Extending losing streak for fifth
straight session, Indian equity benchmarks witnessed bloodbath on Monday, with
frontline gauges ending below their crucial 36,400 (Sensex) and 11,000 (Nifty)
levels. Markets started the session on cautious note and never looked in
recovery mood to end near intraday low levels. Sentiments remained dampened
since beginning of the trade on industry chamber CII's report that over 40 per
cent of Indian firms expect the Reserve Bank of India (RBI) will go in for
another interest rate hike in the current fiscal. A CII release said that its
quarterly Business Confidence Index (BCI), conducted during July-September
2018, covered nearly 200 firms of varying sizes. In the current survey, about
42 per cent of the respondents felt that the RBI will engage in further
interest rates hikes in 2018-19 as compared to the previous survey where a
majority of the respondents anticipated a cut or no change in policy rates in
2018-19. Traders remain concerned with report that overseas investors have
pulled out a massive Rs 15,365 crore from the capital markets till September
21, after putting in funds during the previous two months, on widening current
account deficit coupled with global trade tensions. Markets extended southward
journey in second half to end near intraday lows, as traders remain with
Moody's Investors Service's latest report stating that the government's
measures to boost capital inflow in to the country is unlikely to reverse the
rupee depreciation. Moody's further noted that steps to reduce non-essential
goods import may provide support to contain the imports bill, but will likely
have a lagged effect. Traders failed to get any sense of relief with report
that Fitch Ratings has raised India's growth forecast for the current fiscal to
7.8 percent, from 7.4 percent projected earlier. In its Global Economic
Outlook, Fitch, however, flagged tightening of financial conditions, rising oil
bill and weak bank balance sheets as headwinds to growth. Traders shrugged off
report that the southwest monsoon is expected to start withdrawing towards the
end of this month, nearly a month behind schedule. This year's delayed
withdrawal is likely to help the country avoid a drought situation, even as
countrywide rainfall is hovering on borderline drought conditions, measuring
10% below normal levels since the beginning of the monsoon season. Finally, the
BSE Sensex declined 536.58 points or 1.46% to 36,305.02, while the CNX Nifty
was down by 175.70 points or 1.58% to 10,967.40.
The US markets settled mostly in
red on Monday, amid news China has canceled trade talks with the U.S. as
tariffs on billions of dollars' worth of goods take effect. While Wall Street
has repeatedly ignored the threat of rising trade tensions, focusing instead on
strong economic data and corporate fundamentals, there remains concerns that
the situation could escalate into a full-blown trade war, which could have a
more severe impact on global demand and growth. Traders seem somewhat reluctant
to make more significant moves, however, with the upcoming Federal Reserve
meeting keeping some traders on the sidelines. The Fed is scheduled to announce
it latest monetary policy decision on September 26 and is widely expected to
raise interest rates by another quarter point. The accompanying statement is
likely to attract considerable attention along with Fed Chairman Jerome
Powell's press conference as traders attempt to gauge the outlook for further
rate hikes. The S&P 500 slipped 10.30 points or 0.35 percent to 2,919.37
and Dow Jones Industrial Average was down by 181.45 points or 0.68 percent to
26,562.05, while Nasdaq surged 6.29 points or 0.08 percent to 7993.25.
Crude oil futures settled higher
on Monday, as crude exports from Iran dropped and top oil producers signaled
they are not in rush to increase production. Crude exports from Iran dropped
down, and more reduction is likely with U.S. sanctions on Iranian oil set to
take effect from November. Meanwhile, leading oil producers, led by Saudi
Arabia and Russia signaled they were in no hurry to increase output. Meanwhile,
U.S. President Donald Trump had called on the OPEC countries to lower prices
last week. Saudi Energy Minister Khalild al-Falih said on Sunday that he does
not influence prices. Benchmark crude oil futures for October gained $1.30 or
1.8 percent to settle at $72.08 a barrel on the New York Mercantile Exchange.
