NSE Intra-day chart (29 March 2019)
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Market Commentary 01 April 2019
Markets to start new fiscal year on an optimistic note

 

Key Indian bourses ended the last trading day of the financial year 2018-19 on a firm note, with Sensex and Nifty regaining crucial psychological levels of 38,600 and 11,600, respectively. After a jubilant start, the markets seemed choppy to trade with marginal gains, affected by Crisil Research's report stating that India Inc's revenue growth is likely to halve in the fourth quarter due to slump in commodity prices but fall in input costs will shore up profitability of end-user industries. Crisil expects on-year corporate revenue growth for the current quarter to print at 8-9%, down sharply from the average of 16.5% in the previous three quarters. But, trade remained positive throughout the day, buoyed by Commerce Minister Suresh Prabhu's statement that India's merchandise and services export would touch $540-billion mark this fiscal. He said exports are growing at a healthy pace and shipments of goods would reach over $330 billion. Similarly, services exports would touch about $200 billion. In noon deals, the markets added gains, following firm cues from global markets. Domestic sentiments were positive as Finance Commission Chairman N K Singh made a case for setting up a fiscal council as an institutional mechanism to monitor fiscal consolidation roadmap of the Centre and state governments. He also said fiscal federalism is a dynamic process and a Work in Motion. The street took a note of the Vice President of India, M. Venkaiah Naidu's statement that farmers were critical for the well-being of the nation and they play a huge role in ensuring and maintaining home grown food security in India. Further, the Vice President said that collective actions were needed to correct development strategies to include preservation of nature. Meanwhile, the commerce ministry has launched a blockchain-based coffee e-marketplace to help farmers integrate with markets so that they can realize fair prices for the commodity. The blockchain will reduce the number of layers between coffee growers and buyers and help farmers double their income. Finally, the BSE Sensex rose 127.19 points or 0.33% to 38,672.91, while the CNX Nifty was up by 53.90 points or 0.47% to 11,623.90.

 

The US markets extended their gains for second straight session and ended the session significantly higher with gains of over half a percent each on Friday, amid optimism about the ongoing trade talks between the US and China. As per the report, the US Treasury Secretary Steven Mnuchin described the latest round of high-level US trade talks as constructive. Mnuchin also said he looks forward to welcoming China's Vice Premier Liu He to continue the important discussions in Washington next week. The world's two largest economies have imposed tariffs on billions of dollars' worth of one another's goods over the past year, battering financial markets and souring business and consumer sentiment. On the economic front, a report released by the Commerce Department showed that personal income in the US increased by slightly less than anticipated in the month of February. The report said personal income rose by 0.2% in February after edging down by 0.1% in January. Reflecting the continued impact of the recent government shutdown, the Commerce Department also released data on personal spending in January but not February. Personal spending inched up by 0.1% in January after falling by 0.6% in December, while investors had expected spending to increase by 0.3%. Meanwhile, a separate Commerce Department report showed a much bigger than expected increase in US new home sales in the month of February. The Commerce Department said new home sales surged up by 4.9% to an annual rate of 667,000 in February from the revised January rate of 636,000. With the increase in February, new home sales are at their high level since hitting a rate of 672,000 last March and up 0.6% compared to the same month a year ago. Dow Jones Industrial Average jumped 211.22 points or 0.82 percent to 25928.68, Nasdaq gained 60.15  points or 0.78 percent to 7729.32 and S&P 500 was up by 18.96 points or 0.67 percent to 2834.40.

 

Crude oil futures ended sharply higher on Friday as global supplies tighten due to US sanctions on Iran and Venezuela. Some support also came with report that the Organization of the Petroleum Exporting Countries (OPEC) led output cuts will outweighed concerns about global economic showdown. In early December last year, OPEC and allies pledged to withhold around 1.2 million barrels per day of supply in 2019 to prop up markets. It is expected that the group will continue with their output cuts through the rest of this year. Besides, a report from Baker Hughes has showed the US oil rigs count dropped by eight in the week ended March 29. Benchmark crude oil futures for May surged 84 cents or 1.4 percent to settle at $60.14 a barrel on the New York Mercantile Exchange. May Brent crude gained 57 cents or 0.8 percent to settle at $68.39 a barrel on London's Intercontinental Exchange.

