NSE Intra-day chart (10 April 2019)
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Market Commentary 11 April 2019
Markets to make a cautious start amid mixed Asian cues

 

Indian equity markets ended Wednesday's session on bearish note, as Sensex and Nifty settled with losses of over 350 and 85 points, respectively. The markets started on a cautious note, after the International Monetary Fund (IMF) lowered Gross Domestic Product (GDP) outlook for India. 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. Trading sentiments also remained lackluster 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. Key indices extended their losses in last hours of trade to settle near their day's low points. The markets participants remained worried, as the IMF cut its global growth forecast to the lowest level since the financial crisis, warning of significant downside risks to the world economy including trade tensions, pockets of political instability, mounting debt levels and increasing inequality. The IMF lowered its growth forecast for 2019 to 3.3 percent from the previous level of 3.5 percent in its latest World Economic Outlook (WEO). The street paid no heed towards a report stating 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. Finally, the BSE Sensex slipped 353.87 points or 0.91% to 38,585.35, while the CNX Nifty was down by 87.65 points or 0.75% to 11,584.30.

 

The US markets ended higher on Wednesday after the minutes of the Federal Reserve's latest monetary policy meeting suggested the outlook for interest rates remains fluid. The minutes said a majority of meeting participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving rates unchanged for the remainder of the year. Several of these participants saw the current target range for rates of 2.25 to 2.50 percent as close to their estimates of its longer-run neutral level. However, the minutes noted participants continued to emphasize that future rate decisions would depend on their ongoing assessments of the economic outlook and potential risks. On the economic front, reflecting a spike in energy prices, the Labor Department released a report showing consumer prices in the US increased by slightly more than anticipated in the month of March. The Labor Department said its consumer price index climbed by 0.4% in March after edging up by 0.2% in February. Consumer prices showed their biggest monthly increase in over a year, as energy prices soared by 3.5% in March after rising by 0.4% in February. Gasoline prices led the way higher, skyrocketing by 6.5%. Excluding the jump in energy prices and a modest increase in food prices, core consumer prices inched up by 0.1% in February, matching the uptick seen in the previous month. Dow Jones Industrial Average added 6.58 points or 0.03 percent to 26157.16, Nasdaq surged 54.97 points or 0.69 percent to 7964.24 and S&P 500 was up by 10.01 points or 0.35 percent to 2888.21.

 

Crude oil futures ended higher on Wednesday despite the Energy Information Administration (EIA) reported that US crude supplies climbed by 7 million barrels for the week ended April 5. Analysts polled by S&P Global Platts expected a rise of 2.8 million barrels, following two consecutive weeks of increases. The American Petroleum Institute on Tuesday had reported a climb of 4.1 million barrels. However, the EIA data showed that supplies of gasoline dropped by 7.7 million barrels, while distillates declined by 100,000 barrels last week. Benchmark crude oil futures for May surged 63 cents or 1 percent to settle at $64.61 a barrel on the New York Mercantile Exchange. June Brent crude gained $1.12 or 1.6 percent to settle at $71.73 a barrel on London's Intercontinental Exchange.

 

Extending gains for the second straight session, Indian rupee ended higher against dollar on Wednesday, on persistent selling of the American currency by banks and exporters. Market participants got support 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. However, further upward move got restricted as 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. On the global front, safe-haven yen held most of its recent gains on Wednesday as investor caution prevailed due to fresh global trade tensions and as the International Monetary Fund (IMF) downgraded its global economic outlook. Finally, the rupee ended at 69.11, 19 paise stronger from its previous close of 69.30 on Tuesday.

 

The FIIs as per Wednesday'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 4877.28 crore against gross selling of Rs 3647.71 crore, while in the debt segment, the gross purchase was of Rs 1147.43 crore with gross sales of Rs 1768.67 crore. Besides in the hybrid segment, the gross buying was of Rs 1.51 crore against gross selling of Rs 0.82 crore.

 

The US markets ended higher on Wednesday after Federal Reserve meeting minutes suggested no shift in the central bank's dovish tilt. Asian markets are trading mixed on Thursday on expectations global interest rates will stay lower for longer after a dovish turn by the European Central Bank and milder than expected US inflation. Indian markets ended lower on Wednesday on growth worries after the International Monetary Fund (IMF) cut its growth forecast for India and the global economy, citing heightened trade tensions. Today, the markets are likely to make a cautious start tracking mixed cues from Asian peers. Investors may remain cautious as the first phase of general elections start today. There will be some cautiousness with Federation of Indian Export Organisations' (FIEO) statement that rising protectionism, fluctuation in commodity prices and inadequate availability of liquidity are the three major challenges, which exporters will face in the coming months. It added that the WTO has already cautioned that the global trade growth is expected to be lower in 2019 than it was last year. However, some support may come later in the day with IMF's statement that some reforms in India have shown the benefits of digitalisation which has also reduced the opportunities for discretion and fraud. Meanwhile, the government has extended the last date for filing final sales return form GSTR-1 for March by two days till April 13. Similarly, the due date for furnishing tax deducted at source (TDS) return GSTR-7 for March has also been extended till April 12. There will be some buzz in the banking sector stocks with report that the government's large capital infusion of around Rs 60,000 crore during the last quarter would help public sector banks to improve their provision coverage ratio (PCR) because of which they are likely to report higher losses for the fourth quarter ended March 31, 2019. On the other hand, private banks will be able to improve their profitability sequentially and on a year-on-year basis. There will be some reaction in the pharma sector stocks with report that the pharma industry will have to wait for the return of double-digit growth as the industry is expected to witness a moderate growth of 8 to 10 per cent till FY21. The pricing pressure in the US generic market will continue to be a concern for the industry. There will be some buzz in the agriculture sector stocks with the Agricultural and Processed Food Products Export Development Authority's (APEDA) data showing data the country's exports of agricultural and processed food products have dipped by 2.27 per cent to $16.27 billion during the April-February period of 2018-19, on account of contraction in shipments of buffalo meat, wheat and non-basmati rice.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,584.30

11,544.02

11,652.32

BSE Sensex

38,585.35

38,434.94

38,843.11

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Motors

693.49

216.05

208.63

220.43

Yes Bank

320.16

268.25

265.35

273.30

HDFC Bank

270.32

2,237.35

2,217.57

2,270.57

SBI

192.38

310.90

308.25

315.30

Wipro

185.31

281.00

276.73

283.53

 

  • Raymond in collaboration with Reliance Industries has launched an eco-friendly range of fabrics Ecovera. 
  • L&T has launched mobile app for people with hearing impairment to make learning of sign language easy. 
  • NTPC has awarded order worth Rs 142 crore to GE Power India for supply and installation of emission control equipments.  
  • Tata Motors Group global wholesales in March 2019, including Jaguar Land Rover, were at 1,45,459 nos., lower by 5%, as compared to March 2018.
News Analysis