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NSE Intra-day chart (06 April 2018)
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Market Commentary 09 April 2018
Markets likely to make slightly in green start

 

Friday turned out to be a volatile day of trade for Indian equity benchmarks where key gauges somehow managed to keep their head above water and went home with marginal gains. Markets made a cautious start and traded mostly in red after US President Donald Trump ordered his administration to consider tariffs on a $100 billion worth of Chinese imports, dashing hopes for a cooling of trade tensions. The traders also reacted negatively to the report highlighting that 23,000 high net worth individuals (HNIs) have left India since 2014 including 7,000 in 2017 alone, highest numbers for any country. Sentiments remained down-beat after CARE Ratings in its latest report stated that even though RBI lowered its inflation projection sharply from previous forecasts in its first monetary policy review for the new financial year, two key factors -- the progress and spread of monsoons along with the MSP fixation by the government would be a key determinant for inflation in the coming months. Buying in last leg of trade helped markets to pare all of their early losses and end the session slightly in green terrain as traders get some solace after the finance ministry welcomed the Monetary Policy Committee's (MPC) projection of higher GDP growth and lower inflation in the current fiscal. The MPC's growth projection of 7.4% is in line with the Economic Survey. MPC has projected inflation at 4.5% in the fourth quarter of the last fiscal. The decision of MPC comes against the backdrop of government's assertion that both the fiscal deficit as well as the revenue shortfall in 2017-18 will be lower than the upwardly revised estimates given in the Union Budget. Sentiments also got some support with private report that Indian services sector climbed back into expansion zone in March, helped by the flow of new work, encouraging companies to hire at the fastest pace in seven years. Finally, the BSE Sensex gained 30.17 points or 0.09% to 33,626.97, while the CNX Nifty was up by 6.45 points or 0.06% to 10,331.60.

 

The US markets closed lower on Friday, led by a selloff in industrials and financials, as investors continued to fret over an escalating China-US trade fight. The main indexes sold off in early trade following President Donald Trump's proposal of fresh tariffs against China. The White House, in a statement released after the market closed on Thursday, said that Trump asked the US Trade Representative to consider an extra $100 billion in Chinese goods to face tariffs and to identify the products that could be targeted. China's commerce ministry responded to the latest tariff threat by saying it will respond with countermeasures if needed. On the economy front, the US gained just 103,000 new jobs in March to mark the smallest increase since last fall, but the latest report on employment still shows the tightest labor market in nearly two decades. The unemployment rate, however, clung to a 17-year low of 4.1% and it's expected to go even lower in the months ahead. Job openings are at a record high and big and small firms alike say they plan to add more workers. Although the number of new jobs created slowed sharply from February's revised 326,000 increase, the US added an average of 202,000 jobs a month in the first quarter. The Dow Jones Industrial Average lost 572.46 points or 2.34 percent to 23,932.76, the Nasdaq dropped 161.441 points or 2.28 percent to 6,915.11, while the S&P 500 was down by 58.37 points or 2.19 percent to 2,604.47.

 

Crude oil futures ended at two-week lows on Friday, weighed down by rising trade tensions between the US and China coupled with data showing an increase in the number of US rigs drilling for crude. Sentiments remained downbeat as US energy companies added oil rigs for the third time in four weeks as crude prices drifted from a three-year high hit earlier this year. Baker Hughes said that drillers added 11 oil rigs in the week to April 6, bringing the total count up to 808, the highest level since March 2015. This was the biggest weekly addition in about two months. The US rig count, an early indicator of future output, is much higher than a year ago when 672 rigs were active. Benchmark crude oil futures for May delivery was down by $1.48 or 2.3 percent to settle at $62.06 a barrel on the New York Mercantile Exchange. June Brent crude lost $1.22 or 1.8 percent to settle at $67.11 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended marginally lower against US dollar on Friday, due to fresh demand for the American currency from banks and importers. Traders remained concerned with CARE Ratings' report that even though RBI lowered its inflation projection sharply from previous forecasts in its first monetary policy review for the new financial year, two key factors -- the progress and spread of monsoons along with the MSP fixation by the government would be a key determinant for inflation in the coming months. However, dollar's weakness against some currencies overseas restricted the rupee's fall. On the global front, dollar faltered on Friday after US President Donald Trump threatened $100 billion in additional tariffs on China, in a fresh escalation of trade tensions between the world's largest economies. Finally, the rupee ended at 64.97, 1 paise weaker from its previous close of 64.96 on Thursday.

 

The FIIs as per Friday's data were net buyers in equity and debt segments both, in equity segment, the gross buying was of Rs 5189.27 crore against gross selling of Rs 4653.37 crore, while in the debt segment, the gross purchase was of Rs 1953.09 crore with gross sales of Rs 1328.82 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.49 crore against no selling.

 

The US markets closed sharply lower on Friday amid renewed trade war concerns after President Donald Trump threatened to impose $100 billion of additional tariffs on Chinese imports. Asian stocks are trading higher on Monday as a bounce in US stock futures soothed sentiment even as US President Donald Trump kept up his twitter war with China over trade just a couple of days before President Xi Jinping gives a keynote speech. Indian shares ended a lackluster session on a flat note on Friday, as fears of a global trade war persisted and investors exercised some caution after strong gains in the previous session. Today, the markets are likely to make flat-to-positive opening amid mixed global cues. The traders' focus now turns to quarterly earnings this week, with IT major Infosys likely to declare its March quarter results on April 13. On the macro economic front, the government will unveil industrial output figures for February and retail inflation data for March on April 12. Traders will remain little cautious on report that inflows into Indian equity funds in March were the smallest in 13 months as some investors sold before a tax on stock holdings took effect from April 1 and volatility returned to markets worldwide. Equity funds took in a net Rs 66.57 billion ($1 billion), the least since last February. Meanwhile, Economic Affairs Secretary Subhash Chandra Garg said India will have to create and nurture a very healthy and supportive macroeconomic environment to become $10 trillion economy by 2030. He added that government has taken many reform measures since 2014, including GST (Goods and Service Tax) and IBC (Insolvency and Bankruptcy Code). Metal stocks related to steel and aluminium will be buzzing in today's trade, as India will take up the issue of duty hike on certain steel and aluminium products by the US at the Trade Policy Forum (TPF) meeting on April 10. Tobacco stocks will remain in focus on report that the commerce and industry ministry has convened a meeting on April 11 of all stakeholders, including farmer associations, private companies and government departments to deliberate upon issues pertaining to foreign direct investment (FDI) in the tobacco sector.

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

10,331.60

10,298.15

10,357.75

BSE Sensex

33,626.97

33,519.72

33,715.86

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ICICI Bank

315.77

280.65

277.45

283.40

SBI

248.69

259.70

255.88

262.48

Hindalco

150.08

214.00

210.72

216.62

Tata Motors

132.97

364.10

357.58

369.48

Vedanta

95.19

285.05

281.83

287.93

  • Bharti Airtel will provide free live streaming of IPL cricket matches through Hotstar on its TV app to its customers. 
  • Lupin has received the EIR from USFDA for the successful inspection of its Pithampur, Unit 1. 
  • IndusInd Bank has collaborated with Samsung Electronics to enable its MasterCard and Visa Credit Card customers to use -- Samsung Pay. 
  • Zee Entertainment Enterprises' content syndication arm -- Global Content Hub has entered into partnership with British Airways for in-flight programming.
News Analysis

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