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NSE Intra-day chart (09 April 2018)
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Market Commentary 10 April 2018
Markets likely to make optimistic start on firm global cues

 

Indian equity benchmarks ended the Monday's trade on an optimistic note with frontline gauges garnering the gains of around half a percent, as traders remained hopeful ahead of quarterly earnings this week, with IT major Infosys likely to declare its March quarter results on April 13. After a cautious start, markets gained strength, as sentiments turned upbeat on the World Economic Situation and Prospects 2018 report of the United Nations, which enlightened that the Indian economy is projected to grow at 7.2% in 2018-19 and 7.4% in 2019-20. The report indicates that the outlook for India remains largely positive, underpinned by robust private consumption and public investment as well as ongoing structural reforms. Sentiments also got some support with Finance Minister Arun Jaitley's statement that the Indian economy, which saw temporary disruptions caused by demonetization and the roll-out of the Goods and Services Tax (GST) over the past two years, will see consolidation in the current fiscal. Jaitley added that reforms such as GST, Insolvency and Bankruptcy Code and new income tax regulations are contributing to a better investment climate. 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 and IBC (Insolvency and Bankruptcy Code). Separately, industry CII welcomed the launch of the E-way Bill system for inter-state movement of goods under GST, saying it will pave the way for widening of the tax base, reduce logistics costs, and faster movement of goods. The industry body added that the major relief to industry and business is in hassle-free movement of goods across state borders under GST by removing the state barriers, which is a milestone for improvement in ease of doing business. Finally, the BSE Sensex surged 161.57 points or 0.48% to 33,788.54, while the CNX Nifty was up by 47.75 points or 0.46% to 10,379.35.

 

The US markets closed higher on Monday, thanks to signs that Trump may have softened his approach in a trade spat with China lifted appetite for global equities across the board. China's foreign ministry spokesman, Geng Shuang, said trade tensions were the fault of the US and that his country couldn't engage in negotiations on the situation as it stands. Separately, the International Monetary Fund (IMF) urged policy makers to raise productivity towards supporting their goal of equitable growth, as the declining share of manufacturing jobs in overall employment has been a concern for policymakers and the broader public alike in both advanced economies and some developing economies. IMF in its release of the World Economic Outlook enlightened that the goal of supporting equitable growth would be better served by policy efforts to raise productivity across all sectors and make the gains from higher productivity more inclusive. Meanwhile, the Congressional Budget Office forecast the return of trillion-dollar deficits in 2020, in the nonpartisan agency's first budget update since the enactment of President Donald Trump's tax cut law last year and the big spending bill this year. The CBO said the deficit for fiscal 2018 would total $804 billion, up from $665 billion in the last fiscal year. In 2019, the agency said, the shortfall will total $981 billion. The Dow Jones Industrial Average added 46.34 points or 0.19 percent to 23,979.10, the Nasdaq gained 35.233 points or 0.51 percent to 6,950.34, while the S&P 500 was up by 8.69 points or 0.33 percent to 2,613.16.

 

Crude oil futures edged higher on Monday as Donald Trump eased fears of a trade war with China. The president was magnanimous toward China in a tweet that was cheered by global stock markets. Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and 10 countries outside the oil cartel, including Russia, have been holding back crude output by 1.8 million barrels a day since the start of last year. The agreement, which is set to expire at the end of 2018, helped crude prices climb more than 50% in the second half of last year. Benchmark crude oil futures for May delivery gained $1.36 or 2.2 percent to settle at $63.42 a barrel on the New York Mercantile Exchange. June Brent crude jumped $1.54 or 2.3 percent to settle at $68.65 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended marginally lower against US dollar on Monday, due to fresh demand for the American currency from banks and importers. Traders failed to get relief with the World Economic Situation and Prospects 2018 report of the United Nations, which enlightening that the Indian economy is projected to grow at 7.2% in 2018-19 and 7.4% in 2019-20. The report indicates that the outlook for India remains largely positive, underpinned by robust private consumption and public investment as well as ongoing structural reforms. Besides, dollar's renewed strength against other currencies overseas too weighed on the rupee. On the global front, dollar edged higher on Monday, extending a two-week winning streak, as rising stock markets signalled a return in risk appetite, though investors remained wary about trade tensions between the United States and China. Finally, the rupee ended at 65.03, 6 paise weaker from its previous close of 64.97 on Friday.

