NSE Intra-day chart (09 January 2019)
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Market Commentary 10 January 2019
Markets to open slightly in green on Thursday

 

Last hour rally helped Indian equity benchmarks to close Wednesday's trading session with strong gains. After a firm start, the key indices remained upbeat for the most part of the session, as the World Bank forecasted that Indian economy is expected to grow at 7.3% in the current fiscal year 2018-19 (FY19) and will grow further at average 7.5% in the following two years. It also said that India registered quite a bit of pick up in doing business ranking. Adding some optimism, the finance ministry said that the recovery of evaded indirect taxes shot up in 2018-19, after a low in 2017-18, the year when the goods and services tax (GST) was implemented. Recovery as a percentage of the evaded taxes dropped from 26% in 2016-17 to 14% in 2017-18. Then, it went up to 29% in 2018-19 (April to December period). Some support also came with a report stating that the central government has released Rs 48,202 crore as GST compensation to states during April-November 2018, higher than the Rs 48,178 crore paid in the previous financial year. However, in last hour of trade markets witnessed volatility with key gauges reversing all of their gains to enter into red terrain for brief period of time, as sentiments got hurt with a private reports stating that the battered Indian rupee will take another bruising this year, despite a recent revival, weighed down by uncertainty around national elections in May and an expected economic slowdown.  Some anxiety came on the street, with the World Bank's report showing that the growth of the global economy is expected to slow to 2.9 percent in 2019 compared with 3 percent in 2018, citing elevated trade tensions and international trade moderation. But soon, the markets regained momentum to end the session near day's high points, tracking firm European markets. The rally also buoyed with the World Economic Forum report stating that India is poised to become the third-largest consumer market behind only the US and China; and consumer spending in India is expected to grow from $1.5 trillion at present to nearly $6 trillion by 2030. Finally, the BSE Sensex gained 231.98 points or 0.64% to 36,212.91, while the CNX Nifty was up by 53.00 points or 0.49% to 10,855.15.

 

Magnifying their gains for fourth straight day, the US markets ended higher on Wednesday on the back of optimism about a potential trade deal between the US and China after talks between US and Chinese officials were extended to a third day. Officials have not made public comments about the outcome of the talks, although traders remain hopeful the US and China will reach a long-term trade agreement before a March 01 deadline. Markets also remained positive after the minutes of the latest Federal Reserve meeting confirmed Fed Chairman Jerome Powell's recent remarks suggesting the central bank will take a patient approach to further interest rate increases. The minutes of the Fed's December meeting said participants saw the appropriate extent and timing of future rate hikes as less clear than earlier. The Fed decided to raise rates by a quarter point at the meeting, but the minutes suggest volatility in financial markets and increased concerns about global economic growth have clouded the outlook for rates. The minutes said against this backdrop, many participants expressed the view that, especially in an environment of muted inflation pressures, the Committee could afford to be patient about further policy firming. Dow Jones Industrial Average rose 91.67 points or 0.39 percent to 23879.12, Nasdaq gained 60.08 points or 0.87 percent to 6957.08 and S&P 500 was up by 10.55 points or 0.41 percent to 2584.96.

 

Extending their gains for eighth straight session, Crude oil futures ended higher on Wednesday, on continued optimism over US-China trade talks, a December output drop from major producers, and a weekly decline in domestic inventories.  The Energy Information Administration (EIA) reported that domestic crude supplies fell by 1.7 million barrels for the week ended January 4.  Meanwhile, Saudi Arabia's energy minister Khalid al-Falih vowed to stabilise the oil market and said the agreement between the Organization of the Petroleum Exporting Countries (OPEC) and its allies to cut production is already starting to show results.  Benchmark crude oil futures for February surged $2.58 or 5.2 percent to settle $52.36 a barrel on the New York Mercantile Exchange. March Brent crude rose $2.72 or 4.6 percent to settle at $61.44 a barrel on London's Intercontinental Exchange.

