Daily Newsletter
NSE Intra-day chart (11 September 2018)
Top Gainers
Company NameClose% Change
Top Losers
Company NameClose% Change
World Indices
IndicesLast Trade% Change
Indices
IndicesLast Trade% Change
FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
Equity
Debt
Equity
Debt
Equity
Debt
 
Market Commentary 12 September 2018
Markets to make a cautious start amid mixed global cues


 

Bears tightened their grip on Dalal Street with frontline gauges extending southward journey for second straight session to settle below their crucial 11,300 (Nifty) and 37,500 (Sensex) levels. Markets made a cautious start and traded choppy for most part of day's trade with private report suggesting India's economic growth is expected to moderate in the second half of this financial year after a strong first quarter, owing to tighter financial conditions, high oil prices and slowing global growth. It expects real GDP growth to slow to 7-7.3% in the second half of this fiscal from 8.2% in June 2018 quarter. Adding to the pessimism, India Meteorological Department (IMD) data showed that the countrywide monsoon saw the highest rain deficiency of the season in August -- ironically the month when a large part of Kerala was submerged and many other states received excess rainfall. Traders also reacted negatively to another private report that a depreciating currency will impact the economy adversely, as India imports around 83% of its crude oil requirement. A surge in the oil import bill can widen fiscal and current account deficits. Sharp selloff in final hour of trade mainly played spoil sports for Indian equities and dragged key gauges near intraday lows. Sentiments remained downbeat with former RBI Governor Raghuram Rajan's statement that over optimistic bankers, slowdown in government decision making process and moderation in economic growth mainly contributed to the mounting bad loans. Caution also crept in ahead of Consumer Price Index-based (CPI) inflation and Index of Industrial Production data slated to be announced tomorrow. Traders shrugged off Asian Development Bank's (ADB) latest report on Key Indicators for Asia and the Pacific 2018, where it has stated that share of India in the Gross Domestic Product (GDP) of Asia and Pacific region moved up to 17.3% in 2017 from 14.6% in 2000. It added that the Asia and Pacific region accounts for more than two-fifths of the share of global GDP in Purchasing Power Parity (PPP) terms. Finally, the BSE Sensex declined by 509.04 points or 1.34% to 37,413.13, while the CNX Nifty was down by 150.60 points or 1.32% to 11,287.50.

 

The US markets ended in green on Tuesday with the Dow climbing by over 100 points, as energy and telecommunications rallied. Telecommunications were among the best performers while the energy sector got a lift from strong crude oil prices. Tech shares were also notable gainers with megacaps Apple, Facebook, and Microsoft Corp all rising sharply. The gain for Dow component Apple came a day ahead of the company's annual iPhone event, which could also see the company announce upgrades to other products, including a likely debut for a new version of the Apple Watch. However, there was cautiousness in the markets as investors continued to watch the situation between the US and China after President Donald Trump recently threatened China with fresh tariffs. The latest move by Trump would impact an additional $267 billion in Chinese goods, coming on top of an already-proposed $200 billion in tariffs. China has vowed to retaliate and plans to ask the World Trade Organization next week for permission to impose sanctions on the US for Washington's noncompliance with a ruling in a dispute over US dumping duties. Dow Jones Industrial Average rose 113.99 points or 0.44 percent to 25971.06, the S&P 500 added 10.76 points or 0.37 percent to 2887.89 and Nasdaq was up by 48.31 points or 0.61 percent to 7972.47.

 

Benchmark crude oil futures for October surged $1.71 or 2.5 percent to settle at $69.25 a barrel on the New York Mercantile Exchange. November Brent crude rose 1.69 or 2.2% to settle at $79.06 a barrel on London's Intercontinental Exchanged. Crude oil futures ended higher on Tuesday as the US government cut its forecasts for domestic production and concerns continued to grow over the potential for tighter global supplies ahead of renewed sanctions on Iran. It is expecting that the Energy Information Administration (EIA) to report a fall of 2.7 million barrels in crude supplies for the week ended September 7. Meanwhile, in a monthly report, the EIA said that Iranian crude production was down 200,000 barrels a day in August compared with July. Beside, some support also came in as a major hurricane approaching the US East Coast boosted demand for fuel and threatened the flow of gasoline through a key pipeline.

 

Continuing its record closing low for the second straight day, Indian rupee ended considerably weaker against the Greenback on Tuesday, on fresh bouts of dollar demand from importers. Investors remained concerned with private report suggesting India's economic growth is expected to moderate in the second half of this financial year after a strong first quarter, owing to tighter financial conditions, high oil prices and slowing global growth. It expects real GDP growth to slow to 7-7.3% in the second half of this fiscal from 8.2% in June 2018 quarter. Traders also reacted negatively to another private report highlighting that a depreciating currency will impact the economy adversely, as India imports around 83% of its crude oil requirement. A surge in the oil import bill can widen fiscal and current account deficits. Additionally, a firm dollar against some global currencies overseas along with sharp losses in the local equities also pressurized the sentiments. On the global front, the euro's bounce fizzled on Tuesday as a broad dip in investor appetite for risk dragged the single currency lower, offsetting recent positive sentiment toward Italian government debt before a central bank meeting later this week. Finally, the rupee ended at 72.69, 24 paise weaker from its previous close of 72.45 on Monday.

