Daily Newsletter
NSE Intra-day chart (01 November 2016)
Top Gainers
Company NameClose% Change
Top Losers
Company NameClose% Change
World Indices
IndicesLast Trade% Change
Indices
IndicesLast Trade% Change
FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
Equity
Debt
Equity
Debt
Equity
Debt
 
Market Commentary 02 November 2016
Markets likely to make soft start on weak global cues

 

Indian stock markets finished the session on a dull note, as investors at large remained reluctant to build on long positions ahead of US elections which is due next week and US Federal Reserve meeting which starts today. Sentiments remained down-beat with the repot that the Centre's fiscal deficit ballooned to 83.9 per cent of the Budget Estimates (BE) in the first half of 2016-17, the highest in the first six months of a financial year since 1998-99, on account of elevated capital spending and higher salaries outgo. On revenue side, lower realisations from disinvestment and other streams hurt the exchequer. In absolute terms, fiscal deficit, the gap between expenditure and revenue, in first half of the current financial year was Rs 4.48 lakh crore. However, the downside risk for the frontline indices was limited by reports that manufacturing sector growth in India hit a 22-month high in October, driven by a sharp and accelerated increase in new orders, purchasing activity and output. The Nikkei Markit India Manufacturing Purchasing Managers' Index (PMI) - a gauge of manufacturing performance - rose to 54.4 in October from 52.1 in September, indicative of a robust improvement in manufacturing business conditions in the country. Some support also came with the report that core sector output rose to three months high by 5% in September, compared to growth of 2.4% in the year-ago period, on the back of a sustained growth in the steel sector and a rise in refinery products. Also, a private report has said Indian economy is expected to fare better in the second half of the current fiscal backed by uptick in sales and improved capacity utilisation, though fresh investments and new jobs creation may be a concern going forward. Meanwhile, Metal and mining stocks gained traction after the release of encouraging purchasing managers index data from China, the world's largest consumer of steel, copper and aluminum. Further, mixed reactions were witnessed in auto companies stocks after reporting October sales numbers. Maruti Suzuki India has registered a fall of 0.3% in its total car sales (Domestic + Export) for the month of October 2016 at 133,793 units, as against 134,209 units in October 2015. Ashok Leyland has reported an increase of 28% in October 2016 sales to 12533 units, as against 9803 units sold in the same period of last year. Finally, the BSE Sensex declined by 53.60 points or 0.19% to 27876.61, while the CNX Nifty up 0.55 points or 0.01% to 8,626.25.

 

The US markets closed lower on Tuesday, with the S&P 500 dropping for a sixth consecutive session to end at a nearly four-month low as investors grappled with a tightening presidential race, economic data, corporate earnings, and the Federal Reserve's monetary policy decision. Polls showed the race between Democratic nominee Hillary Clinton and Republican rival Donald Trump continues to tighten. Federal Reserve officials began a two-day policy meeting, which concludes on Wednesday, and are widely expected to leave rates unchanged on expectations the central bank will want to avoid influencing the outcome of the presidential election next week. On the economy front, outlays for US construction projects fell 0.4% in September. September spending of $1.15 trillion was 0.2% below a year ago. This is the first year-on-year decline in construction spending since July 2011. The government revised August's result up to 0.5% drop. In September, spending on private outlays fell 0.2%. Residential spending rose 0.5% but spending on nonresidential projects sank 1%. Investors were also digesting monthly car sales numbers. General Motors and Ford Motor Company reported their US sales slipped in October, hurt by fewer selling days and a cutback in fleet sales. The Dow Jones Industrial Average lost 105.32 points or 0.58 percent to 18,037.10, Nasdaq dropped 35.56 points or 0.69 percent to 5,153.58, while S&P 500 was down 14.43 points or 0.68 percent to 2,111.72.

