A sea of red took over Dalal
Street on Thursday, as bears tighten their grip amid selloff in majority of
sectors along with weak cues from global markets. Both the larger peers ended
lower with the losses of more than 1.50%. After a sluggish start, the markets
remained under pressure throughout the day, as Fitch Ratings revised downwards
India's GDP growth forecast to 7.2% for current fiscal citing higher financing
cost and reduced credit availability. In its Global Economic Outlook, Fitch
also projected that for 2019-20 and 2020-21 financial years, India's GDP growth
will be 7% and 7.1% respectively. The rating agency has also forecasted Indian
rupee to weaken to 75 to a dollar by end of 2019. Adding more anxiety among the
traders, Fitch Solutions said that the slow pace of land reforms will continue
to result in project delays and rising costs, posing a downside risk for the
road and rail sectors. Some concerns also came with a private report stating
that officers of the indirect tax department have started issuing preliminary
notices to captive units of multinationals and Indian companies exporting
offshore support services. The street paid no heed towards Finance Minister
Arun Jaitley's statement that India, among the world's fastest growing emerging
economies, is likely to maintain the high growth rate of 7-8% over the next
decade. He emphasized that landmark reforms such as the Insolvency and
Bankruptcy Code offer an attractive and conducive environment to foreign
investors to the country. The markets participants also overlooked the finance
ministry's statement that the assessment of growth and inflation made by the
Reserve bank of India's (RBI) Monetary Policy Committee (MPC) is in line with
government's reading. Traders took note
of RBI governor Urjit Patel's statement that if the upside risks to inflation
do not materialise, the bank may change its monetary policy accordingly,
raising prospects of rate cuts. Meanwhile, Economic Affairs Secretary Subhash
Chandra Garg said the calibrated tightening stance of RBI's MPC probably needed
a rethink even as he welcomed the decision on policy rate. Finally, the BSE
Sensex plunged 572.28 points or 1.59% to 35,312.13, while the CNX Nifty was
down by 181.75 points or 1.69% to 10,601.15.
The US markets ended mostly lower
on Thursday after a dramatic session that saw the Dow Jones Industrial Average
drop more than 700 points at one point on fears that the arrest of a Huawei
executive would reignite trade worries. Huawei CFO Meng Wanzhou was arrested in
Canada on suspicion of violating US trade sanctions against Iran and faces
possible extradition to the US. Further,
some cautiousness also prevailed in the markets after a report released by the
Commerce Department showed a steep drop in new orders for US manufactured goods
in the month of October. The Commerce Department said factory orders tumbled by
2.1% in October after rising by a downwardly revised 0.2% in September. However,
the markets clawed back most of its losses on a report that the Federal Reserve
may turn more accommodative. Federal Reserve officials are considering
signaling a wait-and-see mentality after a likely interest rate hike later this
month. According to a report released by the Institute for Supply Management,
growth in US service sector activity unexpectedly accelerated in the month of
November. The ISM said its non-manufacturing index crept up to 60.7 in November
after pulling back to 60.3 in October, with a reading above 50 indicating
service sector growth. Meanwhile, revised data released by the Labor Department
showed labor productivity in the US increased by slightly more than initially
estimated in the third quarter. The report also said unit labor costs rebounded
by less than previously estimated. The report said productivity surged up by
2.3% in the third quarter compared to the previously reported 2.2% spike. The
upward revision to the pace of productivity growth matched street estimates.
Dow Jones Industrial Average declined 79.40 points or 0.32 percent to 24947.67
and S&P 500 lost 4.11points or 0.15 percent to 2695.95, while Nasdaq was up
by 29.83 points or 0.42 percent to 7188.26.
Crude oil futures extended their
previous session losses and ended with cut of over two percent on Thursday
after the Organisation of the Petroleum Exporting Countries (OPEC) failed to
offer details on its expected production cut, opting to wait until after it
meets with other producers Friday. Growing concerns that oil producers will not
reach an agreement to aggressively reduce output has also weighed on
price. However, the Energy Information
Administration (EIA) said US crude supplies fell by 7.3 million barrels for the
week ended November 30. That marked the EIA's first reported weekly supply
decline in 11 weeks. Benchmark crude oil futures for January plunged $1.40 or
2.7 percent to settle $51.49 a barrel on the New York Mercantile Exchange.
February Brent crude declined $1.50 or 2.4 percent to settle at $60.06 a barrel
on London's Intercontinental Exchange.