 

The FIIs as per Tuesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 5434.35 crore against gross selling of Rs 6396.43 crore, while in the debt segment, the gross purchase was of Rs 325.51 crore with gross sales of Rs 663.57 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.13 crore against gross selling of Rs 1.62 crore.

 

The US markets shrugged off trade worries and ended higher on Tuesday as gains in technology stocks helped the markets to regain footing and curbed losses in the materials and industrials sectors due to fears of an escalation in Sino-US trade spat. Asian markets were trading in red on Wednesday, as investor confidence was chilled by the latest round of verbal threats in an intensifying US-China trade conflict. The Indian markets witnessed a bloodbath for the second straight day on Tuesday as Sensex and Nifty fell over 1% after the rupee hit a fresh record low of 72.62, reversing initial gains. Today, the markets are likely to make a cautious start amid mixed global cues. Investors will be looking ahead to macroeconomic data such as Index of Industrial Production (IIP) and Consumer Price Index (CPI) to be announced after the market hours, for clues to whether the Reserve Bank of India (RBI) will front-load its hiking cycle to keep inflation under check. Investors will be also closely watching rupee movement. Traders will be concerned about a private report that regulatory policies pose the biggest risks for companies over the next three years, followed by cyber security and technology disruptions. The report showed a divide on the viewpoint of risk management amongst Indian organisations. However, traders may get some encouragement with Moody's Investors Service's report that the sharp depreciation in rupee's valuation is unlikely to impact India's sovereign credit profile as rupee-denominated government bonds and robust foreign exchange reserves mitigate the risk. Also, traders may get some support with the Finance Ministry's statement that the decision to double the limit to Rs 20 lakh for filing applications in debt recovery tribunals will help them focus on high value matters leading to quicker recovery of bad loans. Meanwhile, SBI Ecowrap report stated that the recent increase in petrol and diesel prices is likely to give state governments a windfall gain of around Rs 22,700 crore over and above the budget estimates for current fiscal. It said the this windfall gain will have positive impact on state finances, which might push down the states' fiscal deficit by 15-20 bps, other things remaining unchanged. The power stocks will keep buzzing after the Supreme Court asked banks to maintain status quo and not to initiate insolvency proceedings against loan defaulting power companies in the country. There will be some buzz in the steel sector stocks with the Steel Ministry's statement that India is hopeful of occupying the second slot in global steel output after China while the government has also taken steps to encourage secondary steel producers to boost performance.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,287.50

11,214.53

11,419.93

BSE Sensex

37,413.13

37,168.46

37,850.53

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

285.54

316.60

311.52

324.77

SBI

283.61

282.60

279.02

288.82

ITC 

260.07

297.20

292.92

304.12

Axis Bank 

191.62

650.15

643.17

661.42

Vedanta 

142.76

219.65

215.97

225.37

 

  • IOC has entered into a MoU with the Haryana government on September 10, 2018, to set up an ethanol plant in Panipat. 
  • ICICI Bank along with BSE and PTC India has filed a petition with CERC on September 7, 2018 for grant of license for setting up a new power exchange. 
  • UltraTech Cement has joined EP100 to double energy productivity. 
  • Yes Bank has raised $400 million through syndicated loan facility, borrowed out of its IFSC Banking Unit in Gujarat International Finance Tec-City.
News Analysis

Kalpataru Power Transmission has received an approval to raise funds through issuance of Zero Coupon Listed Rated Unsecured Redeemable Taxable Non-Convertible Debentures (NCDs) of Rs 100 crore on private placement basis. The said NCDs shal...


Tiaan Ayurvedic & Herbs has entered into Memorandum of Understanding (MoU) to acquire land in Maharashtra. The company will acquire land of 100000 Sq. feet Situated at Mauja aakewada, Jilla Nagpur, State- Maharashtra for Rs 1.25 crore ...


SpiceJet is planning to hike fares in the next few months, on the back of rising fuel prices, falling rupee and intense competition which are taking a toll on the profitability of airlines. The Aviation turbine fuel (ATF) accounts for a si...


Essel Propack is issuing Commercial Papers (CPs) for Rs 60 crore on private placement basis. The CPs for Rs 60 crore with date of maturity as September 14, 2018 will be redeemed as per the terms.

Essel Propack is a pr...