NSE Intra-day chart (09 April 2019)
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FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
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Market Commentary 10 April 2019
Benchmarks to make negative start on growth concerns

 

Last hour buying lifted Indian equity indices higher on Tuesday, with Sensex and Nifty closing above their crucial psychological levels of 38,900 and 11,650, respectively. After a cautious start, the markets remained volatile for most part of the session, as Industry body Internet and Mobile Association of India (IAMAI) said the draft e-commerce policy may be inimical to the government's efforts of building a trillion-dollar digital economy by 2022, and is likely to severely bring down FDI flows in the sector. The association was also of the view that the process of making the policy itself was less than inclusive and open as compared to recent national-level policies like the National Digital Communications Policy 2018. Traders were also pessimistic with a report that Indian economy may be moving towards a slowdown as the country has off-late witnessed a drop in several key economic indicators. After a fall in auto sales, a shortfall in collection of direct taxes among others, now household savings in the country too have declined. However, in the last leg of the trade, key indices gained traction to settle near their intraday high points, tracking firm European markets. The market participants took encouragement with the World Bank's latest report stating said that India's Gross Domestic Product (GDP) growth is expected to accelerate moderately to 7.5% in the fiscal year 2019-20 (FY20), supported by continued investment strengthening, particularly private-improved export performance and resilient consumption. It added that the real GDP growth is estimated at 7.2% in 2018-19. Its data for the first three quarters suggested that growth has been broad-based. Industrial growth accelerated to 7.9%, making up for a deceleration in services. Meanwhile, agriculture growth was robust at 4%. Adding enthusiasm among investors, Prime Minister Narendra Modi sought another term to set on track the transformation of the country as a developed nation by 2047 when India completes 100 years of Independence. Finally, the BSE Sensex gained 238.69 points or 0.62% to 38,939.22, while the CNX Nifty was up by 67.45 points or 0.58% to 11,671.95.

 

The US Markets ended in red, with losses of over half a percent, on Tuesday on fears over escalation of trade tensions with the European Union and a weaker global outlook from the International Monetary Fund (IMF). The office of the US Trade Representative threatened to levy tariffs on many European goods late Monday. The threat is a retaliation against European companies' subsidies for aircraft manufacturer if the US follows through, the proposed tariffs would affect about $11 billion in imports to the US, including helicopters, bicycles, cheese and wine. The US-EU tensions comes with the administration reportedly close to resolving a yearlong spat with China, which has roiled markets amid fears the clash between the world's largest economies could disrupt global economic growth. Meanwhile, the IMF has slashed the global growth forecast for this year, citing the trade tensions, weaker business confidence, tighter financial conditions and higher policy uncertainty. The Washington-based global lender cut the growth forecast for this year to 3.3% in its latest World Economic Outlook, or WEO, which is released twice a year. In a January update to the WEO, the IMF had predicted 3.5%, which was lower than 3.7% seen in the October report. The growth momentum is expected to gain steam in the second half of this year. Growth for 2020 was projected at 3.6%, which was unchanged from the January prediction. Growth in the emerging market and developing economies is projected to rise to 4.8% next year from 4.4% this year. Dow Jones Industrial Average dropped 190.44 points or 0.72 percent to 26150.58, Nasdaq declined 44.61 points or 0.56 percent to 7909.28 and S&P 500 was down by 17.57 points or 0.61 percent to 2878.20.

 

Crude oil futures settled lower with losses of over half a percent on Tuesday on account of expectations that US crude supplies climbed for a third straight week, as well as signs that Russia may not see a need to extend production cuts past June. US crude inventories likely rose by 2.8 million barrels for the week ended April 5. Meanwhile, in a monthly report, the Energy Information Administration (EIA) did lift its forecast for 2019 US crude production to 12.39 million barrels a day, up 0.7% from the March forecast. It also raised its 2020 output view by 0.5% to 13.1 million barrels a day. For 2019, the EIA lifted its West Texas Intermediate crude price outlook by 4.8% to $58.80 a barrel and its Brent view by 3.8% to $65.15. Benchmark crude oil futures for May declined 42 cents or 0.7 percent to settle at $63.98 a barrel on the New York Mercantile Exchange. June Brent crude dropped 49 cents or 0.7 percent to settle at $70.61 a barrel on London's Intercontinental Exchange.

