The Reserve Bank of India's (RBI)
the policy repo rate failed to enthuse Indian equity benchmarks on Thursday, as
both the larger peers, Sensex and Nifty, settled the day almost flat. RBI in
its sixth bi-monthly monetary policy review of 2018-19, has reduced the policy
repo rate under the liquidity adjustment facility (LAF) by 25 basis points from
6.50% to 6.25% with immediate effect. The RBI also decided to change the
monetary policy stance from calibrated tightening to neutral. The start of the
day was firm, aided by Moody's Investors Service's statement that the tax
relief steps for the middle-class and direct cash transfer programme for
farmers will give a fiscal stimulus of about 0.45% of Gross Domestic Product
(GDP), and support growth through increased consumption over the near term,
albeit at a fiscal cost. Some support also came with report that the government
allowed export of bio-fuels from special economic zones (SEZs) and
export-oriented units (EoUs) with certain conditions. In August 2018, the
government imposed restrictions on export of bio-fuels for non-fuel purposes.
In the second half of the session, the markets turned volatile and erased all
of their gains to end the trading session flat, tracking weak global markets.
Anxiety spread among the traders, after RBI raised concerns that in spite of
soft crude oil prices and the lagged impact of the recent depreciation of the
Indian rupee on net exports, slowing global demand could pose headwinds and
added that in particular, trade tensions and associated uncertainties appear to
be moderating global growth. The market participants paid no heed towards
reports that the commerce ministry proposed several measures such as setting up
of a separate fund, single-window e-marketplace and a law to define the role of
various stakeholders, as part of the draft national logistics policy. The
street also overlooked a report stating that the government decided to raise
additional Rs 36,000 crore through dated securities during the current
financial year (FY19), with an aim to meet additional expenses. The government
will borrow additional Rs 36,000 crore through two tranches of Rs 18,000 crore
each during March 11-15 and March 18-22. Finally, the BSE Sensex fell 4.14
points or 0.01% to 36,971.09, while the CNX Nifty was up by 6.95 points or
0.06% to 11,069.40.
The US markets ended in red on
Thursday as slashed European growth forecasts and warnings on the US-China
trade dispute weighed on the sentiments. Renewed concerns about a US-China
trade deal generated selling pressure after a report that President Donald
Trump and Chinese President Xi Jinping are highly unlikely to meet before a
March 02 deadline. The report comes after White House economic adviser Larry
Kudlow told Fox Business the US and China have a pretty sizable distance to go
before reaching a trade deal. Besides, worries about the US-China trade talks
added to concerns about the global economy raised by the European Commission
lowering its eurozone growth forecast. The European Commission slashed its GDP
growth forecast for 2019 to 1.3% from 1.9% and lowered its estimate for growth
in 2020 to 1.6% from 1.7%. The downgrade reflected external factors, such as
trade tensions and the slowdown in emerging markets, notably in China. On the
economic front, first-time claims for US unemployment benefits pulled back in
the week ended February 02 after the jump seen in the previous week, according
to a report released by the Labor Department. The report said initial jobless
claims fell to 234,000, a decrease of 19,000 from the previous week's unrevised
level of 253,000. Street had expected jobless claims to drop to 221,000. The
smaller-than-expected decrease came after jobless claims rebounded to their
highest level since September of 2017 in the previous week. The Labor
Department said the less volatile four-week moving average rose to 224,750, an
increase of 4,500 from the previous week's unrevised average of 220,250.
Continuing claims, a reading on the number of people receiving ongoing
unemployment assistance, slid by 42,000 to 1.736 million in the week ended
January 26. Dow Jones Industrial Average dropped 220.77 points or 0.87 percent
to 25169.53, S&P 500 declined 25.56 points or 0.94 percent to 2706.05 and
Nasdaq was down by 86.93 points or 1.18 percent to 7288.35.
Crude oil futures settled lower
on Thursday after the European Commission slashed growth forecasts for the
eurozone and its major economies sharply for 2019 and 2020, further stoking
concerns of a global growth slowdown.
Further, the decline in oil came on reports that Libya could soon
increase production. Libyan general took control of the country's largest oil
field, the Sharara, raising the likelihood the facility will restart
production. The added supply could bring more oil to the global market and put
downward pressure on prices. The Sharara facilities, which can pump roughly
315,000 barrels a day of crude, were shut down late in 2018 after a group of
armed gunmen took control of the field demanding better living conditions in
the region. Benchmark crude oil futures for March dropped $1.37 or 2.5 percent
to settle $52.64 a barrel on the New York Mercantile Exchange. April Brent
crude declined $1.06 or 1.7 percent to settle at $61.63 a barrel on London's
Intercontinental Exchange.
