NSE Intra-day chart (03 September 2019)
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 04 September 2019
Benchmarks to see recovery with a positive start

 

Indian equity benchmarks witnessed sharp deep on Tuesday, on the back of weak economic data of core sector, GDP and manufacturing PMI. The start of the day was negative, as India's GDP growth slipped to an over six-year low of 5 per cent in the June quarter of 2019-20, hit by a sharp deceleration in manufacturing output and subdued farm sector activity. Adding more worries, the growth of eight core infrastructure industries slowed down to 2.1% in July 2019 as compared to 7.3% in the same month a year ago, on the back of contraction in coal, crude oil and natural gas production. Traders also remain worried, after the finance ministry indicated that Goods and Services Tax (GST) collections slipped below Rs 1 lakh crore mark to Rs 98,202 crore in the month of August 2019. Weakness persisted over the street during whole day, as India's manufacturing activity eased in the month of August to 15-month low, on the back of subdued sales to domestic and international clients. As per the survey report, the Nikkei India Manufacturing Purchasing Managers' Index (PMI) slipped to 51.4 in August from 52.5 in July, its lowest mark since May 2018. Domestic sentiments remained sluggish, amid market regulator SEBI's annual report stating that as macroeconomic headwinds weighed on investor sentiments through the year, foreign portfolio investors pulled out Rs 38,930 crore in 2018-19. Besides, the government's fiscal deficit touched Rs 5.47 lakh crore in the first four months (April-July) of the financial year 2019-20 (FY20), which is 77.8% of the Budget Estimate (BE). Finally, the BSE Sensex lost 769.88 points or 2.06% to 36,562.91, while the CNX Nifty was down by 225.35 points or 2.04% to 10,797.90.

 

The US markets ended lower on Tuesday on the back of new tariffs taking effect over the Labor Day weekend in the escalating US-China trade. The US imposed a 15 percent tariff on approximately $112 billion worth of Chinese imports, leading to Chinese retaliatory tariffs on billions of dollars worth of US goods. President Donald Trump repeated his claim in remarks that China is paying for the tariffs by devaluing their currency. Trump indicated US and Chinese officials still plan to meet for trade talks this month but argued the US cannot allow China to rip us off anymore as a country. Trump threatened to get tougher on China if he wins re-election and dismissed suggestions that he work with the European Union to go after Chinese trade practices. On the economic data front, a report released by the Commerce Department showed a slight uptick in US construction spending in the month of July following a smaller than previously estimated slump in June. The Commerce Department said construction spending inched up by 0.1 percent to an annual rate of $1.289 trillion in July after sliding by 0.7 percent to a revised June rate of $1.288 trillion. Street had expected construction spending to rise by 0.3 percent compared to the 1.3 percent nosedive originally reported for the previous month. The uptick in construction spending came as an increase in spending on public construction was partly offset by a dip in spending on private construction. Dow Jones Industrial Average fell 285.26 points or 1.08 percent to 26118.02, Nasdaq declined 88.72 points or 1.11 percent to 7874.16 and S&P 500 was down by 20.19 points or 0.69 percent to 2906.27.

 

Crude oil futures ended deeply in red with cut of over three percent on Tuesday amid signs of rising Organization of the Petroleum Exporting Countries (OPEC) and Russian oil output and on concerns about the outlook for near term energy. OPEC's output rose last month for the first month this year as higher supply from Iraq and Nigeria outweighed bigger-than-planned cutbacks by the Saudis caused by US sanctions on Iran. Russia's oil output in August was slightly higher than levels agreed under OPEC+ output deal. Besides, the US and China both raised tariffs on goods imported from the other, with duties levied by Beijing also hitting some US crude.  Benchmark crude oil futures for October dropped $1.88 or 3.4 percent to settle at $53.22 a barrel on the New York Mercantile Exchange. November Brent fell $1.21 or 2 percent to settle at $57.45 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended considerably weaker against the US dollar on Tuesday, amid strong dollar demand from banks and importers. Rupee sentiment remained fragile with data showing that India's GDP growth slipped to an over six-year low of 5 per cent in the June quarter of 2019-20, hit by a sharp deceleration in manufacturing output and subdued farm sector activity. Some pessimism also came as India's manufacturing activity eased in the month of August to 15-month low, on the back of subdued sales to domestic and international clients. As per the survey report, the Nikkei India Manufacturing Purchasing Managers' Index (PMI) slipped to 51.4 in August from 52.5 in July, its lowest mark since May 2018. Further, a sharp fall in domestic stock market along with a broad strengthening of the US dollar put pressure on the home currency. On the global front, British pound tumbled on Tuesday to the lowest level against the dollar in almost three years, as the UK faces a possible general election amid Brexit turmoil. Finally, the rupee ended at 72.39, 97 paise weaker from its previous close of 71.42 on Friday.

