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NSE Intra-day chart (13 April 2018)
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Market Commentary 16 April 2018
Markets likely to make cautious start on lingering geopolitical concerns

 

Indian equity benchmarks extended the winning streak for seventh straight session with frontline gauges ending near their crucial 33,200 (Sensex) and 10,500 (Nifty) levels, as better than expected macro-economic data painted a positive picture of the economy. Markets started the session on an optimistic note with report that India's industrial output grew 7.1% year-on-year in February, bigger than the expected 6.8% expansion. The cumulative growth for the period April-February 2017-18 over the corresponding period of the previous year stood at 4.3%. India's Consumer Price Index (CPI) for the month of March came to 4.28% as compared to 4.44% in February. CPI food inflation for March also eased substantially to 2.81% versus 3.26% in last month. Traders also took some encouragement with report that the Confederation of Indian Industry (CII) is expecting India's gross domestic product (GDP) to grow at 7.3-7.7% during the 2018-19 financial year. This is based on strengthening demand in the rural economy, including agriculture and non-farm activities, as well as better global growth climate. However, some profit booking was seen in second half of trade with market participants paring most of their gains as some concerns came with former RBI governor Raghuram Rajan's statement that he made it quite clear to the government that demonetisation was not a good idea and that its implementation was not well-planned since 87.5% of the currency was being demonetised. However, markets managed to end the session in green, as some support came with global rating agency, Moody's Investors Service in its latest report stating that the pick-up in India's GDP growth rate is optimistic for asset-backed securities (ABS), because such growth will support the ability of borrowers to earn income and repay loans backing ABS deals, including auto loans and loans against property to micro, small and medium enterprises (MSMEs). Finally, the BSE Sensex surged 91.52 points or 0.27% to 34,192.65, while the CNX Nifty was up by 21.95 points or 0.21% to 10,480.60.

 

The US markets closed the Friday's trade on pessimistic note, as better-than-expected first-quarter earnings failed to stir buying appetite on Wall Street. Underlining concerns about lofty quarterly expectations for American corporations and geopolitical anxiety too dampened sentiments. However markets started the session on optimistic note as traders reacted positively to earnings news from financial giants JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC). Buying interest waned shortly due to the release of a report from the University of Michigan showing a bigger than expected drop in consumer sentiment in the month of April. The report said the preliminary reading on the consumer sentiment index for April came in at 97.8 compared to the final March reading of 101.4. The street had expected the index to edge down to 100.5. Richard Curtin, the survey's chief economist said, the consumer sentiment slipped in early April, largely reversing the gains recorded in the prior two months. The small decline was widely shared by all age and income subgroups and across all regions of the country. He added, importantly, confidence still remains relatively high, despite the recent losses that were mainly due to concerns about the potential impact of Trump's trade policies on the domestic economy. The Dow Jones Industrial Average declined 122.91 points or 0.50 percent to 24,360.14, the Nasdaq dropped 33.60 points or 0.47 percent to 7,106.65, while the S&P 500 was down by 7.69 points or 0.29 percent to 2,656.30.

 

Crude oil futures ended higher on Friday on expectations that OPEC has re-balanced the oil markets with its supply quota plan. The cartel is determined to put a floor under oil prices around $70 a barrel. However, the brewing trade war between the U.S. and China could hurt oil demand, the IEA warned. Tensions in Syria and fears of a wider conflict including the U.S. and Russia have also boosted oil prices. Baker Hughes said the total active U.S. rig count, which includes oil and natural-gas rigs, rose by 5 to 1,008. Meanwhile, the IEA indicated that global oil stockpiles are dwindling and approaching the five-year average the Organization of the Petroleum Exporting Countries is targeting. Benchmark crude oil futures for May delivery gained 32 cents or 0.5 percent to settle at $67.39 a barrel on the New York Mercantile Exchange. June Brent crude jumped 56 cents or 0.8% percent to settle at $72.58 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended tad higher against dollar on Friday, owing to dollar sale by exporters and banks. Traders took some support with data showing that India's industrial production measured by Index of Industrial Production (IIP) grew at a faster rate of 7.1% in the month of February 2018 as against a growth rate of 1.2% in the same month of 2017, while retail inflation softened to a five-month low of 4.28% in the month of March 2018, as against 4.44% in February 2018, mainly on account of easing food prices including vegetables. However, dollar's strength against major global currencies overseas capped some of the rupee's gain. On the global front, dollar touched a six-week high against the Japanese yen on Friday, as caution over an imminent Western military intervention in Syria eased and anticipation for a solid round of US corporate earnings helped support the US unit. Finally, the rupee ended at 65.21, 4 paise stronger from its previous close of 65.25 on Thursday.

