Indian equity indices saw a
further fall on Wednesday's trading session, with the Sensex and the Nifty closing
below their crucial psychological levels of 38,600 and 11,500, respectively.
After a cautious start, the markets traded in negative terrain during the whole
day, affected with Moody's Investors Service's statement that weak growth
prospects for India will complicate the government's fiscal consolidation
efforts, weighing on the sovereign's credit quality. Sentiments also remained
downbeat, after CRISIL in its earnings preview stated that India Inc will see
the slowest quarterly revenue growth in two years, which will more than halve
to 6 percent from 14-15 percent, due to a deceleration in consumption and lower
realisations. Bears held their tight grip on the markets in the second half of
the trading session, amid weak cues from European markets. Market participants
got anxious, amid a private report showing that India's retail inflation is
likely reached an eight-month high in June on rising food prices, but stayed
under the Reserve Bank of India's medium-term target of 4% for an eleventh
straight month. Investors paid no heed towards the latest finance ministry data
report which showed that deposits in bank accounts opened under Jan Dhan
scheme, launched about five years ago by the Modi-government, have crossed the
Rs 1 lakh crore mark. Finally, the BSE Sensex fell 173.78 points or 0.45% to
38,557.04, while the CNX Nifty was down by 57.00 points or 0.49% to 11,498.90.
The US markets ended higher on
Wednesday on account of optimism about a near-term interest rate cut. Federal
Reserve Jerome Powell is prepared to tell lawmakers that crosscurrents have
continued to weigh on the US economic outlook since the central bank's June
meeting. Powell's prepared remarks before the House Financial Services
Committee note crosscurrents, such as trade tensions and concerns about global
growth, have been weighing on economic activity and the outlook. The Fed chief
points out that increased uncertainties about the economic outlook and muted
inflation pressures led the central bank to pledge to act as appropriate to
sustain the expansion at its June meeting. Powell notes that many meeting
participants saw that the case for a somewhat more accommodative monetary
policy had already strengthened. A report released by the Commerce Department
showed wholesale inventories in the US increased in line with Street estimates
in the month of May. The Commerce Department said wholesale inventories rose by
0.4 percent in May after climbing by 0.8 percent in April. The continued rise
in inventories matched expectations. Inventories of durable goods edged up by
0.3 percent in May, as sharp increases in inventories of automotive products
and professional equipment were partly offset by steep drops in inventories of
lumber, metals and electrical equipment. The report said inventories of
non-durable goods also climbed by 0.5 percent, with notable growth in
inventories of farm products and miscellaneous non-durable goods offsetting a
slump in inventories of petroleum products. Dow Jones Industrial Average gained
76.71 points or 0.29 percent to 26860.20. Nasdaq surged 60.80 points or 0.75
percent to 8202.53 and S&P 500 was up by 13.44 points or 0.45 percent to
2993.07.
Crude oil futures ended higher
with gains of over 4 percent on Wednesday as US crude supplies dropped a fourth
week and a storm threatens Gulf of Mexico output. The Energy Information
Administration (EIA) reported that US crude supplies declined by 9.5 million
barrels for the week ended July 5. The American Petroleum Institute on Tuesday
reported an 8.1 million-barrel drop. The EIA data also showed that gasoline
inventories were also down by 1.5 million barrels, while distillate stockpiles
climbed by 3.7 million barrels last week. Meanwhile, a tropical cyclone is
expected to form by Thursday over the North-Central Gulf of Mexico. As of 11:30
a.m. central time Wednesday, a total of nearly 32% of oil production in the
Gulf of Mexico and almost 18% of natural-gas production were shut in as a
precaution. Benchmark crude oil futures for August surged $2.60 or 4.5 percent
to settle at $60.43 a barrel on the New York Mercantile Exchange. September
Brent rose $2.85 or 4.4 percent to settle at $67.01 a barrel on London's
Intercontinental Exchange.
