Dalal Street bade adieu to the Calendar Year 2019 on a weak note, with Sensex & Nifty closing lower by over 0.70% each. After a sluggish start, indices remained negative throughout the session, amid a private report that the government might breach the fiscal deficit target this financial year amid drop in the revenue mobilisation and expected additional expenditure by the government. Adding more worries, rating agency ICRA stated that muted economic growth, lower working capital requirements and risk aversion among lenders have compressed the incremental credit growth in current financial year (April 2019 to March 2020). In last leg of the trade, markets extended losses, as Ind-Ra said that the aggregate fiscal deficit of states will touch 3 per cent gross domestic product in FY20 against the budgeted figure of 2.6 per cent. The fiscal slippage will originate from a decline in tax revenue, a lower nominal GDP & higher expenditure. The street overlooked Secretary in DPIIT, Guruprasad Mohapatra's statement that enthused by a record foreign investment inflow, India is optimistic of continuing to be one of the world's favourite FDI destinations in 2020 on the back of the Modi government's liberalised norms & a significant jump in ease of doing business ranking. Finally, the BSE Sensex lost 304.26 points or 0.73% to 41253.74, while the CNX Nifty was down by 87.40 points or 0.71% to 12168.45.

The US markets ended higher with gains of over quarter a percent on the final trading day of 2019, on the back of positive report on the international trade front, as President Donald Trump said that the phase one trade deal will be signed during a White House ceremony on January 15th. Earlier Tuesday, trade adviser Peter Navarro said that the deal was in the bank and that the Trump administration was just waiting to review a Chinese translation of the 86-page agreement.  Besides, for the year, the Nasdaq spiked by 35.2 percent and the S&P 500 soared by 29.6 percent, recording their best gains since 2013. The Dow also jumped by 22.3 percent, turning in its best year since 2017. However, the New Year's Day holiday on Wednesday kept some traders away from their desks, contributing to quiet trading session. On the economic front, a report released by the Conference Board showed US consumer confidence dipped from an upwardly revised level in the month of December. The Conference Board said its consumer confidence index edged down to 126.5 in December from an upwardly revised 126.8 in November. Street had expected the consumer confidence index to rise to 128.2 from the 125.5 originally reported for the previous month. The report said the expectations index slid to 97.4 in December from 100.3 in November, as consumers were moderately less upbeat about the short-term outlook. The percentage of consumers expecting business conditions to improve over the next six months inched up to 18.9 percent from 18.6 percent, while those expecting conditions will worsen fell to 9.3 percent from 11.4 percent.

Crude oil futures ended lower in the final trading session of 2019, but logged the biggest yearly gains for both major crude benchmarks in three years.  WTI, the US benchmark, logged a 2019 gain of 34.5%, its strongest since a 45% rally in 2016. Brent, the global benchmark, advanced 22.7% this year, its biggest yearly gain since a 52.4% jump in 2016. Tensions in the Middle East, the extended output cuts by OPEC and allies, easing concerns about outlook for energy demand following positive developments on Sino-US trade front contributed to oil's rise in recent sessions. Crude oil futures for February dropped 62 cents or 1 percent to settle at $61.06 a barrel on the New York Mercantile Exchange. March Brent fell 67 cents or 1 percent to settle at $66 a barrel on London's Intercontinental Exchange.

Indian rupee ended marginally lower against dollar on Tuesday, due to fresh demand for the American currency from banks and importers. Trading sentiments remained weak with India Ratings and Research (Ind-Ra) stating that the aggregate fiscal deficit of states will touch 3 per cent gross domestic product (GDP) in FY20 against the budgeted figure of 2.6 per cent. The fiscal slippage will originate from a decline in tax revenue, a lower nominal GDP and higher expenditure. Subdued domestic equity markets and high crude oil prices also weighed on the domestic unit. However, losses remain capped as some optimism remained among the traders with Secretary in the DPIIT Guruprasad Mohapatra's statement that enthused by a record foreign investment inflow, India is optimistic of continuing to be one of the world's favourite FDI destinations in 2020 on the back of the Modi government's liberalised norms and a significant jump in the ease of doing business ranking. On the global front, euro and British pound rose as the dollar weakened on Tuesday as investors saw global growth improving next year, with the United States and China due to finally sign a Phase 1 trade agreement this week. Finally, the rupee ended at 71.36, 5 paise weaker from its previous close of 71.31 on Monday.

The FIIs as per Tuesday'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 3849.75 crore against gross selling of Rs 3571.04 crore, while in the debt segment, the gross purchase was of Rs 2684.07 crore with gross sales of Rs 3803.29 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.39 crore against gross selling of Rs 2.97 crore.

The US markets ended higher as President Donald Trump said that Phase 1 of trade deal with China would be signed on January 15 at the White House. Most of the Asian markets are closed on Wednesday on account of the New Year holiday. Indian markets ended last day of CY19 in the red with investors shying away from taking fresh positions on concerns that the government will breach its fiscal deficit target.  Today, the start of the New Year is likely to be soft-to-cautious on sluggish regional cues. Traders may remain concern with Controller General of Accounts in its latest data showing that Fiscal deficit of the Union government rose to 114.8 per cent of the target in the first eight months of the fiscal year. The gap between the government's revenue and spending stood at Rs 8.07 trillion at the end of November - Rs 1 trillion (13 per cent) more than the full-year target. Also, there will be some concern on report that the output of eight core infrastructure industries contracted for the fourth consecutive month in November by 1.5 per cent. Since August, the eight core industries are recording negative growth. The output of coal, crude oil, natural gas, steel, and electricity declined by 2.5 per cent, 6 per cent, 6.4 per cent, 3.7 per cent and 5.7 per cent respectively. However, some respite may come later in the day on report that India's current account deficit (CAD) narrowed to 0.9 per cent of GDP, or $6.3 billion, in the September 2019 quarter, on account of lower trade deficit. It had stood at 2.9 per cent of gross domestic product (GDP), or $19 billion, in the corresponding quarter of 2018-19. On a sequential basis, CAD had printed 2 per cent of GDP, or $14.2 billion, in the June 2019 quarter. Traders will be getting some encouragement with Finance Minister Nirmala Sitharaman unveiling Rs 102 trillion of infrastructure projects, including Mumbai - Ahmedabad High Speed rail, in the next five years to help achieve the target of $5 trillion (around Rs 356 trillion) economy by 2025. There will be some reaction in energy sector related stocks on report that to improve energy access and sustainability, the Central government's National Infrastructure Pipeline (NIP) to enhance its focus on the power sector with more than Rs 24 trillion of investment envisaged for the sector. The government expects major private players to contribute a major share. There will be some buzz in the NBFC stocks with the Reserve Bank of India (RBI) extending the availability of relaxed terms for sale of assets by non-bank lenders to banks to June 30, 2020. The dispensation was earlier set to expire on December 31, 2019. The rules for securitisation transactions were first relaxed on November 29, 2018, months after a liquidity crisis emerged in the wake of the collapse of the Infrastructure Leasing & Financial Services (IL&FS) group.

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

Nifty Top volumes

• NTPC has added capacity of 800 MW unit of Darlipali Super Thermal Power Project to Installed Capacity of company on successful completion of Trial Operation.
•  Reliance Industries has started its web portal Jiomart.
•  Hero MotoCorp has launched the first BS-VI motorcycle in the entry segment - the HF Deluxe BS-VI.
•  Indian Oil Corporation will invest over Rs 222 billion on the long-awaited capacity expansion and upgradation project for its Gujarat refinery on the outskirts of Vadodara.