NSE Intra-day chart (05 April 2019)
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Market Commentary 08 April 2019
Benchmarks likely to make a cautious start

 

Late hour flourish helped the equity markets to end the last trading day of the week on higher note, with Sensex and Nifty reclaiming their crucial psychological levels of 38,800 and 11,650, respectively. Markets made a positive start of the day, aided by Finance Secretary Subhash Chandra Garg's statement the government is close to meet fiscal deficit target of 3.4% for 2018-19. The government in the interim Budget in February revised upward the fiscal deficit target to 3.4% from 3.3% of Gross Domestic Product (GDP) estimated earlier for the financial year ended March 31. Some optimism also came after the Central Board of Direct Taxes (CBDT) said that it added 1.07 crore new taxpayers in financial year 2018 (FY18) as compared to 86.16 lakh new ITR filers added during financial year 2017 (FY17), showing the positive impact of demonetization. CBDT stated that demonetization had a phenomenal positive impact on the widening of tax base and direct tax collections. Key indices added gains in last leg of the trade, tracking firm European markets. Trading sentiments got boost as Finance Minister Arun Jaitley said that India's growth has stabilised between 7-7.5% and irrespective of global trends, domestic consumption is going to increase. He also said that if India can maintain its position as the fastest growing major economy in the world for the next 10 years, it could become a reasonably middle-income economy, reducing poverty to negligible levels. Adding some comfort among investors, Commerce and Industry Minister Suresh Prabhu said that the proposed new industrial policy has been finalised and the new government very soon will announce that.  The market participants paid no heed towards reports showing that Fitch Ratings kept India's sovereign rating unchanged at the lowest investment grade of BBB- with a stable outlook. This is the 13th year in a row that Fitch has rated India at BBB-. Finally, the BSE Sensex gained 177.51 points or 0.46% to 38,862.23, while the CNX Nifty was up by 67.95 points or 0.59% to 11,665.95.

 

The US markets settled higher with notable gains on Friday as traders remain energized with better-than-expected job growth in the month of March and progress on the US-China trade front. The Labor Department said non-farm payroll employment jumped by 196,000 jobs in March after edging up by a revised 33,000 jobs in February. Street had expected employment to increase by about 180,000 jobs compared to the uptick of 20,000 jobs originally reported for the previous month. The US unemployment rate remained at 3.8%. However, wage growth expanded 3.2%, below an expected gain of 3.4%. Meanwhile, energy stocks gained, benefiting from a notable increase by the price of crude oil. Housing and utilities stocks also showed strong moves to the upside in the market, while some weakness emerged among tobacco stocks. Besides, continued indications of progress in US-China trade talks after the latest round of high-level negotiations adding optimism among investors. Chinese Vice Premier Liu He said the two sides have conducted fruitful consultations in the past two days, especially on important issues such as the text of economic and trade agreements. Inventors will be looking ahead to the reports on factory orders, consumer and producer prices, and import and export prices are likely to attract attention next week along with the release of the minutes of the latest Federal Reserve meeting. Dow Jones Industrial Average jumped 40.36 points or 0.15 percent to 26424.99, Nasdaq surged 46.91 points or 0.59 percent to 7938.69 and S&P 500 was up by 13.35 points or 0.46 percent to 2892.74.

 

