Indian equity benchmarks managed
to settle in positive terrain on Wednesday's highly volatile session. After a
cautious start, indices altered between green & red terrain, amid 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.
Adding more worries on the street, India's services sector activity expanded at
a slower pace in the month of August, impacted by slower rise in new business
inflows. As per the survey report, the seasonally adjusted Nikkei Services
Business Activity Index eased to 52.4 in August from 53.8 in July. However, markets staged recovery in second
half of the session, on the back of firm cues from global markets. Traders took
support with reports that 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. Further, market participants also got comfort, as
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 to sort
out the problem of delayed payments being faced by small and medium
enterprises. Finally, the BSE Sensex gained 161.83 points or 0.44% to
36,724.74, while the CNX Nifty was up by 46.75 points or 0.43% to 10,844.65.
The US markets ended higher on
Wednesday as a survey on business conditions in the Federal Reserve's key
districts showed that economic activity in nonfinancial service sectors was
steady or improving even while manufacturing and agriculture were unsurprising
weak spots. The strength on markets also came in amid easing tensions in Hong
Kong. Hong Kong's chief executive withdrew a controversial extradition bill
that sparked months of protests and as fears that the United Kingdom would
leave the European Union without an exit agreement faded, after Parliament
voted to require Prime Minister Boris Johnson to ask the European Union to
extend the deadline for leaving beyond October 31 if a deal is not reached by
then. On the economic data front, reflecting an increase in exports and a
modest decrease in imports, the Commerce Department released a report showing
the US trade deficit narrowed in the month of July. The Commerce Department
said the trade deficit narrowed to $54.0 billion in July from a revised $55.5
billion in June. Street had expected the deficit to narrow to $53.5 billion
from the $55.2 billion originally reported for the previous month. The narrower
trade deficit came as the value of exports climbed by 0.6 percent to $207.4
billion in July after plunging by 1.9 percent to $206.2 billion in June. A jump
in drug exports contributed to the rebound along with increases in exports of
capital goods and automotive vehicles, parts, and engines. On the other hand, the
report said the value of imports edged down by 0.1 percent to $261.4 billion in
July after tumbling by 1.7 percent to $261.8 billion in the previous month.
Crude oil futures ended higher
with gains of over four percent on Wednesday, as investors focused on
geopolitical optimism and forecasts for shrinking US supplies ahead of
closely-followed weekly inventory report. The Energy Information Administration
(EIA) is expected to report a decline of 3 million barrels in domestic crude
supplies for the week ended August 30. Besides, Data showing an acceleration in
China's service sector growth in August aided sentiment. The private survey
report said activity in China's services sector expanded at the fastest pace in
three months in August. The Services Purchasing Managers' Index for the month
of August came with reading of 52.1, up from 51.6 in July, despite broader
economic headwinds. Benchmark crude oil futures for October surged $2.32 or 4.3
percent to settle at $56.26 a barrel on the New York Mercantile Exchange.
November Brent rose $2.44 or 4.2 percent to settle at $60.70 a barrel on
London's Intercontinental Exchange.
After
yesterday's steep losses, Indian rupee gained ground against dollar and ended
higher on Wednesday, on persistent selling of the American currency by
exporters. Traders took support with reports that 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 bank. Also, last hour
recovery in local equity markets and dollar losing sheen against some other
currencies overseas gave the uptrend some momentum. Traders overlooked report
that India's services sector activity expanded at a slower pace in the month of
August, impacted by slower rise in new business inflows. As per the survey
report, the seasonally adjusted Nikkei Services Business Activity Index eased
to 52.4 in August from 53.8 in July. On the global front, dollar extended its
fall on Wednesday following disappointing manufacturing data, helping the euro
to recover from more than two-year lows. Finally, the rupee ended at 72.12, 27
paise stronger from its previous close of 72.39 on Tuesday.
The
FIIs as per Wednesday's data were net sellers in equity segment, while they
were net buyers in debt segment. In equity segment, the gross buying was of Rs
3202.94 crore against gross selling of Rs 6365.92 crore, while in the debt
segment, the gross purchase was of Rs 2531.23 crore with gross sales of Rs
691.52 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.02
crore against gross selling of Rs 11.12 crore.
