Firm cues from Asian counters
coupled with rising direct tax collection data kept Indian equity benchmarks
higher on Monday, with Sensex and Nifty closing the trading session above
35,800 and 10,750 levels, respectively. Revenue from direct tax grew 13.6% to
Rs 7.43 lakh crore in the first nine months of the current financial year
2018-19 (April-March). The government has met more than 64.7% of the total
budget estimate of direct taxes, for which the mop-up target is Rs 11.50 lakh
crore. After a firm start, the key
indices remained positive throughout the day, aided by the Federation of Indian
Chambers of Commerce and Industry (FICCI) president Sandip Somany's statement
that agricultural reforms, interest rate cut and credit availability to micro,
small and medium enterprises will drive India's economic growth to 7.5-7.6% in
2019-20. He added that the economy is on a good footing. Some support also came
with Reserve Bank of India (RBI) data showing that the country's foreign
exchange reserves increased by $116.4 million to $393.404 billion in the week
to December 28, on account of rise in foreign currency assets. In the previous
week, the reserves had increased by $167.2 million to $393.287 billion. The street
also got relief with reports that Commerce and industry minister Suresh Prabhu
will meet the banking and financial services secretaries next week to resolve
the huge decline in bank credit to exporters. During the trade, the market
participants were also seen taking note of Governor Shaktikanta Das' statement
that the Reserve Bank of India (RBI) will not like the banking system to be in
a situation of loose money. He further said that the RBI is also looking at new
governance reforms for state-owned banks but will not throttle their
functioning. However, the last leg sell-off along with weak cues from European
markets dragged the markets from their intraday high points. Domestic
sentiments got hit with a private report stating that India may have to forgo
as much as $1.97 trillion in gross domestic product (GDP) growth promised by
investment in intelligent technologies over the next decade if the country
fails to bridge the skill gap. Anxiety also persisted among the traders, as the
RBI warned that a sudden surge in crude prices can upset the country's key
macro-stability parameters, as it can sharply spike the current account deficit
(CAD), inflation and the fiscal numbers, whittling the benefits of higher
growth. Finally, the BSE Sensex gained 155.06 points or 0.43% to 35,850.16,
while the CNX Nifty was up by 44.45 points or 0.41% to 10,771.80.
The US markets ended higher on
Monday, building on Friday's powerful rally, as investors pored through the
latest US-China trade developments. Sentiment got boost as senior officials
from China unexpectedly showed up for negotiations between Beijing and their
counterparts in Washington in an effort to resolve longstanding trade
disagreements that have triggered uncertainty in global markets. Trade
officials from both countries are looking to hammer out an agreement over the
next 48 hours, however, there are doubts over how to best ensure that both
countries follow through on promises made during talks with Trump
administration worried about enforcement. Investors were also keeping an eye on
the partial government shutdown, now in its 17th day, with some government
employees expected to see their first missed paycheck as a result of an impasse
between President Donald Trump and Democratic lawmakers over funding for a
US-Mexico border wall. On the economic front, a report released by the
Institute for Supply Management (ISM) showed growth in US service sector
activity slowed by more than anticipated in the month of December. The ISM said
its non-manufacturing index dropped to 57.6 in December after inching up to
60.7 in November. The bigger than expected decrease by the headline index was
partly due to notably slower growth in business activity, with the business
activity index tumbling to 59.9 in December from 65.2 in November. Dow Jones
Industrial Average jumped 98.19 points or 0.42 percent to 23531.35, Nasdaq
surged 84.61 points or 1.26 percent to 6823.47 and S&P 500 was up by 17.75
points or 0.70 percent to 2549.69.
Crude oil futures ended higher on
Monday, buoyed by optimism tied to trade talks between the US and China as well
as output reductions by major oil producers. Sentiment got boost as senior
officials from China unexpectedly attended negotiations between Beijing and
their counterparts in Washington, in an effort to resolve longstanding trade disagreements
that have underpinned uncertainty in global markets. Meanwhile, Saudi Arabia
plans to cut its crude exports by 800,000 barrels a day from around 7.9 million
barrels a day in November, in a move aimed at lifting prices above $80 a
barrel. Benchmark crude oil futures for February gained 56 cents or 1.2 percent
to settle $48.52 a barrel on the New York Mercantile Exchange. March Brent
crude added 27 cents or 0.5 percent to settle at $57.33 a barrel on London's
Intercontinental Exchange.