Indian rupee ended lower against
US dollar on Thursday amid strengthening of American currency and weakness in
domestic equity markets. Traders got anxious with Fitch Ratings revising
downwards India's GDP growth forecast to 7.2% for current fiscal citing higher
financing cost and reduced credit availability. In its Global Economic Outlook,
Fitch projected that for 2019-20 and 2020-21 financial years, India's GDP
growth will be 7% and 7.1% respectively. The rating agency has also forecasted
Indian rupee to weaken to 75 to a dollar by end of 2019. Traders failed to get
any sense of relief with Finance Minister Arun Jaitley's statement that India,
among the world's fastest growing emerging economies, is likely to maintain the
high growth rate of 7-8% over the next decade. He emphasized that landmark
reforms such as the Insolvency and Bankruptcy Code offer an attractive and
conducive environment to foreign investors to the country. Finally, the rupee
ended at 70.90, 44 paise weaker from its previous close of 70.46 on Wednesday.
The FIIs as per Thursday'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 5065.84 crore against gross
selling of Rs 5426.67 crore, while in the debt segment, the gross purchase was
of Rs 1589.77 crore with gross sales of Rs 452.32 crore. Besides, in the hybrid
segment, the gross buying was of Rs 0.03 crore against no selling.
The US markets ended mostly lower
on Thursday on fears that the arrest of a Huawei executive would reignite trade
worries. But, managed to pare early losses after a report indicating Federal
Reserve is considering signaling a wait-and-see mentality after a likely
interest rate hike later this month. Asian markets were trading in green in
early trade on Friday as investors grappled with shifting indications on
US-China trade talks and prospects for a pause in Federal Reserve tightening.
Indian equity markets extended their losses for third straight session on
Thursday, amid weakness in other Asian markets coupled with depreciation in
rupee. Investors also remained cautious ahead of the outcome of key assembly
elections. Today, the markets are likely to make optimistic start, tracking
positive trend in Asian peers after the speculation that the Federal Reserve
might be one-and-done with US rate hikes. Also, traders will be looking ahead
of five states elections exit poll due on December 07 evening and result on
December 11. Traders will be getting some encouragement with the Union Cabinet
approving an agriculture export policy with an aim to double the shipments to
$60 billion by 2022. The policy would focus on all aspects of agricultural
exports including modernising infrastructure, standardisation of products,
streamlining regulations, curtailing knee-jerk decisions, and focusing on
research and development activities. Traders also will be getting some support
with the Reserve Bank of India's (RBI) deputy governor Viral Acharya's
statement that the RBI will continue to inject liquidity into the banking
system through open market operation (OMO) purchases till the end of this
fiscal. In the current financial year, the central bank has conducted OMO
purchases to the tune of Rs 1.36 trillion, with over Rs 1 trillion of the
infusion in the last three months. Meanwhile, a private report indicated that
the investment of $100 billion in the Indian telecom industry as envisioned in
the National Digital Communications Policy 2018 (NDCP) would result in an
increase of $1.21 trillion in India's Gross Domestic Product (GDP) on a
cumulative basis. There will be some buzz in the textile sector stocks with
report that India's annual cotton output could drop 12% to the lowest in nine
years as limited rainfall in the top two producing states has slashed crop
yields, potentially cutting exports from the world's top producer. Also, there
will be some reaction in telecom sector stocks with Trai Secretary S K Gupta's
statement that the telecom sector will move to 5G by 2022 and access to digital
platform will become highly advanced in the next five years.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,601.15
|
10,552.05
|
10,686.45
|
BSE Sensex
|
35,312.13
|
35,150.18
|
35,590.65
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Sun Pharma
|
560.87
|
420.15
|
411.60
|
430.10
|
Yes Bank
|
388.68
|
168.45
|
166.37
|
171.52
|
ICICI Bank
|
177.85
|
347.65
|
344.02
|
350.62
|
Vedanta
|
156.94
|
195.35
|
191.93
|
197.83
|
Tata Motors
|
154.28
|
162.65
|
159.93
|
167.03
|
ICICI Bank is planning to raise funds through issuance of bonds on private placement basis.
Power Grid Corporation of India has been declared as the successful bidder under Tariff based competitive bidding.
Tata Motors' wholly owned subsidiary -- Jaguar Land Rover has achieved a five-star Euro NCAP safety rating for its electric model Jaguar I-PACE.
Wipro's digital business unit -- Wipro Digital and Alfresco have expanded global partnership to create, build and run open source based digital transformation programs.