Friday turned
out to be a fabulous day of trade for Indian equity benchmarks with frontline
gauges ending near their all-time high levels, recapturing crucial 11,350
(Nifty) and 37,500 (Sensex) marks. After a gap-up opening, there appeared not
even an iota of profit booking in the session, with benchmarks fervently
gaining from strength to strength to end near intraday highs, as investors
continued hunt for fundamentally strong stocks. Sentiments remained up-beat
since beginning with traders taking support from a private report that India's
economic growth momentum is likely to pick up further in the April-June period
and the country is expected to clock GDP growth of 7.5% in this financial year.
Sentiments on the street remained positive with the India meteorological
department (IMD) stating that India is set to receive average rainfall during
the last two months of the crucial monsoon season that stretches between June
and September. It also added that the rainfall for the country as a whole
during the second half of the season is likely to be 95 percent of a long
period average. Furthermore, traders took note of a report which stated that
India plans to put off implementation of retaliatory import duties of $241
million against 29 products from the US by another month-and-a-half as its
attempt to avoid a tariff war with the US. Markets extended gains in second
half to end near intraday high levels with report that India's services sector
activity remained in the growth territory for the second consecutive month in
July, as business activity witnessed the strongest growth since October 2016
amid improved demand conditions. The seasonally adjusted Nikkei India Services
Business Activity Index rose from 52.6 in June to 54.2 in July. Traders
shrugged off International Monetary Fund's latest report where it stated that
real interest rates in India may drop by more than 150 basis points over the
next decade. Finally, the BSE Sensex soared 391.00 points or 1.05% to
37,556.16, while the CNX Nifty was up by 116.10 points or 1.03% to 11,360.80.
The US markets ended higher on
Friday, as positive earnings helped investors overlook heightened trade
tensions and weaker than expected July jobs growth. The Labor Department
released a report showing weaker than expected job growth in the month of July
due in part to a drop in government employment and the closing of Toys R Us
stores. The report said non-farm payroll employment climbed by 157,000 jobs in
July compared to street estimates for a jump of about 190,000 jobs. However,
the report also showed upward revisions to the increases in employment in May
and June, which surged up by 268,000 jobs and 248,000 jobs, respectively. With
the upward revisions, employment gains in May and June combined were 59,000
more than previously reported. The report also showed a modest decrease in the
unemployment rate, which edged down to 3.9 percent in July from 4.0 percent in
June. Meanwhile, the Labor Department said the annual rate of average hourly
employee earnings growth was unchanged from the previous month at 2.7 percent.
A separate report from the Commerce Department showed the US trade deficit
widened in the month of June, amid an increase in imports and a decrease in
exports. The report said the trade deficit widened to $46.3 billion in June
from a revised $43.2 billion in May. The deficit had been expected to widen to
$46.5 billion from the $43.1 billion originally reported for the previous
month. Dow Jones Industrial Average surged 136.42 points or 0.54 percent to
25462.58, the S&P 500 gained 13.13 points or 0.46 percent to 2,840.35 and
Nasdaq was up by 9.33 points or 0.12 percent to 7,812.02.
Crude oil
futures ended lower on Friday, as data continue to point to rising global
production. Oil prices came under pressure due to an uptick in production from
members of the Organization of the Petroleum Exporting Countries-led by Saudi
Arabia-and nonmember Russia. As per a report, Russian crude and condensate
production increased sharply in July by 150,000 barrels a day month-on-month,
while OPEC output rose by around 300,000 barrels a day last month. Oil prices
failed to get a boost after data from Baker Hughes on Friday showed a two-rig
decline in the number of rigs drilling for oil in the US, a key metric for
activity in the sector. Benchmark crude oil futures for September declined 47
cents or 0.7 percent to settle at $68.49 a barrel on the New York Mercantile
Exchange. October Brent crude fell 24 cents or 0.3 percent at $73.21 a barrel
on London's Intercontinental Exchange.
Reversing day's early losses,
Indian rupee ended marginally higher against dollar on Friday, owing to dollar
sale by exporters and banks. Sentiments turned optimistic with private report
that India's economic growth momentum is likely to pick up further in the
April-June period and the country is expected to clock GDP growth of 7.5% in
this financial year. Local currency also found some support with the India
meteorological department (IMD) stating that India is set to receive average
rainfall during the last two months of the crucial monsoon season that
stretches between June and September. It also added that the rainfall for the
country as a whole during the second half of the season is likely to be 95
percent of a long period average. Moreover, a spectacular rebound in domestic
equities too supported the rupee. On the flip side, pound fell on Friday as
Mark Carney warned the risk of no deal is uncomfortably high and revealed banks
had been stress tested for a major recession. Finally, the rupee ended at 68.61,
10 paise stronger from its previous close of 68.71 on Thursday.
The FIIs as per Friday'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 4441.16 crore against gross
selling of Rs 4993.70 crore, while in the debt segment, the gross purchase was
of Rs 1799.07 crore with gross sales of Rs 1034.54 crore. Besides, in the
hybrid segment, the gross buying was of Rs 1.80 crore against gross selling of
Rs 4.96 crore.
The US markets ended higher on
Friday, after a string of upbeat earnings, while traders digested the Labor
Department's data showing weaker than expected job growth in the month of July.
Asian markets were trading in green on Monday, after China's central bank took
steps to try to drag the yuan away from 14-month lows. The People's Bank of
China late on Friday raised the reserve requirement on foreign exchange forward
positions, making it more expensive to bet against the Chinese currency. Indian
equity markets ended higher on Friday, after two consecutive sessions of falls,
boosted the latest weather office forecast of average rainfall during the last
two months of the crucial monsoon season. Today, the start of the new week is
likely to be in green, following firm global cues. Some support may also come
with the Confederation of Indian Industry's (CII) statement that with the US
imposing an additional 25% duty on imports worth $34 billion from China,
certain Indian products may become more competitive. Traders will also be
reacting to a report that the Goods and Services Tax (GST) Council headed by
Finance Minister Piyush Goyal approved setting up of a group of ministers (GoM)
to tackle taxation related issues faced by micro, small and medium enterprises
(MSMEs). Traders may take note of Principal Economic Adviser to the Finance
Ministry, Sanjeev Sanyal's statement that GST slabs may come down to three in
addition to the exempted category, in the long-term. He also said the three
slabs could be a low of 5%, a central 15% (merging the 12% and 18% slabs that
exist now) and a top rate of 25%. There will be buzz in the banking sector
stocks with Reserve Bank of India's (RBI) report that bank credit grew by
12.44% to Rs 86131.64 billion in the fortnight to July 20. In the year-ago
period, bank credit had stood at Rs 76598.98 billion. The report showed that
during the reporting fortnight, deposits increased by 8.15% to Rs 114381.21
billion from Rs 105756.15 billion a year ago. There will be lots of important
earnings announcements too, to keep the markets in action.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,360.80
|
11,314.23
|
11,387.68
|
BSE Sensex
|
37,556.16
|
37,389.76
|
37,652.42
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Vedanta
|
182.74
|
222.40
|
216.93
|
225.78
|
SBI
|
182.54
|
299.25
|
295.85
|
301.30
|
Hindalco Industries
|
167.44
|
211.60
|
206.50
|
214.70
|
Axis Bank
|
159.54
|
574.75
|
554.15
|
586.95
|
ICICI Bank
|
144.79
|
305.00
|
299.45
|
308.65
|
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