Indian equity bourses failed to
take any sense of relief from the Reserve Bank of India's (RBI) repo rate cut
on Thursday, as Sensex and Nifty settled with losses of around 200 and 50
points, respectively. The RBI in its First Bi-Monthly Monetary Policy
Statement, 2019-20, has cut the policy repo rate under the liquidity adjustment
facility (LAF) ) by 25 basis points (bps) to 6.0% from 6.25% earlier for the
second time in a row. After a cautious start, key indices remained lackluster
throughout the session, amid a private report stating that Indian businesses
are getting squeezed. As economic growth slows and inflation sinks they have
little ability to raise prices without losing sales, and yet they are getting
almost no relief from borrowing costs with lending rates remaining high. Adding
more worries among traders, India's services sector grew at slower pace, on the
back of a slower expansion in new work. As per the survey report, the
seasonally adjusted Nikkei Services Business Activity Index eased to 52 in
March from 52.5 in February. Further, the Nikkei India Composite PMI Output
Index -- which measures both manufacturing and services -- also slipped to 52.7
in March as against 53.8 in February. The markets extended their losses in the
second half of the session to settle in red territory, after RBI Governor
Shaktikanta Das said that even though the headline credit demand is growing at
a healthy 14 percent, it is not broadbased while those to MSMEs have been muted
so far. Das further said the RBI will continue to watch macroeconomic factors
and will act timely on the same. Market participants overlooked Commerce and
Industry Minister Suresh Prabhu's statement that India's exports are expected
to reach $32.38 billion in March, the highest in any month so far, on account
of healthy growth in sectors such as pharmaceuticals. He said that exports
would cross $331 billion mark in the 2018-19 fiscal year. The street also paid
no heed towards Vice President M Venkaiah Naidu's statement India would
continue to grow at a higher economic growth rate until 2021, while citing the
World Bank estimates. World Bank estimates suggest that India would continue to
grow at a high rate until 2021. Finally, the BSE Sensex declined 192.40 points
or 0.49% to 38,684.72, while the CNX Nifty was down by 45.95 points or 0.39% to
11,598.00.
The US markets ended mostly
higher on Thursday as investors continued to monitor trade talks between the US
and China, which are reportedly in their final stretch. Meanwhile, Trump said
the China talks were moving along nicely even while taking yet another swipe at
the Federal Reserve for raising interest rates last year. At the same time, there
are reportedly major hurdles to overcome regarding US desires to maintain some
tariffs on Chinese goods as a means to ensure Chinese adherence to any deal.
Besides, New York Fed President John Williams said that current monetary policy
is appropriate for how the economy is performing. He also added that changes in
long-run economic fundamentals, like lower growth potential and projected
inflation, means that interest rates are likely to be lower for longer than
what we saw in the 1990s. On the economic front, with the more closely watched
monthly jobs report looming, the Labor Department released a report showing an
unexpected decrease in first-time claims for US unemployment benefits in the
week ended March 30. The report said initial jobless claims dipped to 202,000,
a decrease of 10,000 from the previous week's revised level of 212,000. The
drop surprised participants, who had expected jobless claims to inch up to
216,000 from the 211,000 originally reported for the previous week. With the
unexpected decrease, initial jobless claims fell to their lowest level since
hitting a matching number in December of 1969. The Labor Department said the
less volatile four-week moving average also edged down to 213,500, a decrease
of 4,000 from the previous week's revised average of 217,500. Dow Jones
Industrial Average surged 166.50 points or 0.64 percent to 26384.63 and S&P
500 was up by 5.99 points or 0.21 percent to 2879.39, while Nasdaq declined
3.77 points or 0.05 percent to 7891.78.
Crude oil futures ended lower for
second straight day on Thursday, while global benchmark Brent crude settled
higher after briefly trading above the $70-a-barrel threshold for the first
time since November. The upside was limited in part, amid broader financial
market cautiousness, as investors eagerly await what could be a breakthrough in
the trade negotiations between China and the US, though the final leg of
negotiations has proven the most contentious. Benchmark crude oil futures for
May dropped 36 cents or 0.6 percent to settle at $62.10 a barrel on the New York
Mercantile Exchange. However, June Brent
crude gained 9 cents or 0.1 percent to settle at $69.40 a barrel on London's
Intercontinental Exchange.
