NSE Intra-day chart (18 April 2019)
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Market Commentary 22 April 2019
Markets to open marginally in red amid weak global cues

 

Indian equity benchmarks paused the four days gaining rally on Thursday, with Sensex and Nifty closing near their day's low points. The start of day was positive, buoyed by the Securities and Exchange Board of India's (SEBI) data report stating that the share of foreign portfolio investments (FPI) in domestic capital markets through participatory notes (P-notes) jumped to Rs 78,110 crore at the end of March from Rs 73,428 crore at the end of February. Of the total, P-notes holdings in equities at March-end were at Rs 56,288 crore, while in debts and derivatives were at Rs 20,999 crore and Rs 119 crore respectively. In early deals, traders also got comfort with the rating agency ICRA's latest report showing that the issuance of government-fully serviced bonds (GoI-FSBs) has significantly shot up to Rs 64,192 crore during the financial year 2019 as compared to Rs 15,095 crore during FY18. The agency also noted that such borrowings are estimated to have accounted for 0.34 percent of Gross Domestic Product (GDP) for FY19, as against 0.09 percent of GDP for FY18. However, key indices soon slipped in red terrain to trade lower for the rest of the session, amid reports that unemployment rate in India has doubled in eight years to 2018 as 50 lakh lost jobs in last two years beginning with demonetisation in November 2016. Further, adding more worries among investors, a private report stated that the first quarter of 2019 recorded 110 merger and acquisition deals worth $ 12.5 billion (about Rs 86,500 crore), a 33 per cent fall in value terms as against the year-ago period, due to factors such as global economic conditions and uncertainty around Brexit. Trading sentiments also got hit with former Reserve Bank of India Governor Raghuram Rajan's statement that protectionism does not really help preserve jobs and offers little defence against the job-destroying effects of automation and Artificial Intelligence, asserting that industrial and developing nations cannot afford to ignore the democratic reaction from those left behind by globalisation and technological change. Finally, the BSE Sensex slipped 135.36 points or 0.34% to 39,140.28, while the CNX Nifty was down by 34.35 points or 0.29% to 11,752.80.

 

The US markets ended Thursday's choppy trading session higher as investors continued to analyze the flow of corporate earnings and a series of conflicting economic reports, but sentiment was buoyed by strong market debuts from Pinterest Inc. and Zoom Video Communications Inc. Traders remained reluctant to make significant moves going into the long Easter weekend. Some support came in with the Commerce Department's report showing that retail sales rebounded by much more than expected in the month of March. The Commerce Department said retail sales soared by 1.6% in March after edging down by 0.2% in February. Street had expected retail sales to climb by 0.9%. Excluding a jump in sales by motor vehicle and parts dealers, retail sales still surged up by 1.2% in March following a revised 0.2% dip in February. Ex-auto sales had been expected to increase by 0.7% compared to the 0.4% drop originally reported for the previous month. The report said closely watched core retail sales, which exclude autos, gasoline, building materials and food services, also jumped by 1.0% in March after falling by 0.3% in February. A separate report from the Labor Department showed initial jobless claims unexpectedly edged lower in the week ended April 13, falling to a nearly 50-year low. The report said initial jobless claims dipped to 192,000, a decrease of 5,000 from the previous week's revised level of 197,000. Street had expected jobless claims to rise to 205,000. With the unexpected decrease, initial jobless claims dropped to their lowest level since hitting 182,000 in September of 1969. Dow Jones Industrial Average climbed 110.00 points or 0.42 percent to 26559.54, Nasdaq inched up 1.98 points or 0.02% percent to 7998.06 and S&P 500 was up by 4.58 points or 0.16 percent to 2905.03.

 

Crude oil futures ended higher on Thursday with marginal gains for the truncated week, as traders weighing near term crude supply and demand prospects. Oil prices took some support with tighter supply due to US sanctions on Iran and Venezuela, the drop in oil rigs count, the decline in US crude stockpiles - the first in four weeks - and a report showing crude oil exports from Saudi Arabia declined by 277,000 barrels a day to below 7 million barrels per day in February. A report showing a fall in shipments from Saudi Arabia also added support. Meanwhile, oil trading in the US and UK was closed for Good Friday. Benchmark crude oil futures for May surged 24 cents or 0.4 percent to settle at $64 a barrel on the New York Mercantile Exchange. June Brent crude gained 35 cents or 0.5 percent to settle at $71.97 a barrel on London's Intercontinental Exchange.