 

The FIIs as per Friday's data were net buyers in equity and debt segments both, in the equity segment, the gross buying was of Rs 4721.42 crore against gross selling of Rs 4251.83 crore, while the debt segment, the gross purchase was of Rs 819.24 crore with gross sales of Rs 644.37 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.17 crore against no selling.

           

The US markets ended in red terrain on Friday as buying interest waned shortly after the open with traders turning reluctant to make significant moves ahead of a slew of earnings news next week. Asian markets were trading mixed on Monday, as investors digested the softer close on Wall Street and geopolitical tensions on the back of U.S. led airstrikes on Syria last week. Indian shares extended their winning streak to a seventh straight session on Friday as investors digested positive macro data and looked ahead to Infosys' earnings for directional cues. Today, the markets are likely to make a cautious start, as geopolitical concerns linger and focus gradually shifts to corporate earnings. Traders will also remained concerned with report that India's merchandise exports fell for the first time in five months in March and the trade deficit widened amid concerns over global trade and US moves to review a programme allowing duty-free imports of goods. India's merchandise exports in March fell 0.7 per cent year-on-year to $29.1 billion, and the trade deficit widened to $13.7 billion. Imports rose 7.2 percent on year to $42.8 billion in March. However, traders will get some support later in the day on World Economic Forum's (WEF) report that India is well positioned to play a key role in shaping the global fourth industrial revolution with a young labour force, a large English-speaking population and the second largest numbers of internet users. Some support may also come with Asian Development Bank's (ADB) statement that India can achieve over 8 per cent growth rate in a sustained manner if it takes steps to revive investments and make exports competitive. Infosys will be in focus after the IT major met Street expectations on financial numbers for the January-March quarter as well as for 2017-18. But the firm's revenue growth guidance for 2018-19, especially the projection on operating margin, disappointed investors.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

10,480.60

10,448.07

10,516.52

BSE Sensex

34,192.65

34,093.07

34,302.68

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

SBI

256.54

250.95

248.45

254.70

ICICI Bank 

174.97

288.25

285.67

290.97

Hindalco

167.75

237.80

235.43

239.33

Yes Bank

128.50

309.55

305.35

314.10

Vedanta 

115.10

291.65

288.53

294.73

 

  • HCL Technologies and Sumeru Equity Partners have signed a definitive agreement to acquire Actian Corporation. 
  • Tata Motors has unveiled a refreshed version of its sub one-tonne mini-truck Tata Ace, priced at Rs 3.75 lakh. 
  • Reliance Industries' telecom arm - Jio has entered into partnership with Sodexo to accelerate India's digital transformation. 
  • Bharti Airtel has rolled out another special initiative to help more Indians get on to the digital highway.
News Analysis

Essel Propack is issuing Commercial Papers (CP) for Rs 30 crore on private placement basis. The date of the issue is April 18, 2018 and the date of maturity is June 15, 2018, with coupon rate of 6.61% per annum and the CP has a tenure of 5...


Jumbo Bag has entered into an agreement with Scent Trans for acquisition of 1600 shares at the face value of Rs 10 aggregating to 16% of the share capital of Scent Trans. The acquisition is made for the purpose of power purchase from Scent...


Dilip Buildcon has incorporated 5 new special purpose vehicles (SPVs) companies for 5 projects awarded by the National Highways Authority of India valued at Rs 6306.9 crore.

The company has incorporated SPVs naming ‘DBL N...


Indiabulls Housing Finance is planning to raise funds by way of issue of secured and/or unsecured bonds, in one or more tranches. The meeting of the Board of Directors of the company will be held on April 20, 2018, to consider and approve ...