Snapping 3-day winning streak, Indian rupee ended
considerably weaker against the American currency on Thursday, after the
Reserve Bank of India delivered widely anticipated second rate cut of the year,
but refrained from shifting to a more easy stance on monetary policy. Traders
remain worried with the data indicating that the India's services sector grew
at slower pace, on the back of a slower expansion in new work. As per the
survey report, the seasonally adjusted Nikkei Services Business Activity Index
eased to 52 in March from 52.5 in February. Further, the Nikkei India Composite
PMI Output Index -- which measures both manufacturing and services -- also
slipped to 52.7 in March as against 53.8 in February. On the global front,
dollar rose on Thursday as market players gained optimism amid the global trade
situation and the U.S. jobs statistics. Finally, the rupee ended at 69.17, Rs
1.30 weaker from its previous close of 68.41 on Wednesday.
The FIIs as per Thursday's data
were net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 5965.39 crore against gross selling of Rs 6797.66 crore, while
in the debt segment, the gross purchase was of Rs 4034.77 crore with gross
sales of Rs 6212.74 crore. Besides in the hybrid segment, the gross buying was
of Rs 7.09 crore against gross selling of Rs 1.22 crore.
The US markets ended mostly
higher on Thursday as investors watched for more details about a potential
trade deal between China and the US, while there was some cautiousness ahead of
US payrolls data. Asian markets are trading in green in thin trade on Friday,
following gain on Wall Street, amid holiday in China and Hong Kong. Indian
markets extended their losses for second straight session on Thursday and
settled lower with losses of around half a percent, after the Reserve Bank of
India (RBI) cut its repo rate by 25 bps, as widely expected, but trimmed the
growth and inflation outlook, saying the domestic economy is facing headwinds,
especially on the global front. Today, the markets are likely to open in green
tracking gains in Asian peers. Traders will be getting encouragement with
Finance Secretary Subhash Chandra Garg's statement that the government is close
to meeting fiscal deficit target of 3.4 per cent for 2018-19. The government in
the interim Budget in February revised upward the fiscal deficit target to 3.4
per cent from 3.3 per cent of Gross Domestic Product (GDP) estimated earlier
for the financial year ended March 31. Some support will also come with report
that the Income Tax department said it added 1.07 crore new taxpayers while the
number of dropped filers came down to 25.22 lakh in 2017-18, showing the
positive impact of demonetisation. However, there may be some cautiousness as
Fitch Ratings kept India's sovereign rating unchanged at the lowest investment
grade of BBB- with a stable outlook. This is the 13th year in a row that Fitch
has rated India at BBB-. Fitch had last upgraded the rating from BB+ to BBB-
with a stable outlook on August 1, 2006. It said India's ratings balance a
strong medium-term growth outlook and relative external resilience stemming from
strong foreign reserve buffers, against high public debt, a weak financial
sector and some lagging structural factors. Meanwhile, Chief Economic Advisor
Krishnamurthy Subramanian has said the government and the RBI will work
together to ensure smooth implementation of the Supreme Court's recent ruling
on the central bank's stressed assets circular but ruled out changes in the
Insolvency and Bankruptcy Code (IBC) due to the ruling. There will be some buzz
in the banking sector stocks with report that the RBI said it will hold further
discussions with banks on linking interest rates on personal, home, auto and
MSME loans with various benchmark rates, a move that would further delay
issuance of final guidelines on the issue. Also, there will be some reaction in
agriculture related stocks with report that India has issued a combined 650,000
tonne import quota for pulses for the fiscal year to March 2020, allowing
overseas purchases of protein-rich pulse varieties that are a staple of Indian
cuisine.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,598.00
|
11,550.62
|
11,653.97
|
BSE Sensex
|
38,684.72
|
38,530.72
|
38,889.03
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
420.04
|
268.05
|
263.70
|
273.70
|
Tata Motors
|
412.69
|
206.15
|
202.50
|
208.35
|
SBI
|
278.32
|
321.80
|
318.15
|
325.60
|
Indiabulls Housing Finance
|
210.62
|
898.15
|
878.57
|
911.32
|
ZEEL
|
187.96
|
417.30
|
398.87
|
427.87
|
Reliance Industries' subsidiary -- Reliance Jio Digital Services has entered into a definitive business transfer agreement with Haptik Infotech.
Bharti Airtel has launched of its e-book services which will be offered to subscribers through mobile app Airtel Books.
NTPC's Vindhyachal Thermal Power Station has generated record 37,538.97 million units in 2018-19.
Maruti Suzuki India has reported 20.9% fall in its production to 136,201 vehicles in March 2019, as compared to 172,195 vehicles in March 2018.