 

The FIIs as per Monday's data were net sellers in equity segment, in equity segment, the gross buying was of Rs 3992.98 crore against gross selling of Rs 4083.73 crore, while in the debt segment, the gross purchase was of Rs 2322.00 crore with gross sales of Rs 1391.85 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.66 crore against no selling.

 

U.S. stocks failed to sustain early gains and ended with marginal gains on Monday amid lingering concerns about a potential trade war between the U.S. and China. There was some initial optimism when Donald Trump made a conciliatory gesture toward Chinese leadership. Asian markets rallied in early deals as investors digested comments from Chinese President Xi Jinping on measures planned to further open up the Chinese economy. Indian markets rose for a third consecutive session on Monday as investors downplayed fears of a global trade war and pinned hopes for strong quarterly earnings. Today, the markets are likely to make positive opening amid firm global cues. Investors may bet for improved corporate earnings and acceleration in economic growth, with readings on industrial production and retail inflation due on Thursday. Traders will get some encouragement with Commerce and Industry Minister Suresh Prabhu's statement that India can benefit from the ongoing challenges in global trade provided it plays its cards well. He said, we are passing through a challenging but an opportune time. If we play our cards properly, and that is what we are trying to do we can actually benefit from it by creating an opportunity around the issues that are happening globally and we have no choice but to respond in a positive manner. Traders will continue to take support from Minister for Finance and Corporate Affairs, Arun Jaitley's statement that the coming financial year will see the Indian economy becoming more robust. He said, reforms such as GST, Insolvency and Bankruptcy Code and new income tax regulations are contributing to a better investment climate. There will be buzz in cement related stocks on ICRA's report that the cement industry is likely to register a flat growth of around 5 per cent in the current financial year despite a pick-up in demand in recent months and healthy outlook ahead.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

10,379.35

10,339.33

10,408.53

BSE Sensex

33,788.54

33,629.47

33,897.06

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ICICI Bank

317.13

280.85

275.65

284.75

SBI

202.09

260.65

257.92

263.07

Hindalco

184.12

221.35

216.17

225.02

Yes Bank

140.02

316.25

313.80

319.30

Indian Oil

122.38

179.80

175.95

182.30

 

  • SBI has put 12 NPAs with total outstanding of Rs 848.54 crore for sale. 
  • Bharti Airtel has introduced an all new superfast Home broadband plan with speeds of up to 300 Mbps over Wi-Fi. 
  • ONGC has kick-started its $5.07 billion KG oil and gas project by spudding the first of the 34 wells, targeting first gas by end of 2019. 
  • Power Grid Corporation of India has bagged project management consultancy contract of Rs 21 crore from Power Grid of Bangladesh.
News Analysis

Shankara Building Products has the opened its 131st store under the ‘Shankara BuildPro' brand at Ranibennur in Karnataka

The store admeasures around 2160 Square Feet and houses a diverse basket of product offerings.


Bharat Wire Ropes has received an approval for raising of additional capital by way of one or more public or private offerings including through a Qualified Institutions Placement (QIP) to eligible investors through an issuance of equity s...


Tata Communications has been selected as the principal partner by the Confederation of Indian Industry (CII) to help organisations in India unlock the true benefits of digital technologies. The newly formed CII - Tata Communications Centre...


DCM Shriram Industries is foraying into defence manufacturing. The company is launching a Light Bullet Proof Vehicle (LBPV) - ‘ZEBU' - for use by Indian Defence and Para-Military forces.  In this regard, the company has successfully, ...