Indian equity benchmarks ended
the Tuesday's trade in red terrain as traders opted to remain on sidelines
ahead of Gross Domestic Product (GDP) numbers for December quarter to be
released on Wednesday. Despite making an optimistic start markets turned negative
and traded choppy throughout the session, as traders remained concerned on
report that investments in the domestic capital market through participatory
notes (P-notes) plunged to a nearly eight-and-a-half-year low of Rs 1.19 lakh
crore in January-end amid stringent norms put in place by regulator SEBI to
check misuse. Traders also remained worried on private report stating that
inflation is expected to trend higher and though RBI may keep policy rates on
hold in 2018-19, there are also increasing chances of a rate hike. Sentiments
remained downbeat, as the government categorised around 9,500 non-banking
financial companies -- about 80 per cent of the NBFCs in the country -- as high
risk prone as they have not complied with a stipulated provision of the
anti-money laundering law. However, losses remained capped as traders get some
relief with report that India's economic recovery is expected to have gathered
momentum as economists expect India's GDP to grow 6.9 percent in the December
quarter, the fastest pace in a year and up from 6.3 percent in July-September
quarter, on the back of increased spending by consumers, businesses and the
government. Investors also got some solace with economic think-tank NCAER's
report that the Indian economy is projected to grow at 6.7 per cent in the
current financial year and 7.5 per cent in 2018-19. The figures are in line
with the growth projections in this year's Economic Survey, which said India is
likely to clock 7-7.5 per cent growth in 2018-19, up from 6.75 per cent in the
current fiscal. Some support also came with report that the government plans to
cut red tape and ease rules for foreign portfolio investors (FPI), as it seeks
to attract more investments into Asia's third-largest economy. Finally, the BSE
Sensex shed 99.36 points or 0.29% to 34,346.39, while the CNX Nifty was down by
28.30 points or 0.27% to 10,554.30.
The US markets closed lower on
Tuesday, after Federal Reserve Chairman Jerome Powell highlighted the
strengthening economy during his congressional testimony, but investors grew
jittery that improvement may prompt the central bank to be more aggressive in
tightening monetary policy. Federal Reserve Chairman Jerome Powell, in his
first public appearance as head of the US central bank, vowed to prevent the
economy from overheating while sticking with a plan to gradually raise interest
rates. On the economy front, an early look at US trade patterns in January
points to another increase in the nation's trade deficit that is likely to act
as a drag on first-quarter gross domestic product. The trade gap in goods -
services are excluded - rose 3% to $74.4 billion last month. The government
will release overall trade numbers for January next week, but the size of the
deficit is tied to changes in exports and imports of goods. Trade patterns
involving services rarely change much from month to month. Advanced reports for
retail and wholesale inventories, meanwhile, both increased in January. Retail
inventories jumped 0.8% and wholesale inventories climbed 0.7%. On the other
hand, consumer confidence surged in February, the first month Americans started
to benefit from the Trump tax cuts, to the highest level since November 2000. The
Dow Jones Industrial Average lost 299.24 points or 1.16 percent to 25,410.03,
Nasdaq was down by 91.11 points or 1.23 percent to 7,330.35 and S&P 500
dropped 35.32 points or 1.27 percent to 2,744.28.
Crude oil futures edged lower on
Tuesday, trimming recent gains as the dollar strengthened versus major rivals.
The dollar rallied on perceived hawkish remarks from new Federal Reserve Chair
Jerome Powell. In Powell's view, the recent stock market correction will not
convince the Fed to delay raising interest rates. The crude prices also decline
on expectations that upcoming weekly data will show an increase in US crude
inventories. There is a forecast that data would show U.S. crude inventories
rose by 2.7 million barrels last week. U.S. crude inventories have fallen more
than 100 million barrels in 12 months to their lowest in three years. Benchmark
crude oil futures for April delivery surged 90 cents or 1.4 percent at $63.01 a
barrel on the New York Mercantile Exchange. April Brent crude declined 87 cents
to settle at $66.63 a barrel on London's Intercontinental Exchange.
Indian
rupee continued its downtrend for the second-straight day against the US dollar
on Tuesday, on sustained bouts of month-end dollar demand from importers and
banks. Also, weak domestic equity markets weighed on the rupee. Traders
remained worried on private report stating that inflation is expected to trend
higher and though RBI may keep policy rates on hold in 2018-19, there are also
increasing chances of a rate hike. Investors also remained cautious ahead of
domestic economic data including December quarter gross domestic product (GDP)
and fiscal deficit, scheduled to be released on Wednesday. On the global front,
Pound Sterling moved higher against the US Dollar on Tuesday, as investors sit
on the sidelines ahead of testimony from Jerome Powell, the newly appointed
chief of the US Federal Reserve Bank. Finally, the rupee ended at 64.89, 10
paise weaker from its previous close of 64.79 on Monday.
The FIIs as per Tuesday's data
were net sellers in equity segment, while they were net buyers in debt segment,
equity segment, the gross buying was of Rs 4282.43 crore against gross selling
of Rs 5397.36 crore, while the debt segment, the gross purchase was of Rs
1044.58 crore with gross sales of Rs 965.86 crore. Besides, the hybrid segment,
the gross buying was of Rs 0.05 crore against gross selling of Rs 0.48 crore.
The US markets
closed sharply lower on Tuesday after new Fed Chairman Jerome Powell
highlighted the strengthening economy during his congressional testimony,
raising concerns over the possibility of four rate increases this year. Asian
markets were trading in red on Wednesday, following a congressional testimony
from the Federal Reserve's new chief. Indian markets edged slightly lower on
Tuesday, with banks suffering heavy losses once again, after media reports
suggested that the amount of fraud at PNB could be more than the current
estimate. Today, the start of the session is likely to be on negative side on
weak global cues and traders will be eyeing the dataprint for the December
quarter GDP and fiscal deficit data that will be announced later in the day.
Traders will also be eyeing manufacturing PMI to be released later in the day.
Market participants may remain concern with report that the collection of Goods
and Services Tax (GST) slipped marginally to Rs 86,318 crore in January, from
Rs 86,703 crore in December. The total revenue received under GST for the month
of January 2018 (received in January/February up to February 25, 2018) has been
Rs 86,318 crore. However, investors may get some support with Finance Minister
Arun Jaitley's statement that India's economy has the potential to achieve a
growth rate of more than 7-8 per cent in view of policy changes accompanied by
a supportive global environment. He also said India will continue to remain one
of the fastest growing economies in the world. On GST, he said that a single
rate for GST cannot work at the moment but the compliance will be made simpler.
There will be buzz in Steel related stocks on World Steel Association's report
that India's crude steel production grew 2.5 per cent to 9.02 million tonne
(MT) in January 2018 compared to 8.81 MT in the year-ago month.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,554.30
|
10,517.15
|
10,611.55
|
BSE Sensex
|
34,346.39
|
34,237.24
|
34,533.16
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
SBI
|
208.25
|
267.60
|
263.73
|
273.68
|
Yes Bank
|
151.04
|
327.15
|
323.35
|
332.60
|
Ambuja Cements
|
104.03
|
251.40
|
247.00
|
258.35
|
Power Grid
|
97.50
|
197.75
|
196.12
|
198.82
|
ICICI Bank
|
96.24
|
322.15
|
318.85
|
326.25
|
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