 

Crude oil futures extended southward journey on Tuesday, hitting one-month lows on renewed doubts that Organization of the Petroleum Exporting Countries (OPEC) will back out of a plan to curb production. Iraq, Iran and others complain they should be exempt from any production quotas after years of losing market share due to war and sanctions. Crude prices also remained under pressure as U.S. gasoline prices pared an early rally sparked by a pipeline blast. Meanwhile, economic jitters in the US have been made worse by the prospect Hillary Clinton will squander the upcoming election. Benchmark crude oil futures for December delivery dropped 19 cents or 0.41 percent to close at $46.67 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for December delivery declined by 47 cents or 0.97 percent to $48.14 a barrel on the ICE.

 

Indian rupee appreciated against dollar on Tuesday due to increased selling of American currency by exporters and banks. Sentiments remained upbeat with the report that manufacturing sector growth in India hit a 22-month high in October, driven by a sharp and accelerated increase in new orders, purchasing activity and output. The Manufacturing PMI rose to 54.4 in October from 52.1 in September, indicative of a robust improvement in manufacturing business conditions in the country. Some support also came with Core sector output rose to three months high by 5 per cent in September, compared to growth of 2.4 per cent in the year-ago period, on the back of a sustained growth in the steel sector and a rise in refinery products. On the global front, yen retreated from its early highs against dollar after the Bank of Japan kept its monetary stimulus unchanged as widely expected, although it delayed the timing of inflation forecast. Finally, the rupee ended at 66.71, 6 paise stronger from its previous close of 66.77 on Friday.

 

The FIIs as per Tuesday's data were net sellers in equity and debt segments both. In equity segment, the gross buying was of Rs 4701.75 crore against gross sell of Rs 5569.44 crore, while in the debt segment, the gross purchase was of Rs 731.61 crore with gross sales of Rs 1837.10 crore.

 

The US markets closed in red terrain in last session, as tightening polls just a week before the US presidential election dampened sentiments and investors rethought their long-held bets on a Hillary Clinton victory. The Asian markets have made a subdued start with all the regional counters were trading in red, with major indices reeling with a cut of over a percent, as the acrimonious US presidential election campaign entered its final week. Traders shrugged off stronger-than-expected factory growth in China. The Indian markets ended flat on the back of profit booking by investors in last leg of trade as investors at large remained reluctant to build on long positions ahead of US elections. Today, the start is likely to be in red with markets following the footsteps of their Asian counterparts. Some support may come with ASSOCHAM's report that Indian economy is expected to fare better in the second half of the current fiscal backed by uptick in sales and improved capacity utilization, though fresh investments and new jobs creation may be a concern going forward. Meanwhile, Assocham has made a pitch to Finance Minister Arun Jaitley not to levy cess, but hike GST rate by 1-2 per cent to garner additional resources to compensate states for any revenue loss on rollout of the new regime from April next year. The telecom stocks will be in action, as the Department of Telecommunications (DoT) is now looking to herald second generation reforms like simplifying licences and launching electromagnetic field (EMF) portals to help people test the level of radiation from towers. There will be lots of earnings too to keep the markets buzzing.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

8,626.25

8,603.97

8,659.07

BSE Sensex

27,876.61

27,804.89

27,989.06

 

Nifty Top volumes

Stock

Volume

(in Lacs)

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

Hindalco Industries

177.22

156.95

151.27

161.07

ICICI Bank

106.14

275.35

273.32

278.57

Axis Bank

104.26

475.80

470.82

484.42

SBI

100.01

258.95

256.67

261.07

Tata Steel

94.74

417.70

404.55

427.40

  • ONGC's overseas arm - ONGC Videsh, has completed the acquisition of additional 11% interest in Russia's Vankor oilfield, taking its total stake to 26%.
  • Eicher Motors' motorcycle division has reported a 33% jump in total sales in October 2016 at 59,127 units, as against 44,522 units in the same month last year.
  • Maruti Suzuki India has registered a fall of 0.3% in its total car sales for the month of October 2016 at 133,793 units, as against 134,209 units in October 2015.
  • Tata Motors has reported a 21 percent growth in its October sales, driven by festive season demand.
  • Bharti Airtel is reportedly in talks with KKR and Canada Pension Plan Investment Board (CPPIB) to sell a significant stake in its listed tower arm Bharti Infratel.
News Analysis