 

The FIIs as per Tuesday's data were net buyers in both equity and debt segments. In equity segment, the gross buying was of Rs 7524.41 crore against gross selling of Rs 6949.59 crore, while in the debt segment, the gross purchase was of Rs 1386.90 crore with gross sales of Rs 793.78 crore. Besides, in the hybrid segment, the gross buying was of Rs 12.41 crore against gross selling of Rs 9.32 crore.

 

The US markets ended lower on Tuesday after the US launched a new round of tariffs on $112 billion in Chinese goods, with China retaliating with new levies of its own. Asian markets are trading mostly in green in early deals on Wednesday despite poor US economic data stoked global recession fears and further soured investor sentiment already hurt by heightened trade war concern. Indian equity markets ended lower with cut of over two percent on Tuesday after the government data showed that the country's economic growth fell to over six-year low of 5 per cent in Q1FY20. Today, the start is likely to be in green tracking the regional peers. Traders will be getting some encouragement with a task force set up by India's central bank recommended a slew of measures for developing a secondary market for corporate loans, including easing of regulations to allow foreign portfolio investors (FPIs) to directly purchase distressed loans from banks. Meanwhile, in order to sort out the problem of delayed payments being faced by small and medium enterprises (SME), SME Minister Nitin Gadkari has called a meeting of heads of banks, finance ministry officials, and CEOs of various of central PSUs on September 5.  However, traders may remain concern with Care Ratings' report that the ongoing economic slowdown that India is witnessing may be because of weak investment growth. Two catalysts of investment - demand and availability of funds - have witnessed weak growth in the preceding months. Low capacity utilization in most of the industries left them with surplus capacity and this surplus has pulled down the need for any more expansion. It mentioned the problems in the financial sector involving NBFCs have affected the flow of funds and added to the worry. There will be some reaction in steel stocks on report that India Ratings and Research (Ind-Ra) has revised its outlook on the steel sector to 'stable-to-negative' from 'stable' for the remainder of this fiscal, owing to sluggish demand growth expectation. Ind-Ra has also revised downwards its FY20 steel demand growth expectation to around 4% from the previous forecast of 7%. There will be some buzz in the real estate stocks on report that the government may soon come out with a slew of measures to boost the real estate sector in the country. This would be a part of series of steps taken since August 23 to give a boost to the economy facing slowdown.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

10,797.90

10,724.57

10,919.37

BSE Sensex

36,562.91

36,289.82

37,012.19

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

1,963.27

58.75

56.83

61.48

Tata Motors

369.06

112.65

110.78

114.93

SBI

212.42

268.40

266.23

271.28

ICICI Bank

201.94

392.15

386.67

402.02

Indiabulls Housing Finance

193.36

454.55

438.18

467.73

 

  • M&M has signed a Share Subscription and Shareholder Agreement for subscribing upto 55% of the equity share capital of Meru Travel Solutions in tranches.
  •  Hero MotoCorp has reported sales of 543,406 units of motorcycles and scooters in the month of August 2019.
  •  Tata Motors has launched the Dark Edition of its flagship SUV -the Tata Harrier.
  •  Maruti Suzuki India has cut its production by 33.99 per cent in August, making it the seventh straight month that the country's largest car maker reduced its output.
News Analysis