NSE Intra-day chart (28 March 2019)
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Market Commentary 29 March 2019
Benchmarks to make a positive start amid firm global markets

 

Indian equity benchmarks ended Thursday's trading session over a percent higher ahead of March F&O expiry, with Sensex and Nifty reclaiming their crucial psychological levels of 38,500 and 11,550, respectively. The markets made a positive start to trade firmly throughout the session, buoyed by the India Meteorological Department director general, K.J. Ramesh's statement that India's monsoon is likely to be a robust and healthy one this year provided there is not a surprise El Nino phenomenon. Adding some optimism, the Global Food Policy Report said that India has taken various measures to bolster the rural economy but the efficacy of the schemes would depend upon their implementation. The report further said the prospects for rural development are encouraging in the current year and hoped that the general elections will increase attention to rural areas where the majority of voters live. Some comfort also came with a private report stating that bullish positions in the Indian rupee firmed over the past two weeks, ahead of general election, while long positions in the yuan unwound on concerns over slowing domestic demand and uncertainty around Sino-US trade talks. In the second half of the session, key indices gained the momentum to settle near their day's high points. Traders took encouragement with a report that private equity (PE) and venture capital (VC) investments in the country stood at $20.5 billion across 786 transactions in 2018 on account of tech-enabled start-ups, e-commerce and information technology-enabled services. The funding in 2018 was the same as the investment in the preceding year. Domestic sentiments also got boost with a report that the Reserve Bank of India (RBI) is likely to cut repo rate by 25 basis points in the April policy due to weak economic activity. The monetary policy committee is scheduled to meet from April 2 to 4. Market participants paid no heed towards with finance ministry's statement that currency in circulation as percentage of GDP declined by over 1 percentage points to 10.48 per cent in the two years after demonetization. Investors also shrugged off report that there is a shortfall in income tax collections. Progress in tax collection has been reviewed as against the targeted Rs 12 lakh crore. Only 85.1% of the targeted or Rs 10.21 lakh crore has been collected as of March 23. Finally, the BSE Sensex rose 412.84 points or 1.08% to 38,545.72, while the CNX Nifty was up by 124.95 points or 1.09% to 11,570.00.

 

The US markets ended higher on Thursday as traders reacted to reports on progress in the ongoing trade talks between the US and China. A senior US administration said that US and Chinese negotiators have made progress on the details of the written agreements to address US concerns. The report comes as US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin arrive in Beijing for a new round of high-level talks with Chinese officials. However, upside remain capped after the Commerce Department revealed the increase in US gross domestic product in the fourth quarter was downwardly revised by more than anticipated. The Commerce Department said Gross Domestic Product (GDP) climbed by 2.2% in the fourth quarter compared to the previously reported 2.6% increase. Street had expected the pace of growth to be downwardly revised to 2.4%. With the downward revision, the pace of GDP growth in the fourth quarter is notably slower than the 3.4% jump in the third quarter. The slower than previously estimated fourth quarter GDP growth was partly due to a downward revision to consumer spending, which climbed by 2.5% compared to the previously reported 2.8% increase. The report also showed downward revisions to state and local government spending and non-residential fixed investment, which were partly offset by a downward revision to imports. Meanwhile, the Labor Department released a report unexpectedly showing a modest decrease in first-time claims for US unemployment benefits in the week ended March 23. The report said initial jobless claims dipped to 211,000, a decrease of 5,000 from the previous week's revised level of 216,000. Dow Jones Industrial Average surged 91.87 points or 0.36 percent to 25717.46, Nasdaq gained 25.79 points or 0.34 percent to 7669.17 and S&P 500 was up by 10.07 points or 0.36 percent to 2815.44.

 

