowed down to 10%.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,893.65
|
10,810.25
|
10,980.25
|
BSE Sensex
|
36,469.43
|
36,201.12
|
36,757.94
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Vedanta
|
985.62
|
162.15
|
153.53
|
175.38
|
Yes Bank
|
665.98
|
185.60
|
178.83
|
194.78
|
SBI
|
600.16
|
284.40
|
276.70
|
297.40
|
ICICI Bank
|
256.05
|
354.65
|
347.30
|
363.45
|
ZEEL
|
245.41
|
354.40
|
335.38
|
386.63
|
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