Crude oil futures ended higher on Friday, supported by the Organization of the Petroleum Exporting Countries (OPEC)-led supply cuts and amid easing concerns about growth in the world's largest economy aided by upbeat US jobs data. Rising optimism about US-China trade talks also supported the oil prices. Besides, Brent crude settled above the psychologically important $70-a-barrel threshold as traders remained focused on signs of tightening global supplies. Meanwhile, a private data showed rise in US crude inventories last week and a report from Baker Hughes said that the number of US oil rigs rose this week after declining in the previous six weeks. Benchmark crude oil futures for May surged 98 cents or 1.6 percent to settle at $63.08 a barrel on the New York Mercantile Exchange. June Brent crude rose 94 cents or 1.4 percent to settle at $70.34 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended marginally weaker against the American currency on Friday, due to fresh dollar demand from banks and importers. Sentiments remained down-beat with Fitch Ratings kept India's sovereign rating unchanged at the lowest investment grade of BBB- with a stable outlook. This is the 13th year in a row that Fitch has rated India at BBB-. However, losses remained capped as traders found some support with Finance Minister Arun Jaitley's statement that India's growth has stabilised between 7-7.5 per cent and irrespective of global trends, domestic consumption is going to increase. He also said that if India can maintain its position as the fastest growing major economy in the world for the next 10 years, it could become a reasonably middle-income economy, reducing poverty to negligible levels. On the global front, optimism for a US-China trade deal helped the dollar hit a three-week high against the yen on Friday, although moves in broader foreign exchange markets were limited as investors saw a lot of headlines but no conclusions out of the trade talks. Finally, the rupee ended at 69.23, 6 paise weaker from its previous close of 69.17 on Thursday.

 

The FIIs as per Friday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 5688.89 crore against gross selling of Rs 5893.31 crore, while in the debt segment, the gross purchase was of Rs 1646.48 crore with gross sales of Rs 3087.92 crore. Besides in the hybrid segment, the gross buying was of Rs 17.57 crore against gross selling of Rs 11.59 crore.

 

The US markets ended higher on Friday on solid US job data report and optimism over US-China trade talks. Asian markets are trading mostly in green on Monday on the back of better-than-expected jobs data in the US and reports of progress in trade negotiations between Washington and Beijing. Indian markets recovered from two consecutive sessions of losses and ended higher on Friday supported by upbeat global cues amid hopes of an end to the battle between US and China. Today, the markets are likely to make a cautious start of the new week as investors awaited March-quarter corporate earnings. IT major TCS and Infosys will kick off the March quarter earnings season on April 12 as well as the first phase of general elections will take place later this week. Besides, Industrial Production data for February and CPI Inflation for March will be released on April 12. However, positive global cues are likely to support market sentiment. Traders may take some support with Finance Minister Arun Jaitley's statement that India is expected to become the third largest economy in the world by 2030 with GDP touching $10 trillion, helped by consumption and investment growth. Currently, the size of the Indian economy is about $2.9 trillion. Talking about avenues of growth for the next 20 years, the finance minister listed infrastructure creation, rural expansion and gender parity, among others. Some support may also come with report that overseas investors have pumped in a net sum of Rs 8,634 crore into the Indian capital markets in the first five trading sessions of April, mainly due to positive market sentiment. Meanwhile, Commerce and Industry Minister Suresh Prabhu has underlined a need to develop a proper matrix to understand changes in the Indian economy and job creation that is happening at a rapid pace. There will be some buzz in the automobile industry stocks with CRISIL's report that electric two-wheeler segment is expected to face a rough road in the initial phase of the FAME II Scheme with the exclusion of lead battery-powered such vehicles. There will be some reaction in aviation industry stocks with Civil Aviation Minister Suresh Prabhu's statement that aviation turbine fuel (ATF) should be brought under the Goods and Services Tax (GST) regime as it will ensure a level playing field for the domestic airline industry. He said input costs should be competitive for any sector and the ministry has been of the strong view that the fuel should be brought under the GST regime.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,665.95

11,620.42

11,700.57

BSE Sensex

38,862.23

38,722.65

38,980.21

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Motors

320.57

205.15

201.80

209.00

Yes Bank

283.20

266.85

262.73

272.48

SBI

231.17

317.05

313.47

322.17

Indiabulls Housing Finance

138.62

903.05

892.37

916.57

ICICI Bank

108.54

390.55

386.60

393.50

 

  • Britannia Industries has raised funds through issuance of Commercial Papers for an aggregate amount of Rs 500 crore dated April 04, 2019, with tenure upto 260 days. 
  • Cipla has received EIR from USFDA for Goa manufacturing facility. 
  • M&M has crossed cumulative sales milestone of three million tractors, having rolled out its first tractor way back in 1963. 
  • TCS has launched the official app for the 2019 Virgin Money London Marathon, with several key new features.
News Analysis