Indian rupee ended marginally lower against US dollar on
Wednesday, due to fresh demand for the American currency from banks and
importers. Traders remained concerned with Moody's Investors Service's
statement that weak growth prospects for India will complicate the government's
fiscal consolidation efforts, weighing on the sovereign's credit quality. Some
concern also came with a private report showing that India's retail inflation
is likely reached an eight-month high in June on rising food prices, but stayed
under the Reserve Bank of India's medium-term target of 4% for an eleventh
straight month. Besides, a weak trend at Dalal Street coupled with US dollar's
gain against other currencies overseas weighed on the local unit. On the global
front, dollar edged toward a three-week high against a basket of major
currencies on Wednesday, as an unwinding of bets on deep US interest rate cuts
pushed Treasury yields higher. Finally, the rupee ended at 68.58, 7 paise
weaker from its previous close of 68.51 on Tuesday.
The FIIs as per Wednesday'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 4142.76 crore against gross
selling of Rs 5019.59 crore, while in the debt segment, the gross purchase was
of Rs 3394.55 crore with gross sales of Rs 1518.51 crore. Besides, in the
hybrid segment, the gross buying was of Rs 19.97 crore against gross selling of
Rs 23.07 crore.
The US markets closed higher on
Wednesday after Federal Reserve Chairman Jerome Powell set the stage for the
central bank to cut interest rates to bolster flagging growth. Asian markets
are trading in green in early deals on Thursday following overnight gains on
Wall Street. Indian markets ended lower with losses of round half a percent on
Wednesday amid cautiousness as US President Donald Trump once again warned
India that its high tariffs were not acceptable. Today, the markets are likely
to make an optimistic start tracking firm global cues. Traders will be getting
encouragement with Commerce and Industry Minister Piyush Goyal's statement that
foreign direct investments (FDI) into the country grew 3 per cent to $6.95
billion in April. During 2018-19, the country recorded the highest-ever total
FDI inflow of $64.38 billion, which is 6 per cent higher as compared to
2017-18. Also, there will be some support with CBDT Chairman Pramod Chandra
Mody's statement that the government has re-calibrated and fixed the direct
taxes collection target for this financial year at Rs 13.35 trillion, a task
that is difficult, but achievable. However, there may be some cautiousness with
a private report that the country's real GDP growth is likely to be 6.7 percent
from 6.9 percent forecasted earlier in FY20 citing the continuing slowdown in
consumption demand and warned that a revival is unlikely before FY21. Besides,
Fitch Ratings stated that India's budget outlined some reforms that could
support the economy, but its fiscal stance was left broadly unchanged with no
plans for meaningful consolidation. Meanwhile, the Union Cabinet has approved a
bill that seeks to merge 13 central labour laws into a single code which would
apply on all establishments employing 10 or more workers. There will be some
buzz in the telecom stocks with report that telecom operators intend to install
over 57,500 towers for mobile connectivity in rural areas during the financial
year 2019-20. There will be some reaction in hospital industry stocks with
ICRA's report stating that the hospital sector is seeing better days ahead
after more than two years of subdued performance, mainly due to several
regulatory measures, including the cap on prices of stents and knee implants by
the National Pharmaceutical Pricing Authority (NPPA). There will be some result
reactions too, to keep the markets in action.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE
Nifty
|
11,498.90
|
11,451.80
|
11,569.85
|
BSE
Sensex
|
38,557.04
|
38,402.85
|
38,783.04
|
Nifty Top volumes
Stock
|
Volume
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
(in
Lacs)
|
Yes
Bank
|
757.77
|
93.00
|
91.67
|
94.17
|
Tata
Motors
|
317.38
|
151.65
|
148.42
|
155.57
|
State
Bank of India
|
186.82
|
354.20
|
349.83
|
360.03
|
ICICI
Bank
|
164.94
|
430.90
|
427.83
|
433.33
|
Tata
Steel
|
134.81
|
454.80
|
443.78
|
470.08
|
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Bharti Airtel has partnered with Irish and India based global EdTech, Shaw Academy to offer popular online courses to its mobile customers.
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