 

Reversing previous session's losses, Indian rupee staged a smart recovery against dollar on Friday, following dollar selling from banks and exporters. Traders took encouragement with Commerce Minister Suresh Prabhu's statement that India's merchandise and services export would touch $540-billion mark this fiscal. He said exports are growing at a healthy pace and shipments of goods would reach over $330 billion. Similarly, services exports would touch about $200 billion. The weakening of the US dollar against some currencies overseas supported the local unit, however rising crude oil prices capped the gains. On the global front, euro on Friday was headed for its worst month since October, weighed down by fears about economic growth and cautious signals from the European Central Bank. Finally, the rupee ended at 69.14, 16 paise stronger from its previous close of 69.30 on Thursday.

                                                                                     

The FIIs as per Friday'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 10168.17 crore against gross selling of Rs 6646.69 crore, while in the debt segment, the gross purchase was of Rs 2504.20 crore with gross sales of Rs 3504.08 crore. Besides, in the hybrid segment, the gross buying was of Rs 2779.43 crore against gross selling of Rs 0.58 crore.

 

The US markets settled higher on Friday as optimism over progress on US-China trade talks overshadowed concerns about a slowing economic expansion. Asian markets are trading in green on Monday as positive Chinese factory gauges and signs of progress in Sino-US trade talks supported sentiment. Indian markets extended their northward journey for second straight day on Friday and ended the fiscal 2018-19 with modest gains amid heavy buying in auto and metal stocks coupled with strong foreign fund flows. Today, start of the new fiscal year (2019-20) is likely to be on optimistic note mirroring firm cues from Asian peers amid trade talks progress. On the domestic front, traders will be keenly eyeing the Reserve Bank of India's (RBI) first bi-monthly monetary policy statement for 2019-20 later in the week. There are expectations that the RBI may cut key lending rates by another 25 basis points on March 04, to boost economic activities amid fears of global slowdown impacting domestic growth prospects. Investors will also be looking ahead for the core sector data, PMI manufacturing and Services PMI data later in the week. Traders will be getting encouragement with the RBI's data showing that India's foreign exchange reserves continued to surge for the third week in a row, adding USD 1.029 billion at USD 406.667 billion in the week to March 22. However, there may be some cautiousness with the Controller General of Accounts (CGA) data stating that the country's fiscal deficit touched 134.2 per cent of the full-year revised budgeted estimate at the end of February 2019, mainly due to tepid growth in revenue collections. In absolute term, fiscal deficit for April-February 2018-19 was Rs 8.51 lakh crore as against the revised estimate (RE) of Rs 6.34 lakh crore for the entire year. Traders may also be concerned about the RBI's data that the country's current account deficit widened to 2.5 per cent of GDP in third quarter of the current fiscal from 2.1 per cent a year ago, primarily on account of a higher trade deficit. In absolute terms, the CAD, or the gap between inflow and outflow of foreign exchange in the current account, was $16.9 billion in the October-December 2018 period, up from $13.7 billion in the year-ago period. Meanwhile, the government has notified a new accounting standard Ind AS 116 that will bring in more transparency in recognition and disclosures about leases in companies' balance sheets. The Indian Accounting Standard (Ind AS) 116 is expected to have a significant impact on various industries, including aviation where airlines mostly operate planes on lease. Ind AS 116 -- to be effective from April 1 -- sets out the principles for recognition, presentation and disclosure of leases. There will be some buzz in the select banking sector stocks with report that Bank of Baroda is catapulting itself for a larger play in the system with the merger of Dena Bank and Vijaya Bank with itself from April 01. The government-forced merger, announced last in September, creates the third largest bank in the country after State Bank of India and HDFC Bank. Besides, the auto sector stocks will also be in action, reacting to their monthly sales numbers.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,623.90

11,585.92

11,646.12

BSE Sensex

38,672.91

38,563.55

38,765.41

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

NTPC

472.65

134.70

131.42

139.27

Yes Bank

358.56

275.10

271.93

279.88

SBI

303.95

320.75

317.00

323.75

ONGC

289.69

159.75

156.07

162.87

IOC

243.63

162.85

161.67

164.57

 

  • Tata Steel has acquired shares and convertible warrants of its subsidiary -- Tata Metaliks for about Rs 403.79 crore. 
  • L&T has unveiled a new strategic initiative, L&T-Nxt, to define the future of the organization from a fresh perspective. 
  • Bajaj Finance has raised funds aggregating to Rs 1537.30 crore through allotment of 15373 Secured redeemable NCDs of face value of Rs 10 lakh each on Private Placement basics. 
  • Vedanta Group has inaugurated the 500th Nand Ghar at Chaksu Block in Jaipur.
News Analysis