Union Budget failed to cheer
Indian equity benchmarks on Friday, with both the larger peers, Sensex and
Nifty, closing lower by 395 and 135 points, respectively. Markets made a
positive start of the day, aided by Former Finance Minister Arun Jaitley's
statement that Indian economic growth graph was on an upward trajectory after
past policy uncertainties have been replaced by certainties. Some support also
came with reports that Ministry of Commerce and Industry has started an
exercise to review the current Foreign Trade Policy 2015-20, in order to boost
exports & domestic manufacturing and to reduce trade deficit. However, in
noon deals, markets turned negative to end in red terrain, after announcement
of Union Budget. Domestic sentiments got hampered after Moody's said there are
risks of India missing 3.3 per cent fiscal deficit target for the current
financial year if tax revenue falls short of projection. The Budget 2019-20
lowered fiscal deficit projection for the current financial year to 3.3 per
cent from 3.4 per cent targeted in the Interim Budget 2019-20 in February. The
street remained pessimistic, as the US dragged India to the WTO by filing a
complaint against New Delhi's move to increase customs duties on 28 American
goods, alleging the decision is inconsistent with the global trade norms.
Finally, the BSE Sensex lost 394.67 points or 0.99% to 39,513.39, while the CNX
Nifty was down by 135.60 points or 1.14% to 11,811.15.
The US markets ended slightly
lower on Friday, but recovered from day's low points, after the monthly
government payrolls report estimated the economy added a better-than-expected
224,000 jobs in June, reducing the chances of multiple Federal Reserve rate
cuts by the end of the year. The Labor Department report showed a substantial
reacceleration in the pace of US job growth in the month of June. The report
said employment surged up by 224,000 jobs in June after edging up 72,000 jobs
in May. Street had expected employment to increase by about 160,000 jobs. While
the data points to a rebound in the labor market following the weakness seen in
May, the report dampened investor hopes for a near-term interest rate cut by
the Federal Reserve. Despite the stronger than expected job growth, the report
said the unemployment rate inched up to 3.7 percent in June from 3.6 percent in
May. The unemployment rate had been expected to hold steady. The uptick in the
unemployment rate reflected an increase in the size of the labor force, which
expanded by 335,000 people compared to the 247,000-person jump in the household
survey measure of employment. Besides, Fed Chairman Jerome Powell sits down for
two days of Congressional testimony and the central bank releases the minutes
of its latest monetary policy meeting in the next week. Dow Jones Industrial
Average declined 43.88 points or 0.16 percent to 26922.12, Nasdaq fell 8.44
points or 0.10 percent to 8161.79 and S&P 500 was down by 5.41 points or
0.18 percent to 2990.41.
Crude oil futures ended higher on
Friday as tensions over Iran and an extension to output cuts by the
Organization of the Petroleum Exporting Countries (OPEC) and its allies
supported the prices. Iran threatened to capture a British ship after British
forces seized an Iranian tanker in Gibraltar over accusations the ship was
violating EU sanctions on Syria. Besides, the OPEC and allied producers agreed
to extend their production-cut agreement through March 2020. However, a jump in
the US dollar, following strong US jobs data, capped the gains in crude prices.
The US Labor Department said nonfarm employers added 224,000 jobs last month,
the most in five months. Benchmark crude oil futures for August rose 17 cents
or 0.3 percent to settle at $57.51 a barrel on the New York Mercantile Exchange.
September Brent gained 93 cents or 1.5 percent to settle at $64.23 a barrel on
London's Intercontinental Exchange.
Indian rupee ended marginally higher against dollar on
Friday, as bankers and exporters took to selling of American currency. Sentiments
were positive with Former Finance Minister Arun Jaitley's statement that Indian
economic growth graph was on an upward trajectory after past policy
uncertainties have been replaced by certainties. However, gains remain capped
as cautiousness remained in markets after Moody's said there are risks of India
missing 3.3 per cent fiscal deficit target for the current financial year if
tax revenue falls short of projection. The Budget 2019-20 lowered fiscal
deficit projection for the current financial year to 3.3 per cent from 3.4 per
cent targeted in the Interim Budget 2019-20 in February. On the global front,
the dollar was steady on Friday as traders held off on making big bets ahead of
the closely-watched US non-farm jobs report that could influence the course of
near-term Federal Reserve policy. Finally, the rupee ended at 68.42, 8 paise
stronger from its previous close of 68.50 on Thursday.