 

Indian rupee closed weaker for a second straight session on Wednesday, hurt by fresh demand for the American currency from importers. Traders remained cautious with a private reports stating that the battered Indian rupee will take another bruising this year, despite a recent revival, weighed down by uncertainty around national elections in May and an expected economic slowdown. Traders failed to get relief with the World Bank forecasting that Indian economy is expected to grow at 7.3% in the current fiscal year 2018-19 (FY19) and will grow further at average 7.5% in the following two years. It also said that India registered quite a bit of pick up in doing business ranking. On the global front, US dollar recovered some losses against a basket of major currencies after the US and China decided to extend the talks for another day. Finally, the rupee ended at 70.46, 25 paise weaker from its previous close of 70.21 on Tuesday.

 

The FIIs as per Wednesday's data were net sellers in equity and debt segments both In equity segment, the gross buying was of Rs 3430.34 crore against gross selling of Rs 4147.41 crore, while in the debt segment, the gross purchase was of Rs 762.80 crore with gross sales of Rs 1566.75 crore. Besides, in the hybrid segment, there was no buying and selling.

 

The US markets ended higher for fourth straight session on Wednesday after the minutes of the latest Federal Reserve meeting confirmed Fed Chairman Jerome Powell's recent remarks suggesting the central bank will take a patient approach to further interest rate increases. Asian markets were trading mostly in red on Thursday after Chinese inflation data came in below expectations. Indian markets extended their gains for fourth straight session and ended higher on Wednesday tracking strength in global peers on rising hopes that the US and China would strike a deal to end their trade tiff. Today, the start is likely to be marginally in green amid positive trade on Wall Street. Traders will be looking for third-quarter corporate earnings for the financial year 2018-2019, with Tata Consultancy services (TCS) reporting quarterly results today. The company is expected to continue to deliver healthy earnings in October-December quarter though furloughs could impact some growth. Traders will be getting encouragement with PwC-Ficci survey showing that India Inc expects over seven percent growth in the next 12 months on the back of a number of policy initiatives taken by the government. As per the report, The Indian economy is likely to grow at an average rate of 7% or more in the coming year. It added that India Inc is upbeat about the future of the economy as growth is to be driven by strong domestic demand and an increased focus on export markets. Also, there will be some support with Finance Minister Arun Jaitley's statement that the government's electric mobility programme will promote manufacturing and job creation, besides reducing pollution. Besides, a private report stated that India is likely to become the world's second-largest economy by 2030, next only to China and overtaking the US. Traders may take note of a report that NITI Aayog Vice Chairman Rajiv Kumar made a case for adopting a middle path with regard to data protection, saying data nationalism may be the anti-thesis of global growth. Meanwhile, Commerce minister Suresh Prabhu urged the finance ministry to make the process of refund of GST input tax credit online. However, there may be some cautiousness in the markets amid weak Asian peers as the markets awaited more clarity on US-China trade talks that raised hopes of a deal to avert an all-out trade war.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

10,855.15

10,779.57

10,900.57

BSE Sensex

36,212.91

35,967.29

36,354.54

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

636.73

186.45

180.65

193.10

ICICI Bank

217.30

382.25

377.38

385.33

SBI

211.10

305.30

301.67

308.02

Infosys

181.30

676.10

663.47

689.27

Axis Bank

180.03

670.10

657.62

677.32

 

  • ITC has inked pact with the BRTC in Maharashtra for the supply of agarbattis marketed under its Mangaldeep brand. 
  • Maruti Suzuki India has reported 12% fall in its production to 107,478 vehicles in December 2018, as compared to 122,096 vehicles in December 2017. 
  • IndusInd Bank has reported 5.21% rise in its net profit at Rs 985.03 crore for Q3FY19 as compared to Rs 936.25 crore for Q3FY18. 
  • Coal India's subsidiary -- Mahanadi Coalfields incurred losses of Rs 60 crore on the first day of the two-day strike.


News Analysis