 

Reversing its three-session fall, the rupee bounced back to end higher against the US currency on Thursday, on persistent selling of the American currency by exporters. Sentiments turned optimistic with report that investments through participatory notes (P-notes) in domestic capital market rose to Rs 78,110 crore at the end of March, amid positive market sentiments. As per the latest SEBI data, the total value of P-note investments in Indian markets -- equity, debt, and derivatives -- stood at Rs 78,110 crore till March-end. However, dollar's strength against major global currencies overseas along with losses in the domestic equity market restricted the further up move. On the global front, euro fell to a one-week low on Thursday after weak manufacturing surveys in Europe raised concerns about an economy struggling to gain traction before the long Easter weekend. Finally, the rupee ended at 69.35, 25 paise stronger from its previous close of 69.60 on Tuesday.

 

The FIIs as per Thursday's data were net buyers in equity and debt segments both. In equity segment, the gross buying was of Rs 5199.08 crore against gross selling of Rs 4187.74 crore, while in the debt segment, the gross purchase was of Rs 436.55 crore with gross sales of Rs 98.38 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.54 crore against gross selling of Rs 4.36 crore.

 

The US markets settled higher on Thursday ahead of the holiday weekend as gains in industrial stocks slightly outweighed weakness in health-care and energy shares. Asian markets are trading mixed on Monday as investors awaited the return of major financial markets from the Good Friday holiday. Indian equity benchmarks before going to long weekend ended Thursday's volatile trading session in red territory and snapped four-day winning streak, tracking weak cues from Asian peers. Markets remained shut on Friday on account of Good Friday. Today, the start of the F&O series expiry week is likely to be slightly negative tailing weak cues from global markets amid higher crude oil prices. There will be some cautiousness with a private report that business sentiments continue to decline for the country's financial and macro-economic conditions in the second quarter of the year compared to the same period a year before. As per the report, Composite Business Optimism Index stands at 78.4 during Q2 2019 as against 85.0 during Q2 2018 marking a 7.7% decline. Traders may take note of Arvind Panagariya's statement that India must focus on growth of labour-intensive sectors to create decent jobs for the masses as well as give serious thought to privatising the public sector banks (PSBs), emphasized that the reform process must be completed in the coming five years. However, some respite may come later in the day with government data showing that India's exports rose to a five-month high of 11 percent in March on account of higher growth mainly in pharma, chemicals and engineering sectors, marking the outbound shipments at $331 billion for FY 2018-19. Imports rose by 1.44 percent to $43.44 billion in March 2019, while trade deficit -- the difference between exports and imports -- narrows to $10.89 billion during the month under review as compared to $13.51 billion in March 2018. Some support may also come with the Reserve Bank of India's (RBI) data that India's foreign exchange reserves continued its northward push, increasing by $1.105 billion to touch $414.886 billion in the week to April 12. Besides, Counsellor in India's Permanent Mission to the UN Ashish Sinha has said that India's growth trajectory holds immense potential for global stakeholders to establish energy, infrastructure and technology collaboration with the country. Meanwhile, the government has extended the last date for filing summary sales return, GSTR-3B, for March month by three days until April 23. There will be some buzz in the insurance companies stocks with the Insurance Regulatory and Development Authority of India (Irdai) data showing that non-life insurance firms registered a rise of 13 per cent in their collective premium income to Rs 1.70 trillion in the financial year ended March. There will be lots of earnings reaction based on the performance of the companies.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,752.80

11,708.82

11,826.47

BSE Sensex

39,140.28

38,986.48

39,390.77

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Motors

424.51

235.80

231.17

239.87

Yes Bank

324.91

255.55

250.42

264.32

Wipro

274.26

284.55

279.98

289.33

ICICI Bank

186.60

403.35

400.30

408.70

Reliance Industries

179.60

1,386.05

1,370.78

1,395.53

 

  • Maruti Suzuki will continue to manufacture diesel cars that customers can afford, thus ruling out stopping the production of diesel cars completely. 
  • Reliance Industries' telecom arm -- Jio has added 77.93 lakh customers in February 2019. 
  • Bajaj Finance, the lending arm of Bajaj Finserv, is offering a pre-approved personal loan to its existing customer without the need of any documents. 
  • Wipro is expecting revenue from its IT Services business to be in the range of $2,046 million to $2,087 million for the quarter ending June 30, 2019.
News Analysis