Indian equity benchmarks got a
breather on the last trading day of the week, with Sensex and Nifty showing a
smart recovery of 1.02% and 0.87%, respectively. The markets made a firm start,
aided by the Reserve Bank of India's (RBI) deputy governor Viral Acharya's
statement that the RBI will continue to inject liquidity into the banking
system through open market operation (OMO) purchases till the end of this
fiscal. In the current financial year, the central bank has conducted OMO
purchases to the tune of Rs 1.36 trillion, with over Rs 1 trillion of the
infusion in the last three months. Traders took encouragement with a private
report stating that in the next 16 years, India will dominate the list of
fastest growing cities in the world. Domestic sentiments also got boost with
another private report that the investment of $100 billion in the Indian
telecom industry as envisioned in the National Digital Communications Policy
2018 (NDCP) would result in an increase of $1.21 trillion in India's Gross
Domestic Product (GDP) on a cumulative basis. In the last leg of the trade, the
key indices added gains to end the session near intraday high points, tracking
firm global cues. Traders were optimistic with a report that the RBI is likely
to cut key interest rates by 25 basis points either at the upcoming policy
review in February or the one after that in April. Adding more comfort, the
Cabinet raised the government's contribution to National Pension Scheme (NPS)
to 14% of basic salary from the current 10%. Some support also came with
reports that the total wealth held by individuals in the country is expected to
touch Rs 517.88 lakh crore by FY23, growing at an annual rate of 16.99%. Direct
equity and mutual funds are expected to be the growth drivers of this northward
trend, growing at a CAGR of 24.41% and 21.04%, respectively, over the next five
years. Meanwhile, Commerce and Industry
Minister Suresh Prabhu sought investments from global funds in startups from
different sectors including infrastructure, agriculture and healthcare.
Finally, the BSE Sensex gained 361.12 points or 1.02% to 35,673.25, while the
CNX Nifty was up by 92.55 points or 0.87% to 10,693.70.
Extending southward journey for
third straight session, the US markets ended the Friday's trade sharply lower
with major settled with a cut of around three percent. Sentiments remained
dampened after the Labor Department's closely watched monthly jobs report
showed US employment increased by much less than expected in the month of
November. The Labor Department said non-farm payroll employment rose by 155,000
jobs in November after surging up by a downwardly revised 237,000 jobs in
October. The street had expected employment to climb by about 200,000 jobs
compared to the jump of 250,000 jobs originally reported for the previous
month. Meanwhile, the report said the unemployment rate in November remained
unchanged for the second straight month at 3.7 percent, holding at its lowest
level since hitting 3.5 percent in December of 1969. Average hourly employee
earnings rose by $0.06 to $27.35 in November, reflecting a 3.1 percent increase
compared to the same month a year ago. The annual rate of growth was unchanged
from October. Lingering skepticism about a US-China trade agreement also
weighed on the markets even though President Donald Trump tweeted, China talks
are going very well. Dow Jones Industrial Average declined 558.72 points or
2.24 percent to 24388.95 and S&P 500 lost 62.87 points or 2.33 percent to
2633.08 and Nasdaq was down by 219.01 points or 3.05 percent to 6969.25.
Crude oil futures ended sharply
higher on Friday after OPEC and non-OPEC members reached an agreement to cut
crude production next year. Oil prices had stayed weak early on in the session
amid doubts over whether the OPEC will decide on a reduction in crude oil
production. On the third day of their meeting in Vienna, OPEC members decided
to reduce oil production by a total of 800,000 barrels per day, from October
levels. Non-OPEC nations, led by Russia, agreed to reduce output by 400,000
barrels per day. The proposed reduction of 1.2 million barrels per day, is much
more than the anticipated cut of about 1 million barrels per day. Earlier,
there was talk of a 1.4 million barrel cut, but media reports suggested that
Saudi Arabia was keen for a cut of only 1 million barrels. Benchmark crude oil
futures for January plunged $1.12 or 2.2 percent to settle $52.61 a barrel on
the New York Mercantile Exchange. February Brent crude declined $1.61 or 2.7
percent to settle at $61.67 a barrel on London's Intercontinental Exchange.