 

Reversing its three-session fall, Indian rupee bounced back to end higher against the US currency on Tuesday, on persistent selling of the American currency by exporters. Sentiments turned optimistic with the World Bank's latest report stating said that India's Gross Domestic Product (GDP) growth is expected to accelerate moderately to 7.5% in the fiscal year 2019-20 (FY20), supported by continued investment strengthening, particularly private-improved export performance and resilient consumption. Besides, last hour recovery in local equity markets coupled with dollar losing sheen against some other currencies overseas mainly aided the currency's appreciation. On the global front, dollar dipped as weak U.S. economic data highlighted concern about a slowdown in the world's largest economy. Finally, the rupee ended at 69.30, 37 paise stronger from its previous close of 69.67 on Monday.

 

The FIIs as per Tuesday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5024.40 crore against gross selling of Rs 4903.15 crore, while in the debt segment, the gross purchase was of Rs 1600.15 crore with gross sales of Rs 1579.86 crore. Besides in the hybrid segment, the gross buying was of Rs 1.69 crore against gross selling of Rs 2.07 crore.

 

The US markets declined on Tuesday as investors with expectations of the first quarterly drop in earnings since 2016 were jolted by President Donald Trump's $11 billion trade salvo against the European Union and as the International Monetary Fund (IMF) cut its global growth forecast for the third time in six months. Asian markets are trading in red on Wednesday after renewed concern about a global economic slowdown and an escalation in trade tensions. Indian markets ended higher on Tuesday, with gains of over half a percent each, mainly on the back of late hour buying despite rise in crude oil prices owing to concerns over exports from the war-torn Libya. Today, the markets are likely to make pessimistic start on the back of growth concerns after the International Monetary Fund (IMF) lowered Gross Domestic Product (GDP) outlook for India as well as the global economy. The IMF has moderately scaled down India's economic growth projection to 7.3 per cent for the current financial year from its earlier forecast of 7.4 per cent and suggested that the country should continue to undertake economic reforms, including hire and fire, to create jobs. Traders will also be concerned about a private report stating that India's retail inflation is expected to have accelerated in March on slightly higher food prices but remain under the Reserve Bank of India's (RBI) medium-term target of 4 percent. As per the report, consumer prices rose at an annual rate of 2.80 percent in March, up from 2.57 percent in February. There will be some cautiousness with the finance ministry's statement that the government has fallen short of Rs 50,000 crore in its direct tax collection target of Rs 12 lakh crore for 2018-19. The shortfall in direct tax mop-up coupled with lower Goods and Services Tax (GST) realisation may have implications on fiscal deficit, which the government has pegged at 3.4 per cent of the GDP. However, some respite can come with report that the government has managed to meet the revised fiscal deficit target of 3.4 percent of the GDP after it cut last minute expenditure and rolled over fuel subsidies to make up for the shortfall in tax collection. The interim Budget presented in February revised upward the fiscal deficit target to 3.4 percent from 3.3 percent of GDP estimated earlier for 2018-19. Meanwhile, markets regulator SEBI has streamlined the procedure for issuing certified copies of orders and circulars to the parties involved and other applicants. For the parties involved in the proceedings, the regulator said certified copies of the orders passed by SEBI will be provided without charging any fee.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,671.95

11,599.80

11,714.00

BSE Sensex

38,939.22

38,698.96

39,079.23

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

391.95

270.60

262.20

275.50

Tata Motors

296.11

205.90

200.17

209.62

SBI

255.56

314.75

310.00

317.60

Indiabulls Housing Finance

161.81

831.75

815.75

853.35

IOC

150.96

155.40

150.80

158.00

 

  • Infosys' subsidiary -- EdgeVerve Systems has launched CollectEdge at LendIt Fintech USA 2019. 
  • Bharti Airtel has received approval from SEBI for a rights approval worth Rs 24,000 crore. 
  • Tata Motors has launched a first-of-its-kind Pioneer program SAMARTH, with an aim to acknowledge and promote the driving profession in the trucking space. 
  • Tech Mahindra has received approval for proposal to acquire 18.1% Equity Shares each of Infotek Software and Systems and Vitaran Electronics.
News Analysis