Indian
rupee, after making a good start, gave away most of its gains but managed to
end marginally higher against dollar on Monday, due to sustained selling of the
US currency by exporters and banks. Local currency got some support with the
Federation of Indian Chambers of Commerce and Industry (FICCI) president Sandip
Somany's statement that agricultural reforms, interest rate cut and credit
availability to micro, small and medium enterprises will drive India's economic
growth to 7.5-7.6% in 2019-20. However, local unit cut most of the early gains,
as anxiety remained among the traders with the RBI warned that a sudden surge
in crude prices can upset the country's key macro-stability parameters, as it
can sharply spike the current account deficit (CAD), inflation and the fiscal
numbers, whittling the benefits of higher growth. On the global front, dollar
fell for a third consecutive day against its rivals on Monday on growing bets
the US central bank will press the pause button on its rate hike cycle in the
coming months. Finally, the rupee ended at 69.68, 4 paise stronger from its
previous close of 69.72 on Friday.
The FIIs as per Monday's data
were net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 3137.93 crore against gross selling of Rs 3547.50 crore, while
in the debt segment, the gross purchase was of Rs 1584.76 crore with gross
sales of Rs 2384.44 crore. Besides, in the hybrid segment, the gross buying was
of Rs 1.04 crore against gross selling of Rs 0.40 crore.
The US markets ended higher on
Monday as gains in the technology and consumer discretionary sectors helped
extend Friday's rally, with investors focused on the ongoing US-China trade
talks. Asian markets were trading mostly in green on Tuesday tracking overnight
rise on the Wall Street, where equities rallied on optimism fresh talks on
trade will be productive. Indian markets extended their gains for second
straight session on Monday, helped led by IT, realty and select bank stocks.
Sentiments also got boost on positive Asian cues and continued buying by
domestic investors. Today, the markets are likely to make cautious start amid
higher oil prices. Traders will be concerned with Crisil's report that India
Inc is set to report a decline in both revenue as well as profit growth numbers
in the December quarter. It said revenue growth will dip by up to 5 percentage
points on average to 12-13%. Traders will be reacting to report that Reserve
Bank of India (RBI) governor Shaktikanta Das struck a note of caution on farm
loan waivers, saying open-ended forgiveness would affect credit culture and the
behaviour of borrowers. He also said the central bank is open to taking more
steps to infuse liquidity if the need arises but it doesn't want too much cash
sloshing around in the banking system. Also, there will be some cautiousness
with a report that the growth in direct tax collection in the first nine months
of the year was marginally lower than the rate of 14.4% required to meet the
budget estimate of Rs 11.5 lakh crore for direct taxes in FY19. The net
(post-refunds) direct tax collection for April-December period this fiscal was
Rs 7.43 lakh crore, up 13.6% from the year-ago period. However, traders may be
getting some encouragement with the central statistics office's (CSO) latest
data showing that Indian economy is expected to grow at 7.2% in 2018-19, a tad
higher from 6.7% in the previous fiscal, mainly due to improvement in the
performance of agriculture and manufacturing sectors. Besides, describing the
7.2% GDP growth projection for 2018-19 as very healthy, Economic Affairs
Secretary Subhash Chandra Garg said India remains to be the fastest growing
economy in the world. Meanwhile, Reserve Bank Governor Shaktikanta Das said the
central bank will take steps if there is a shortage of liquidity in the economy
though the current cash needs are largely met. Pointing out that liquidity in
the system is regularly monitored, Das said the RBI will take steps whenever
there is any deficit.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,771.80
|
10,735.98
|
10,821.78
|
BSE Sensex
|
35,850.16
|
35,747.28
|
36,015.00
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
405.15
|
187.15
|
183.83
|
192.43
|
Tata Motors
|
214.38
|
175.35
|
172.97
|
177.97
|
SBI
|
145.79
|
296.30
|
293.83
|
300.13
|
ICICI Bank
|
127.20
|
367.70
|
365.83
|
370.28
|
ONGC
|
127.01
|
147.85
|
146.27
|
148.92
|
ONGC will be investing up to Rs 6,000 crore in drilling 200 wells across fields of Assam under ONGC Assam Asset in Sivasagar and Charaideo districts.
Indiabulls Housing Finance has reported over Rs 17,700 crore net-worth as at December 31, 2018, representing net gearing of less than 5 times.
Indian Oil Corporation is planning to raise funds up to $1.5 billion from international bond sale.
Tata Motors' wholly owned subsidiary - JLR has reported 14,079 units US sales for the month of December 2018, a 24% increase from 11,394 units in December 2017.