The
FIIs as per Friday's data were net buyers in both equity and debt segments. In
equity segment, the gross buying was of Rs 3645.23 crore against gross selling
of Rs 3089.27 crore, while in the debt segment, the gross purchase was of Rs
1023.94 crore with gross sales of Rs 720.42 crore. Besides, in the hybrid
segment, the gross buying was of Rs 5.16 crore against gross selling of Rs 0.78
crore.
The US markets ended marginally
in red on Friday following an unexpectedly strong US payrolls report that led
investors to reassess how dovish a stance the Federal Reserve may take at its
next meeting. Asian markets are trading lower on Monday after a strong jobs report
last Friday stateside moderated expectations that the US Federal Reserve could
soon be making a move on interest rates. Indian markets snapped four-day
gaining streak and ended lower on Friday mainly on the back of late hour
selloff as Budget proposals failed to cheer investors sentiment. Today, the
start of new week is likely to be pessimistic mirroring weakness in Asian
peers. Traders will be eyeing on the release of India's industrial production
(IIP) and Consumer price index (CPI) data for the month of May and June
respectively, on June 12. With the start of the first quarter earnings season
market participants will be watching some important results to be released
later in the week. IT bellwethers TCS and Infosys will report their quarterly
numbers on July 9 and June 12, respectively. There will be some cautiousness
with report that foreign institutional investors (FIIs) sold shares worth Rs 89
crore on a net basis in the cash market, while domestic institutional investors
(DIIs) bought shares worth Rs 276 crore. Also, Moody's said there are
risks of India missing 3.3 percent fiscal deficit target for the current
financial year if tax revenue falls short of the projection. The Budget 2019-20
lowered fiscal deficit projection for the current financial year to 3.3 percent
from 3.4 percent targeted in the Interim Budget 2019-20 in February. Meanwhile,
Cabinet Secretary P.K. Sinha has called meeting to discuss $5 trillion economy
vision. Sinha has asked various departments of Finance Minsitry for a meeting
to discuss the vision, policy intervention, investment and departmental
responsibilities towards achieving the target of a $5 trillion economy by 2025.
The vision to create India, a $5 trillion economy was announced by Finance
Minister Nirmala Sitharaman during her Union Budget 2019 spech on Friday. There
will be some buzz in the non-banking finance companies (NBFCs) with report that
quickly acting on a Budget proposal to offer credit guarantee to higher-rated
asset pools of financially sound non-banking finance companies, the Reserve
Bank on Friday allowed banks to offer additional liquidity against their excess
G-secs holdings, with immediate effect. The move will release an additional
liquidity worth Rs 1.34 trillion to banks, which can be used for on-lending to
shadow banking companies.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,811.15
|
11,745.45
|
11,929.30
|
BSE Sensex
|
39,513.39
|
39,292.38
|
39,883.41
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
2,205.47
|
88.15
|
84.75
|
94.20
|
ITC
|
370.47
|
279.45
|
271.02
|
284.87
|
SBIN
|
300.19
|
370.65
|
366.57
|
374.17
|
Indiabulls Housing
Finance
|
218.68
|
727.35
|
705.32
|
747.42
|
NTPC
|
214.59
|
136.50
|
133.33
|
141.73
|
Hero MotoCorp is working on several electric vehicle projects even as it has asked the government for a more cautious, clear and realistic roadmap towards the adoption of such technology in the country.
Maruti Suzuki India has reported 15.61% fall in its production to 111,917 vehicles in June 2019, as compared to 132,616 vehicles in June 2018.
Tata Motors owned JLR has unveiled major investment plans for the production of its new electric car models in the UK.
Yes Bank has acquired over 9 percent shares of Eveready by invoking pledged shares following loan default by a group company.