November Brent crude was up by $2.40 or 3.10% to settle at $81.20 a barrel on
London's Intercontinental Exchanged.
Indian
rupee ended considerably weaker against the US dollar on Monday, tracking panic
selling in the local equity markets. Investors remain concerned with CII report
that over 40 per cent of Indian companies surveyed by industry chamber CII are
expecting that the Reserve Bank will go in for a further hike in interest rates
in the current fiscal. Investors ignored the report that Fitch Ratings has
raised India's growth forecast for the current fiscal to 7.8 percent, from 7.4
percent projected earlier. In its Global Economic Outlook, Fitch, however,
flagged tightening of financial conditions, rising oil bill and weak bank
balance sheets as headwinds to growth. Moreover, the greenback's strength
against other currencies overseas also put pressure on the rupee. On the global
front, dollar edged higher on Monday, snapping a two-week losing streak, as
investors bought the greenback before a widely expected interest rate hike by
the U.S. central bank this week while trade war concerns checked investor
appetite for risk. Finally, the rupee ended at 72.63, 43 paise weaker from its
previous close of 72.20 on Friday.
The FIIs as per Monday'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 15358.98 crore against gross
selling of Rs 14533.53 crore, while in the debt segment, the gross purchase was
of Rs 1812.44 crore with gross sales of Rs 1314.97 crore. Besides, in the
hybrid segment, the gross buying was of Rs 0.65 crore against gross selling of
Rs 4.48 crore.
The US markets closed mostly
lower on Monday as the US-China trade war entered a new phase when tariffs on
billions of dollars of products took effect. Investors also remained on
sidelines looking ahead to the Federal Reserve's two-day monetary policy
meeting. Asian markets were exhibiting mixed trend in early deals on Tuesday,
as investors pondered concerns about the outlook for global trade and American
politics. Equities climbed in Japan as traders returned from a holiday, though
Chinese shares headed in the opposite direction after a long weekend. Indian
equity benchmarks came under heavy selling pressure on Monday as trade tensions
persisted and oil prices jumped around 2 percent on signs of tightening global
supply, aggravating concerns over the risk of twin deficits. Today, the markets
are likely to make cautious start on weak global cues. Traders may remain
concerned with private report stating that India's current account deficit
(CAD) is expected to be widened by 0.20 per cent to 2.8 per cent of GDP for fiscal
year 2018-19. The widening current account gap is one of the major concerns
which is putting pressure on the rupee, which has depreciated 13 per cent
against dollar this year. Traders may take note of World Bank's report that
India's current trade in goods with its neighbouring countries in the South
Asian region is a mere 30.65 per cent of the potential trade of $ 62 billion,
which can be boosted if certain restrictions on the current trade, like
tariffs, port restrictions and other non-tariff barriers can be eased.
Meanwhile, the government has extended by a fortnight till October 15 the
deadline for filing Income Tax Return (ITR) and audit report for financial year
2017-18. The Central Board of Direct Taxes (CBDT) had received representations
from stakeholders seeking extension of the last date for filing of returns by
taxpayers whose accounts have to be audited. There will be buzz in oil and gas
related stocks as fuel prices increased, with petrol registering a record high
of Rs 90.22 a litre in Mumbai. Diesel prices too rose in the financial capital
to Rs 78.69 a litre. Stocks related to public sector banks (PSBs) will be in
focus as Finance Minister Arun Jaitley will hold the annual review meeting with
chief executives and the top management of PSBs on September 25.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,967.40
|
10,888.95
|
11,115.50
|
BSE Sensex
|
36,305.02
|
36,032.81
|
36,761.36
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,057.01
|
226.40
|
215.67
|
237.32
|
SBI
|
246.33
|
264.35
|
260.30
|
270.70
|
ICICI Bank
|
243.82
|
308.75
|
303.93
|
315.18
|
Vedanta
|
209.43
|
229.90
|
226.25
|
235.55
|
ITC
|
144.53
|
297.95
|
291.52
|
305.37
|
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