Indian rupee ended higher against
US dollar on Friday amid weakening American currency and firm performance in
domestic equity markets. Traders took some comfort with Reserve Bank of India's
(RBI) deputy governor Viral Acharya's statement that the RBI will continue to
inject liquidity into the banking system through open market operation (OMO)
purchases till the end of this fiscal. In the current financial year, the
central bank has conducted OMO purchases to the tune of Rs 1.36 trillion, with
over Rs 1 trillion of the infusion in the last three months. Traders remained
optimistic with a report that the RBI is likely to cut key interest rates by 25
basis points either at the upcoming policy review in February or the one after
that in April. Adding to the optimism, the Cabinet raised the government's
contribution to National Pension Scheme (NPS) to 14% of basic salary from the
current 10%. over the next five years. Finally, the rupee ended at 70.67, 23
paise stronger from its previous close of 70.90 on Thursday.
The
FIIs as per Friday's data were net sellers in equity segment, while they were
net buyers in debt segment. In equity segment, the gross buying was of Rs
5395.85 crore against gross selling of Rs 5449.24 crore, while in the debt
segment, the gross purchase was of Rs 3739.53 crore with gross sales of Rs
1161.05 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.41
crore against gross selling of Rs 0.09 crore.
The US markets extended their
losses for third straight session and ended sharply lower on Friday on
weaker-than-expected jobs report and China-US trade tensions. Asian markets
were trading in red on Monday on worries over slowing growth and fears that a
fresh flare-up in tensions between Washington and Beijing could quash any
chances of a trade deal. Snapping three-day losing streak, Indian markets ended
significantly higher on Friday as a strong rupee amid positive cues from Asia
and Europe bolstered investor sentiment. Today, the markets are likely to make
gap-down opening on weak global cues amid US-China trade tensions. Traders may
remain cautious ahead of the election results outcome of the five major states
- Chhattisgarh, Madhya Pradesh, Mizoram, Telangana and Rajasthan - on December
11. The exit polls for five states showed that Prime Minister Narendra Modi's
popularity is in doubt going into 2019 election. Traders will be reacting to a
report that foreign investors have pulled put close to Rs 400 crore from the
Indian stock market in the last five trading sessions amid weakness in global
equities due to the arrest of a high-profile Chinese executive. Traders will
also be concerned about the Reserve Bank of India's (RBI) data showing that
India's current account deficit (CAD) widened to 2.9% of the Gross Domestic
Product (GDP) in the second quarter of the fiscal compared to 1.1% in the
year-ago period, mainly due to a large trade deficit. However, traders may take
some support later in the day with the RBI's weekly statistical supplement
showing that India's foreign exchange (forex) reserves rose by $932.8 million
during the week ended November 30. Also, traders may take note of IMF's Chief
Economist Maurice Obstfeld's statement that India's growth has been very solid
over the past four years and he praised the fundamental economic reforms like
the GST and the Insolvency and Bankruptcy Code carried out by the government.
There will be some reaction in steel sector stocks with the Joint Plant
Committee's (JPC) report showing that India's crude steel output grew 3.8% to
8.92 million tonne (MT) in November 2018as compared to 8.60 MT crude steel
produced during the same period a year ago. There will be some buzz in the gem
and jewellery sector stocks with report that India's gem and jewellery exports,
which witnessed a decline of 4.35% in dollar terms during April-October, may
post a recovery in the remaining five months of the current fiscal year, thanks
to improved macroeconomic conditions in the US. Also, there will be some buzz
in the coal sector stocks with a private repro that India's coal import rose
9.7% to 156.08 MT in the April-November period of the ongoing fiscal, as
against 142.25 MT in the corresponding months a year ago.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
NSE Nifty
|
10,693.70
|
10,627.18
|
10,732.38
|
BSE Sensex
|
35,673.25
|
35,457.66
|
35,809.44
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
497.51
|
166.20
|
161.47
|
171.47
|
Kotak Mahindra Bank
|
338.08
|
1,279.65
|
1,188.55
|
1,358.35
|
Sun Pharma
|
239.06
|
411.25
|
404.27
|
422.12
|
ICICI Bank
|
149.80
|
352.20
|
347.33
|
355.03
|
IOC
|
137.48
|
129.75
|
127.77
|
132.67
|
Larsen & Toubro's construction arm -- L&T Construction has won orders worth Rs 2,547 crore.
Tata Motors' wholly owned subsidiary -- JLR has reported total retail sales of 48,160 vehicles in November 2018, down 8.0% year-on-year.
Government has sold 2.21%, i.e. 13,73,11,943 equity shares in Coal India to CPSE ETF mutual fund scheme.
NTPC is likely to acquire the central government's stake in SJVN.