The US markets ended higher on
Wednesday following the release of the Federal Reserve's Beige Book, which said
the US economy expanded at a modest pace through the end of August. Asian
markets are trading in green in early deals on Thursday as apparent progress in
the political crises in Britain and Hong Kong gave investor confidence a shot
in the arm, with easing fears of a hard Brexit lifting the battered pound. Indian
equity markets witnessed a volatile session on Wednesday but managed to end
positive, lifted by financials, Telecom and metal stocks. Today, the start is likely to be good on
positive global cues and traders will be getting encouragement with report that
foreign direct investment (FDI) equity inflows rose 28% in the first quarter of
2019-20 to $16.3 billion from $12.7 billion in the year-ago period. Singapore
continued to be the top source of FDI at $5.3 billion, followed by Mauritius
($4.6 billion). There will also be some support on report that a top advisory
body on external trade will meet next week to discuss issues related to export
promotion, domestic manufacturing and competitiveness in the wake of a fall in
exports of traditional, employment-generating sectors such as gems and
jewellery, leather, handloom and cotton yarn and fabrics. The commerce and industry minister chaired
Board of Trade (BoT), which advises the government on foreign trade policy (FTP),
will meet on September 12. It last met in June when it was merged with the
Council of Trade Development and Promotion to streamline the consultation
process with all stakeholders for promoting trade. However, there will be some
cautiousness latter in the day on report that domestic rating agency Crisil has
slashed its GDP forecast for FY20 to 6.3% from 6.9% earlier. The downward
review comes days after GDP growth slowed down to a 25-quarter low of 5 percent
in the June quarter which significantly is even lower than Pakistans 5.4%
growth and is due to the slump in private consumption and a near stalling of
manufacturing activities. There will be some reaction in Automobile related
stocks on report that Auto industry body Society of Indian Automobile
Manufacturers (SIAM) said the industry, which has been reeling under a
prolonged slump, is staring at a difficult road ahead for the rest of the year
due to transition to BS-VI emission norm from BS-VI by April 2020. It said on
an average each vehicle manufacturer is spending close to Rs 1,000 crore to
upgrade all of their model line-up to meet the new emission norm within a short
span. The banking stocks will keep buzzing on report that the Reserve Bank of
India (RBI) has made it mandatory for banks to link all new floating-rate loans
for housing, auto and MSMEs to external benchmark like repo from October 1, a
move aimed at ensuring faster transmission of policy rate cuts to borrowers.
There will also some buzz in travel and tourism stocks with World Economic
Forum (WEF) in its latest report stating that India has moved up six places to
rank 34th on world travel and tourism competitiveness index, driven by rich
natural and cultural resources and strong price competitiveness. India's
ranking improved from 40th to 34th, the greatest improvement over 2017 among
the top 25 per cent of all countries ranked in the report.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,844.65
|
10,774.42
|
10,886.82
|
BSE Sensex
|
36,724.74
|
36,497.42
|
36,864.19
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in
Lacs)
|
Yes Bank
|
1,437.42
|
59.45
|
57.70
|
60.75
|
Tata Motors
|
763.17
|
109.50
|
106.00
|
113.00
|
Sun Pharmaceutical
|
339.52
|
426.45
|
408.68
|
436.83
|
SBI
|
273.10
|
275.10
|
269.62
|
278.22
|
ICICI Bank
|
186.15
|
397.50
|
391.72
|
401.47
|
SBI has inked pact with ESIC for direct transfer of benefits electronically into bank accounts of all stakeholders.
ICICI Bank has set the target for retail loan disbursement at Rs 4,900 crore in Uttar Pradesh for 2019-20, marking a growth rate of 23 per cent over the last year.
NTPC has commissioned along with IOC its first EV charging station at an IOC petrol pump in Greater Noida, Uttar Pradesh.
HDFC Bank has launched a 3rd Kaushal College in Gumla in the state of Jharkhand under Parivartan.