NSE Intra-day chart (08 April 2019)
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Market Commentary 09 April 2019
Markets likely to make a cautious start amid mixed Asian cues

 

Indian equities ended Monday's trading session on negative note, with Sensex and Nifty losing over 160 and 60 points, respectively. The markets made a slightly higher start of the day, aided by 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. Adding some support, World Bank Chief Economist for the South Asia Region, Hans Timmer said that India's economic growth in recent years has been too much driven by domestic demand and its exports were about one third of its potential. However, key equity indices soon turned volatile to settle the session in red terrain, on the back of mixed cues from global markets. Domestic sentiments also got impacted with a ratings' latest report that Indian IT majors hit due to H1-B visa restrictions. It said that Restrictions on the H1-B visas by the US have compelled Indian tech companies to hire more locally and led to an escalation in employee costs. Market participants also remained on sidelines ahead March-quarter corporate earnings along with inflation data due to release on April 12. Investors took a note of Commerce and Industry Minister Suresh Prabhu's statement that there is a need to develop a proper matrix to understand changes in the Indian economy and job creation that is happening at a rapid pace. He also stated that the relation between employment generation to Gross Domestic Product (GDP) will always undergo a change depending upon the profile of the economy. Finally, the BSE Sensex slipped 161.70 points or 0.42% to 38,700.53, while the CNX Nifty was down by 61.45 points or 0.53% to 11,604.50.

 

The US markets ended mostly higher on Monday as investors geared up for a new earnings season. Financial giants JPMorgan Chase (JPM) and Wells Fargo (WFC) due to report their quarterly results before the start of trading on Friday. However, upside remain capped on the heels of recent strength, with the major averages pulling back following the notable upward move seen last week.  Lingering concerns about a slowdown in the pace of global economic growth inspired traders to cash in on the recent gains. Meanwhile, investors were also awaiting concrete progress on US-China trade negotiations which will be symbolically concluded with a meeting between President Donald Trump and his Chinese counterpart Xi Jinping. On the economic front, new orders for US manufactured goods fell by slightly less than expected in the month of February, according to a report released by the Commerce Department. The report said factory orders dropped by 0.5% in February after coming in virtually unchanged in January. The decrease in factory orders came as orders for durable goods tumbled by 1.6%, more than offsetting a 0.6% increase in orders for non-durable goods. Excluding a 4.5% nosedive in orders for transportation equipment, factory orders rose by 0.3% in February after edging down by 0.1% in January. The Commerce Department also said shipments of manufactured goods rose by 0.4% in February after slipping by 0.3% in the previous month. Nasdaq gained 15.19 points or 0.19 percent to 7953.88 and S&P 500 was up by 3.03 points or 0.10 percent to 2895.77, while Dow Jones Industrial Average declined 83.97 points or 0.32 percent to 26341.02.

 

Crude oil futures ended higher on Monday as fighting in Libya fed expectations for tighter global supplies. The US military said it pulled a small contingent of American forces from Libya as the country teetered on the brink of full-scale civil war, with fighting continuing around the capital Tripoli. Besides, signs that trade tensions are easing between the US and China also provided support to oil prices. Meanwhile, there are reports that China's state-owned energy giant Sinopec had resumed buying US oil, which was bullish for the oil market. Benchmark crude oil futures for May surged $1.32 or 2.1 percent to settle at $64.40 a barrel on the New York Mercantile Exchange. June Brent crude rose 76 cents or 1.1 percent to settle at $71.10 a barrel on London's Intercontinental Exchange.

 

Indian rupee continued its fall for the third day in a row against the US currency on Monday, on increased demand for the American unit from importers. The weakness of the rupee comes amid a rise in crude oil prices. Weakness in the domestic equity markets in the second half of the session also hurt the rupee. Market participants paid no heed towards 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. On the global front, euro edged higher from a one-month low hit last week as investors squared positions before a European Central Bank meeting this week where policymakers may strike a cautious note on the region's growth outlook. Finally, the rupee ended at 69.67, 44 paise weaker from its previous close of 69.23 on Friday.

 

The FIIs as per Monday's data were net buyers in equity segment, while they were net sellers in debt segment. In equity segment, the gross buying was of Rs 4286.49 crore against gross selling of Rs 3616.58 crore, while in the debt segment, the gross purchase was of Rs 1064.08 crore with gross sales of Rs 1502.45 crore. Besides in the hybrid segment, the gross buying was of Rs 2.63 crore against gross selling of Rs 1.85 crore.

 

The US markets settled mostly higher on Monday, as investors geared up for a new earnings season. Asian markets are trading mixed on Tuesday as investors watched developments such as the renewed conflict in key oil producer Libya. India markets ended Monday's choppy trading session lower, with cut of around half a percent, amid sharp rise in crude oil prices coupled with weak rupee. Today, the start of the session is likely to be cautious on mixed cues from Asian peers amid higher oil prices. However, traders may be getting encouragement with the World Bank's report stating that India's GDP growth is expected to accelerate moderately to 7.5 per cent in Fiscal Year 19-20, driven by continued investment strengthening, particularly private-improved export performance and resilient consumption. Data for the first three quarters suggest that growth has been broad-based. Industrial growth accelerated to 7.9 per cent, making up for a deceleration in services. Traders may take note of a report that the Reserve Bank of India (RBI) has come out with guidelines for banks to set up new currency chests, which include minimum area of 1,500 square feet for strong room. Besides, the new chests should have a processing capacity of 6.6 lakh pieces of banknotes per day. For those situated in the hilly/ inaccessible places, capacity of 2.1 lakh pieces of banknotes per day. Meanwhile, a report stated that the new Central government will undertake a thorough review of the public sector banks (PSBs) soon after taking office. As per the report, with the announcement of elections, it has been decided to hold the review meeting of banks only after a new government is in place. The review will study plans for the recapitalisation of banks besides taking note of their NPA (non-performing assets) recovery target as well as the next merger exercise. There will be some buzz in the auto industry stocks with report that auto industry has approached the government to cut Goods and Services Tax (GST) on passenger vehicles and two-wheelers from 28% to 18% to compensate the sector, which is expected to see price hike in range of 10-15% with the coming of new emission and safety regulations. Besides, Society of Indian Automobile Manufacturers' (SIAM) data showed that Indian automotive industry saw marginal increase of 5% at 26,267,783 units in Financial year 2018-2019. The second half of last fiscal witnessed subdued growth across all segments.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,604.50

11,532.30

11,693.50

BSE Sensex

38,700.53

38,467.24

38,987.53

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

262.52

260.05

256.17

266.02

Tata Motors

238.78

200.55

197.10

205.70

Indiabulls Housing Finance

219.16

859.35

836.12

899.57

SBI

173.94

312.80

309.52

317.67

NTPC

134.09

135.55

134.47

136.72

 

  • Sun Pharmaceutical Industries has launched INFUGEM in the US for intravenous use. 
  • Tata Motors will fulfill the order to supply 255 electric buses to various state transport undertakings by July this year. 
  • Kotak Mahindra Bank through its subsidiary Kotak Mahindra Prime has given Rs 500 crore to realty firm Gaurs for faster execution of Gaurs' two projects at Noida Extension, Uttar Pradesh. 
  • M&M has sold 1,62,000 pick up range vehicles in domestic market during the fiscal ended March this year, as against 1,49,121 vehicles in FY-2018, logging a 9% growth.
News Analysis