NSE Intra-day chart (24 April 2019)
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FII Activity(Rs. Cr)
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Market Commentary 25 April 2019
Benchmarks likely to open marginally in red amid weakness in Asian peers

 

Bulls made a roaring comeback on Wednesday's trading session, with Sensex and Nifty closing with gains of more than a percent each. After a positive start, the markets remained in green terrain throughout the day, as the Reserve Bank of India (RBI) decided to infuse more liquidity into market. It will buy government securities under Open market operations (OMOs) for an aggregate amount of Rs 25,000 crore in May 2019 through two auctions of Rs 12,500 crore each. But, gains were limited, amid credit rating agency, Care Ratings' latest report warning that a spike in crude oil prices by 10 percent owing to the US sanctions on Iranian crude exports can result in a 0.40 percent widening of the current account deficit (CAD), which can subsequently play out into a 3-4 percent fall in the rupee and also push up inflation by 0.24 percent. Further, key indices gained traction in the dying hours of the trade, buoyed by Fitch Ratings' report indicating that the RBI is the first central bank in the Asia-Pacific region to begin an explicit interest rate easing cycle buoyed by benign food inflation and easier global financial condition.  Some support also came with a report that around 3.10 crore small farmers have so far received the first tranche of Rs 2,000 each under the PM-Kisan scheme and 2.10 crore peasants have got the second installment as well, costing Rs 10,500 crore to the exchequer. The market participants took note of another report that the Ministry of Corporate Affairs plans to start gathering primary data from persons who have put in their money in chit funds and deposit-taking schemes, amid continuing efforts to clamp down on illicit fundraising activities. Finally, the BSE Sensex gained 489.80 points or 1.27% to 39,054.68, while the CNX Nifty was up by 150.20 points or 1.30% to 11,726.15.

 

The US markets ended lower with cut of around quarter percent on Wednesday, a day after the S&P 500 and Nasdaq carved out their first records in months, following earnings from high-profile companies, including Dow components Boeing and Caterpillar Inc., that offered a mixed picture of American corporations. A mixed batch of earnings reports from big-name companies such as Boeing (BA), Caterpillar (CAT) and AT&T (T) also contributed to the choppy trading on Wall Street. A light day on the US economic front also kept traders on the sidelines ahead of the release of reports on weekly jobless claims, durable goods orders and first quarter GDP in the coming days. Corporate quarterly results remain in focus for markets midweek. More than a fifth of the S&P 500 constituents have reported results, with nearly 80% of those companies producing earnings results that topped street's consensus estimates, compared with about 65% in the fourth quarter. To be sure, that reflects lowered estimates heading into the quarter amid worries about a recession and anemic growth outside of the US, amplified by a trade spat between Washington and Beijing. Dow Jones Industrial Average declined 59.34 points or 0.22 percent to 26597.05, Nasdaq dropped 18.81 points or 0.23 percent to 8102.02 and S&P 500 was down by 6.43 points or 0.22 percent to 2927.25.

 

Crude oil futures ended lower on Wednesday, with a hefty gain in weekly domestic crude stockpiles prompting the first loss in four sessions. The Energy Information Administration (EIA) reported that US crude supplies rose by 5.5 million barrels for the week ended April 19. Analysts polled by S&P Global Platts expected a decline of 500,000 barrels. The American Petroleum Institute on Tuesday reported an increase of 6.9 million barrels. However, Brent oil futures managed to finish a few cents higher as energy-market participants assessed the likelihood of producers quickly ramping up supply in response to tougher US action against Iran's oil market. Benchmark crude oil futures for June declined 41 cents or 0.6 percent to settle at $65.89 a barrel on the New York Mercantile Exchange. However, June Brent crude added 6 cents or less than 0.1 percent to settle at $74.57 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended lower against US dollar on Wednesday, due to higher demand for the greenback from importers. Traders remain concerned with Care Ratings' latest report warning that a spike in crude oil prices by 10 percent owing to the US sanctions on Iranian crude exports can result in a 0.40 percent widening of the current account deficit (CAD), which can subsequently play out into a 3-4 percent fall in the rupee and also push up inflation by 0.24 percent. A strengthening US dollar against major global currencies also affected rupee's trading pattern. However, an encouraging rally in domestic equities along with easing crude oil prices - after hitting 2019 highs recently - kept the downside in check. On the global front, euro fell towards a one-month low on Wednesday as the contrast between solid economic data in the United States and souring confidence measures in the euro zone kept the dollar supported near 22-month highs. Finally, the rupee ended at 69.86, 24 paise weaker from its previous close of 69.62 on Tuesday.

 

The FIIs as per Wednesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 3536.46 crore against gross selling of Rs 3703.36 crore, while in the debt segment, the gross purchase was of Rs 510.37 crore with gross sales of Rs 1684.54 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.45 crore against gross selling of Rs 2.41 crore.

 

The US markets ended lower on Wednesday, as investors digested a batch of mixed earnings reports. Asian markets are trading mostly in red on Thursday as a surprise deterioration in German business morale rekindled fears of slowing global growth. Snapping three-day losing streak, Indian markets gained momentum and ended higher with gains of over a percent on Wednesday, as earnings optimism outweighed concerns over elevated oil prices. Today, the start of the F&O series expiry session is likely to be slightly negative tailing the weakness in Asian peers. Besides, lots of volatility may be seen towards the expiry of April series as traders rollover their positions. However, some relief may come with report that giving relief to composition scheme taxpayers under the GST, the finance ministry has allowed such businesses to file self-assessed tax return on quarterly basis in a simplified form. In yet another simplification, the Goods and Services Tax (GST) Council has added flexibility into the way a company can utilise the available input tax credit. Any company would now be eligible to use credit available against paid integrated GST (IGST) to set off tax liabilities of state GST (SGST) and central GST (CGST) in any proportion and in any order. Moreover, the Finance Ministry has introduced changes in the e-way bill system, including auto calculation of distance based on PIN codes for generation of e-way bill and blocking generation of multiple bills on one invoice, as it seeks to crack down on GST evaders. There will be some buzz in the banking sector with report that the RBI has directed banks to disclose loans outstanding to Infrastructure Leasing & Financial Services and the provisions required to be made against the exposure, in their notes accompanying their fourth-quarter financial results. The RBI wants banks to disclose the total loans outstanding as well as the percentage of loans that are non-performing as per the Income Recognition and Asset Classification (IRAC) guidelines but not yet classified as NPAs. There will be some reaction in telecom sector stocks with ICRA's report that the wireless broadband subscriber base continues to maintain its strong growth trajectory, increasing to 532 million in February 2019, or 45 percent of the total subscriber base, witnessing addition of 10.2 million during the month. 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

11,726.15

11,623.05

11,785.05

BSE Sensex

39,054.68

38,718.67

39,243.02

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Motors

1,116.85

223.60

216.48

231.83

Yes Bank

906.38

239.15

233.43

242.63

ONGC

565.06

168.65

166.08

170.83

SBI

467.26

310.75

305.58

313.93

Coal India

361.81

254.00

252.17

257.07

 

  • Maruti Suzuki has launched the New Alto, which has been India's best-selling car for 15 consecutive years. 
  • Bajaj Finserv is offering a substantial business loan for CAs of up to Rs 35 lakh, so they can finance the purchase and installation of the latest tax software without breaking into a sweat. 
  • Infosys has entered into partnership with Huawei Cloud to jointly develop solutions around cloud computing services for business organisations. 
  • Power Grid has selected Siemens to modernize the country's first and oldest high voltage direct current link, Vindhyachal.
News Analysis