Crude oil futures ended lower on Thursday as data showing the US economy grew a slower 2.2% in the fourth quarter were released, feeding concerns over a slowdown in energy demand. A recent slump in Treasury yields - and an inversion of the yield curve - has underlined those economic worries. Meanwhile, US President Donald Trump called on the Organization of the Petroleum Exporting Countries (OPEC) to lift output, as recent domestic supply data surprised with a gain, and because global growth concerns fed uncertainty over energy demand. Benchmark crude oil futures for May declined 11 cents or 0.2 percent to settle at $59.30 a barrel on the New York Mercantile Exchange. May Brent crude fell a penny to settle at $67.82 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended significantly weaker against the Greenback on Thursday, following fresh demand for the US currency from banks and importers to meet the month end dollar demand. Sentiments weakened with report that there is a shortfall in income tax collections. Progress in tax collection has been reviewed as against the targeted Rs 12 lakh crore. Only 85.1% of the targeted or Rs 10.21 lakh crore has been collected as of March 23. Traders overlooked report that India's monsoon, crucial for Asia's third largest economy, is likely to be a robust and healthy one this year provided there isn't a surprise El Nino phenomenon. Monsoon rains, the lifeblood for India's farm-dependent $2.6 trillion economy, arrive on the southern tip of Kerala state around June 1. On the global front, dollar rose on Thursday as rival currencies struggled following more dovish soundings from central banks, while the yen gained as investor worries about the global economy grew. Finally, the rupee ended at 69.30, 42 paise weaker from its previous close of 68.88 on Wednesday.

                                                                                     

The FIIs as per Thursday'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 6869.57 crore against gross selling of Rs 5500.09 crore, while in the debt segment, the gross purchase was of Rs 2479.64 crore with gross sales of Rs 3431.60 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.91 crore against gross selling of Rs 0.33 crore.

 

The US markets ended higher on Thursday amid reports that the US and China have made progress toward a trade deal even as investors weighed data showing US economic growth slowed in the fourth quarter from above-trend rates. Asian markets are trading mostly in green on Friday on revived hopes of progress in US-China trade talks. Last hour buying mainly aided the Indian markets to end Thursday's session near intraday high levels. Buying was broadly witnessed in banking, finance, telecom and IT stocks. Today, the start of the new F&O series is likely to be in green amid firm cues from global markets. Traders will be getting encouragement with Commerce Minister Suresh Prabhu's statement that India's merchandise and services export would touch $540-billion mark this fiscal. He said exports are growing at a healthy pace and shipments of goods would reach over $330 billion. Similarly, services exports would touch about $200 billion. However, there may be some cautiousness with Crisil Research's report stating that India Inc's revenue growth is likely to halve in the fourth quarter due to slump in commodity prices but fall in input costs will shore up profitability of end-user industries. Crisil expects on-year corporate revenue growth for the current quarter to print at 8-9%, down sharply from the average of 16.5% in the previous three quarters. Meanwhile, industry body Assocham has called for reduction in corporation tax rates to 20 per cent from the current 30 per cent for large corporate and to 15 per cent from 25 per cent for micro, small and medium enterprises in the next five years. There will be some reaction in some banking sector stocks with report that five state-owned banks, including PNB, Bank of Baroda and Union Bank, received shareholders' approval for capital infusion to the tune of Rs 21,428 crore in lieu of preferential allotment of shares to the government. This capital infusion is for the current fiscal ending March 31, 2019. There will be some buzz in the cement industry stocks with ICRA's report that India's cement industry saw a 13.6% year-on-year increase in volume to 275.7 million metric tonnes in the first ten months of the current fiscal, driven largely by rural and affordable housing. The growth was almost double the 7% increase forecast by the agency. Besides, Rail Vikas Nigam is all set to launch its initial public offering (IPO) for subscription today and it will close on April 3. The price band has been fixed at Rs 17 - Rs 19 per share. The issue is entirely an offer for sale (OFS) of 25.35 crore shares (12.2 per cent of post-dilution equity) by Government of India.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,570.00

11,485.47

11,621.52

BSE Sensex

38,545.72

38,264.89

38,710.10

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

SBI

632.45

319.00

305.48

336.08

Yes Bank

480.78

276.10

270.37

279.77

NTPC

412.33

135.75

134.12

138.37

IOC

294.33

161.30

159.73

163.48

ONGC

254.92

155.90

153.98

159.03

 

  • Coal India's subsidiary -- Northern Coalfields has completed the 100-million-tonne production milestone, which also happens to be the target for the current fiscal 2018-19. 
  • L&T has dispatched the country's heaviest hydrocracker, weighing 1,858 tonne, ahead of schedule to HPCL for its Visakh refinery. 
  • M&M has decided to increase price of its range of personal and commercial vehicles by 0.5% - 2.7%, resulting in an increase of Rs 5,000 - Rs 73,000, across its models. 
  • Tata Motors in partnership with Valvoline Cummins has launched their co-branded lubricants for the passenger cars segment.
News Analysis