Indian equity bourses broke 6-day
winning rally on Tuesday's trading session, with Sensex and Nifty closing lower
by 334 and 73 points, respectively. The day started on a cautious note, as
Finance Minister Nirmala Sitharaman cautioned that trade wars and protectionism
have generated uncertainties, which will ultimately impact the flow of capital,
goods and services. Anxiety also came among investors, amid a report showing
that as many as 360 infrastructure projects, each worth Rs 150 crore or more,
have shown cost overruns to the tune of over Rs 3.88 lakh crore owing to delays
and other reasons. Key equity benchmarks remained lackluster during the whole
trading session, despite the International Monetary Fund's (IMF) statement that
India's decision to reduce corporate income tax to help revive investment.
Though, the agency said India should address continued fiscal consolidation and
secure long-term stability of the fiscal conditions. Market participants paid
no heed towards the Retirement fund body, Employment Provident Fund
Organisation's (EPFO) latest Provisional Estimate of Net Payroll data report
showing that India created 10,86,113 new jobs in the month of August 2019.
Finally, the BSE Sensex lost 334.54 points or 0.85% to 38,963.84, while the CNX
Nifty was down by 73.50 points or 0.63% to 11,588.35.
The US markets ended lower on
Tuesday as traders digested the latest batch of earnings reports. Shares of
McDonald's (MCD) came under pressure after the fast food giant reported third
quarter results that missed Street estimates on both the top and bottom lines.
Delivery giant UPS (UPS) also saw notable weakness after reporting third
quarter earnings that beat expectations but on weaker than expected sales.
Besides, some cautiousness also prevailed in the markets amid renewed
uncertainty about Brexit after UK lawmakers voted to move forward with
legislation related to Britain's withdrawal from the European Union but then
voted against a shortened time frame to review the bill. Members of Parliament narrowly voted against
the limited time frame, which would have provided just three days to evaluate
the legislation. The vote suggests lawmakers will not meet an October 31
deadline, setting the stage for another extension by the EU to avoid a no-deal
Brexit. On the economic front, after reporting an unexpected jump in existing home
sales in the previous month, the National Association of Realtors (NAR)
released a report showing existing home sales pulled back by much more than
anticipated in the month of September. NAR said existing home sales plunged by
2.2 percent to an annual rate of 5.38 million in September after jumping by 1.5
percent to an upwardly revised 5.50 million in August. Street had expected
existing home sales to drop by 0.7 percent to a rate of 5.45 million from the
5.49 million originally reported for the previous month.
Crude oil futures ended higher on
Tuesday on a report that major oil producers are likely to consider deeper
production cuts when they meet in December. Members of the Organization of the
Petroleum Exporting Countries (OPEC) and their allies will consider making
further reductions to crude output when they meet in December because of
growing concerns about a slowdown in growth for oil demand. The report also
said OPEC member Saudi Arabia wants to first lift adherence to the agreement,
as Iraq and Nigeria are among the countries that have not fully complied with
the reductions. Benchmark crude oil futures for November rose 85 cents or 1.6
percent to settle at $54.16 a barrel on the New York Mercantile Exchange.
December Brent gained 74 cents or 1.3 percent to settle at $59.70 a barrel on
London's Intercontinental Exchange.
Indian
rupee ended stronger against dollar on Tuesday, as optimism about US-China
trade talks and easing crude oil prices enthused investors. Traders also remained
optimistic with commerce and industry minister Piyush Goyal's statement that in
a clear sign that India and the US are close to finding common ground on their
outstanding trade issues that started looking intractable. However, dollar's
strength against major global currencies overseas along with lackluster trade
in the equity markets restricted the further up move. On the global front, euro
was steady on Tuesday after rising to a two-month high in the previous session
versus the dollar as traders waited for the British parliament to vote on the
Withdrawal Agreement Bill as it will shine light on when and how Britain will
exit the EU. Finally, the rupee ended at 70.94, 20 paise stronger from its
previous close of 71.14 on Friday.
The
FIIs as per Tuesday's data were net buyers in both equity and debt segments. In
equity segment, the gross buying was of Rs 5509.22 crore against gross selling
of Rs 5401.47 crore, while in the debt segment, the gross purchase was of Rs
1144.15 crore with gross sales of Rs 824.83 crore. Besides, in the hybrid
segment, the gross buying was of Rs 2.05 crore against gross selling of Rs 0.81
crore.
The US markets ended lower on
Tuesday after British lawmakers rejected the government's proposed timetable
for passing legislation to ratify its deal to exit the European Union. Asian
markets are trading in red on Wednesday following overnight losses on Wall
Street. Indian markets snapped six-day gaining streak and ended lower on
Tuesday, amid sharp fall in Infosys, while weak earnings from a raft of
companies further dented investors' sentiment. Today, the markets are likely to
make flat-to-negative start tracking weak global cues. There will be some
cautiousness with report that corporate India's merger and acquisition activity
in the July-September quarter witnessed a downtrend with total deal value
falling by more than half over the last year, largely owing to a slump in
economic activity and lack of big ticket deals. Investors will also be
concerned with report that India Ratings & Research (Ind-Ra) has attributed
widening of fiscal deficit in states in 2018-19 to slippage on the non-capital
expenditure by them. The rating agency believed that meeting the N K Singh
panel's recommended level of aggregate debt burden at 20 per cent of GDP by
2022-23 by states will be a challenge in an economic environment characterised
by slow growth and weak demand. Traders may take note of a private report that
as a run-up to the first supplementary demand for grants, the govt is likely to
be saddled with large demands for additional expenditure from a number of
departments. Though, some support may come later in the day with report that
GDP growth numbers in China and India were not terrible, suggesting the
slowdown should not cause excessive pessimism. Meanwhile, markets regulator
SEBI came out with a framework for listing of commercial papers on stock
exchanges in order to broaden investor participation in such securities. To
enable listing of commercial papers (CPs) and to ensure investor protection,
Sebi noted that it is important that issuers, who intend to list such
securities, make appropriate disclosures at the time of listing and on a
continuous basis. Banking stocks will be in focus with global rating agency
Fitch's report that banks would face a capital shortfall of about $50 billion
(about Rs 3.5 lakh crore) in the event of a systemic crisis in the non-banking
financial company (NBFC) sector. The study estimated that the banking system's
gross NPA ratio would rise to 11.6 percent by 2020-21 from 9.3 percent at
2018-19. There will be some reaction in steel stocks with Icra's report that domestic
hot-rolled coil (HRC) prices, which remained much higher than the anti-dumping
duty (ADD) levels throughout FY2018 and FY2019, have corrected steeply,
dropping below the ADD stipulated level for the first time in the second week
of October 2019. There will be lots of earnings reaction based on the
performance of the companies, to keep the markets buzzing.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,588.35
|
11,536.55
|
11,677.25
|
BSE Sensex
|
38,963.84
|
38,783.64
|
39,285.26
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
4,074.38
|
51.80
|
49.17
|
55.52
|
Infosys
|
901.53
|
643.55
|
624.23
|
676.98
|
Tata Motors
|
535.32
|
131.75
|
129.17
|
134.97
|
ICICI Bank
|
349.66
|
451.15
|
439.57
|
460.72
|
SBI
|
275.74
|
270.50
|
267.67
|
274.17
|
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