Indian equity benchmarks managed
to keep their head above water on Monday and went home with slender gains.
Markets traded choppy throughout the session, as street digested Moody's India
upgrade and focused on Gujarat Assembly elections that will take place next
month. The street took note of US-based rating agency Moody's report that lower
taxes and higher public expenditure could widen budget deficit in 2017-18, but
steps taken by the government to broaden the tax base and improve spending
efficiency would help in narrowing it going forward. Though, market
participants took some comfort with the IMF data, which forms part of the
latest World Economic Outlook report of the International Monetary Fund, stating
that India has moved up one position to 126th in terms of per capita GDP of
countries, though it still ranked lower than all its BRICS peers. Some support
also came with SBI research report stating that India might not have to wait
for 13 long years for next sovereign upgrade by a rating agency, as the
government is firm and committed to adhere with the fiscal consolidation
path. Traders also took some solace with
Finance Secretary Hasmukh Adhia's statement that the latest changes have
resolved nearly 90% of problems and discontentment related to the indirect tax
regime. Separately, Department of Economic Affairs Secretary Subhash Chandra
Garg has said that he hopes the growth rate to touch 7% by the end of fiscal
year. Garg called the current financial year a transitional one, bearing the
impact of major reforms like such as the demonetization and the implementation
the new indirect tax system-Goods and Services Tax (GST). Finally, the BSE
Sensex gained 17.10 points or 0.05% to 33,359.90, while the CNX Nifty was up by
15.15 points or 0.15% to 10,298.75.
The US markets closed higher on
Monday, with the Dow leading the gains as investors continued to focus on
corporate earnings and prospects for tax cuts. Market sentiment has grown less
positive in recent weeks, with investors more concerned about tax policy,
fuller valuations and a sense of complacency. From a fundamental perspective,
investors are also becoming worried about the flattening yield curve and high
yield market weakness, which tend to be bearish signals for equities. On the
economy front, the leading economic index surged 1.2% in October and suggested
no letup in a steadily growing US economy with the end of the year fast
approaching. The increase blew past a meager 0.1% gain in September, when a
spate of hurricanes battered Texas and Florida. The Dow Jones Industrial
Average gained 72.09 points or 0.31 percent to 23,430.33, the Nasdaq added
7.923 points or 0.12 percent to 6,790.71, and the S&P 500 edged higher by
3.29 points or 0.13 percent to 2,582.14.
Crude oil futures turned lower on
Monday, as traders turned cautious ahead of the OPEC meeting in Vienna, where
it's widely expected that OPEC and non-OPEC producers will agree to extend
output curbs. OPEC meets next week to determine whether they will extend their
supply quota plan through 2018. Oil has come under pressure of late due to
speculation that global supplies will continue to outpace demand. Benchmark
crude oil futures for December delivery ended lower by $0.46 at $ 56.09 a
barrel on the New York Mercantile Exchange. Brent crude for January delivery
was down by 51cent to $62.21 a barrel on the ICE.
The
Indian rupee after making a modestly positive start lost its direction in the
latter trade to end lower on Monday. The domestic currency extending its
euphoric mood after last session's surge slipped, as the dollar fell against a
basket of other major currencies with investors remaining skeptical of US
Republicans' efforts to pass tax cuts. However, the domestic markets remained
lackluster and weighed on the currency amid increased dollar demand from
importers, finally dragging the rupee lower for the day. On the global front,
the dollar pared gains against other major currencies on Monday, as sentiments
were impacted by uncertainty over the fate of a major US tax overhaul and
political turmoil in Germany. Finally, the rupee ended at 65.09, 8 paise weaker
from its previous close of 65.01 on Friday.
The
FIIs as per Monday'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
6832.46 crore against gross selling of Rs 5396.08 crore, while in the debt
segment, the gross purchase was of Rs 2345.92 crore with gross sales of Rs
2428.82 crore.
The US markets managed a modestly
higher closing in the last session, though the buying interest was somewhat
subdued, limiting the upside for the major averages. Traders got some support
with a report showing a much bigger than expected jump by its index of leading
US economic indicators in the month of October. The Asian markets have made
mostly a positive start led by the Japanese market which is up by over a
percent in early deals as traders put on hold concerns about US tax reforms and
European political issues. The Indian markets despite a range bound trade and
some choppiness managed a flat closing with a positive bias in the last
session. Today, the start is likely to be in green tracking firm global markets
as global growth optimism prevailed. Traders will be getting additional support
with international rating agency Moody's report which expecting growth to
revive next year, has said a 7.6 per cent GDP expansion can result in
corporates reporting a pre-tax profit growth of 5-6 per cent over the next
12-18 months. The rating agency over the weekend had revised upwards sovereign
ratings to Baa2 after almost 14 years. According to the rating agency, growth
will “rebound strongly in 2018 because the supply chain disruptions of 2017
will end soon”. Meanwhile, chief economic adviser Arvind Subramanian has hinted
that the government may combine the 12 per cent and 18 per cent slabs under the
goods and services tax (GST) into one in the near future and reserve the 28 per
cent rate only for demerit goods. Markets will also be getting some encouragement
with report that investors pumped over Rs 51,000 crore into various mutual fund
schemes in October after pulling out more than Rs 16,000 crore in the preceding
month.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,298.75
|
10270.22
|
10318.57
|
BSE Sensex
|
33359.90
|
33282.23
|
33443.55
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
ICICI Bank
|
136.06
|
318.55
|
315.87
|
322.57
|
SBI
|
135.08
|
333.00
|
330.45
|
336.35
|
Yes Bank
|
96.53
|
313.35
|
309.70
|
315.50
|
ITC
|
79.16
|
259.20
|
257.40
|
260.85
|
Vedanta
|
68.61
|
313.90
|
306.43
|
318.18
|
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Private sector lenders Yes Bank will join the BSE stock exchange's 30-member Sensex index, effective 18 December.