Rising
for the third straight session, Indian rupee ended marginally higher against
dollar on Thursday, on persistent selling of the American currency by
exporters. Market participants got some comfort after the RBI's Monetary Policy
Committee (MPC) lowered the repo rate by 25 basis points to 6.25 percent. The
MPC changed the policy stance to neutral from calibrated tightening. It also
pegged H1 FY20 (April-September) inflation at 3.2-3.4 percent, assuming a
normal monsoon. Some support came with Moody's Investors Service's statement
that the direct cash transfer programme for farmers and tax relief steps for
the middle-class will give a fiscal stimulus of about 0.45 percent of GDP, and
support growth through increased consumption, though at a fiscal cost. On the
global front, euro weakened on Thursday after data showed Germany's economy
slowed in December, underscoring fears about a broader slump in Europe. Finally, the rupee ended at 71.45, 11 paise
stronger from its previous close of 71.56 on Wednesday.
The FIIs as per Thursday'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 4468.47 crore against gross
selling of Rs 3375.74 crore, while in the debt segment, the gross purchase was
of Rs 88.86 crore with gross sales of Rs 360.49 crore. Besides, in the hybrid
segment, the gross selling was of Rs 0.52 crore against no buying.
The US markets ended sharply
lower on Thursday as trade tensions and bleak economic data from Europe renewed
fears of a slowdown in global growth. Asian markets are trading in red on
Friday as investors fretted about a broadening global economic slowdown.
Erasing most of the early gains, Indian markets ended almost flat on Thursday
after the Reserve Bank of India (RBI) unexpectedly cut the repo rate by 0.25%
to 6.25%, saying inflation will likely stay within its target range. Today, the
start of the session is likely to be cautious amid global growth concerns.
However, some support may come later in the day with Finance Minister Piyush
Goyal's statement that the rate cut by the RBI will give a boost to the economy
by providing affordable credit to small businesses and homebuyers. The RBI has
reduced repo rate (at which RBI lends to banks) by 0.25% to 6.25%, a move that
will translate into softening interest rates. Besides, welcoming the RBI's
decision, Economic Affairs Secretary Subhash Chandra Garg said it is a very
balanced and pragmatic policy statement. Meanwhile, India has jumped eight
places to 36th position on the International Intellectual Property (IP) Index,
which analyses the IP climate in 50 global economies, this year. India's
eight-point jump in 2019 from 44th position in 2018 is the highest increase
among 50 nations mapped by the index. The report said the improvement reflects
important reforms implemented by Indian policy-makers towards building and
sustaining an innovation ecosystem for domestic entrepreneurs and foreign
investors alike. Besides, a report stated that as many as 21 firms including
Religare Enterprises, Reliance Naval and Engineering, and Binani Industries
have come under short-term additional surveillance measure (ASM) framework of
the NSE. Under the short-term ASM framework, NSE said the applicable rate of
margin is fixed at 1.5 times the existing margin or 40%, whichever is higher,
subject to maximum rate of margin capped to 100%. There will be some buzz in
the aviation sector stocks with an International Air Transport Association
(IATA) report stating that there is an 18.6% annual increase in domestic
aviation sector considering the rise in Indians preferring to fly across the
country last year. Also, there will be some reaction in non-banking finance
companies (NBFCs) stocks with report that the RBI has decided to assign risk
weights for the rated exposures of banks to all NBFCs to facilitate credit flow
to the sector that is reeling under liquidity pressure post IL&FS defaults
in August. 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
|
11,069.40
|
11,035.97
|
11,110.47
|
BSE Sensex
|
36,971.09
|
36,855.87
|
37,129.25
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
444.95
|
176.95
|
174.20
|
180.75
|
SBI
|
197.33
|
287.40
|
284.67
|
292.07
|
Sunpharma
|
181.87
|
434.90
|
422.07
|
446.77
|
Tata Motors
|
161.53
|
182.85
|
179.50
|
185.60
|
ZEEL
|
150.12
|
408.75
|
392.67
|
418.17
|
Coal India has supplied 407.02 MT coal to power sector during current year up to February 4, 2019, thereby achieving a growth of 7.3% over the same period of last year.
Yes Bank has signed a MoU with MG Motor India to offer financing and banking solutions to both the MG Motor dealers as well as the end consumers.
Bharti Airtel has further upgraded its 4G network in Punjab with the deployment of LTE 900 technology.
Tata Motors has reported a consolidated net loss of Rs 26,992.54 crore for Q3FY19 against net profit of Rs 1,198.63 crore for Q3FY18.