Snapping four days winning
streak, Indian equity benchmarks ended the Thursday's trade in red with
marginal losses, after the Reserve Bank of India (RBI) cut its growth estimate
for the current fiscal on Wednesday and warned that any economic stimulus and farm
debt waivers could push up fiscal deficit by 1 percentage point, potentially
stoking inflation. Markets started off on optimistic note, but soon gave up all
of their gains to turn red and traded flat-to-negative. Fresh selling in the
last leg of trade mainly dragged the frontline indices below their crucial
9,900 (Nifty) and 31,600 (Sensex). Investors remained cautious on foreign
brokerage report that the sentiment of foreign portfolio investors towards
India is likely to remain weak until corporate earnings recovery sets in. This, coupled with high equity supply, would
mean that the market performance will remain subdued until the end of the year.
FPIs have pulled out over Rs 24,000 crore from Indian equities since August due
to disappointment over economic growth, delay in earnings recovery, expensive
valuation and geopolitical tensions. However, losses remained capped on report
that Nikkei India Services Purchasing Managers' Index rose to 50.7 in September
from 47.5 in August. India's service sector PMI marked below the 50.0 neutral
level in the previous two months due to the goods and services tax (GST)
introduced in July. According to the PMI survey, greater workloads supported
job creation in September, with the rate of employment growth the strongest
since June 2011. Traders also took some solace with NITI Aayog CEO Amitabh
Kant's statement that while there has been a ‘little bit of dip' in the Indian
economy, it is now bouncing back. Prime Minister Narendra Modi too has asserted
that the economy is much better than critics make it out to be and that his
government is ‘totally committed' to reverse the slowdown in GDP growth in
recent quarters. Finally, the BSE Sensex lost 79.68 points or 0.25% to
31,592.03, while the CNX Nifty was down by 26.20 points or 0.26% to 9,888.70.
The US markets closed at all-time
highs on Thursday, after Congress passed a budget resolution - a step seen as
setting the stage for an overhaul of the tax code. After a House vote, the
Senate approved a budget bill. Republicans passed tax cuts through what is
known as budget reconciliation, which requires just a simple majority in the
Senate. On the economy front, the US trade deficit dropped 2.7% in August to
$42.4 billion from $43.6 billion in July. Imports slipped 0.1% to $237.7
billion. Exports rose 0.4% to $195.3 billion. The trade deficit shrank mainly
because of higher US exports of drugs, semiconductors and equipment for phone
networks. Imports were essentially unchanged. Imports of goods from China set a
fresh record at $45.8 billion. Meanwhile, factory orders rebounded 1.2% in
August after a sharp decline in the prior month. Orders for durable goods,
about half of all orders, rose a revised 2% in August compared with the prior
estimate of a 1.7% gain. The Dow Jones Industrial Average added 113.75 points
or 0.50 percent to 22,775.39, the Nasdaq gained 50.73 points or 0.78 percent to
6,585.36, and the S&P 500 edged higher by 14.33 points or 0.56 percent to
2,552.07.
Crude oil futures bounced back
and ended higher on Thursday, as concerns over an uptick in U.S. and Libyan
production were offset by talks of an extension to the Opec-led deal to curb
output. The prices were supported by Saudi King Salman's visit to Moscow that fuelled
expectations that the two nations would discuss a possible extension to the
global pact to curb output. Investors weighed the possibility of an extension
to the Opec-led deal against expectations that growing output in the US and
Libya could weigh on oil prices. Though, traders continued weighing this week's
U.S. inventories data that capped the gains. Benchmark crude oil futures for November
delivery ended higher by $0.81 or 1.6 percent at $50.79 a barrel on the New
York Mercantile Exchange. Brent crude for November delivery gained 2.00 percent
to $56.94 a barrel on the ICE.
Indian
rupee depreciated marginally against dollar on Thursday, due to fresh dollar
demand from banks and importers amid foreign fund outflows. Sentiments remained
subdued as the RBI cut the economic growth forecast for the current fiscal to
6.7% from its August forecast of 7.3% in view of issues with GST implementation
and lower Kharif output estimates. Besides, dollar's renewed strength against
other currencies overseas and weak trade in the local equity market also hit
the sentiment of rupee. On the global front, pound took a tumble on Thursday
amid a cocktail of bad news including weak car sales data and S&P comments
questioning whether the UK economy could handle an interest rate hike. Finally,
the rupee ended at 65.15, 10 paise weaker from its previous close of 65.05 on
Wednesday.
The
FIIs as per Thursday's data were net sellers in equity segment, while they were
net buyers in debt segment. In equity segment, the gross buying was of Rs
3978.38 crore against gross selling of Rs 4488.97 crore, while in the debt
segment, the gross purchase was of Rs 2172.46 crore with gross sales of Rs
514.23 crore.
The US markets continued their
northbound move and the major averages extended a recent upward trend, once
again reaching new record closing highs on batch of largely upbeat U.S.
economic data as well as optimism about the outlook for tax reform. The Asian
markets have made a green start taking cues from the US markets after comments
from Federal Reserve officials helped ratchet up bets that the U.S. economy is
strong enough to withstand higher interest rates. The Indian markets gave up
their hard accumulated gains in the final hours to make a close in negative
territory in last session, snapping a four-day winning streak. Today, the start
is likely to see some recovery tailing the positive global cues, though all
eyes will be on GST Council meeting, which is expected to push through a raft
of relief measures for small and medium enterprises. Traders will also be
getting some support with Commerce and Industry Minister Suresh Prabhu's
statement that he is working closely with the finance ministry and other
departments to firm up policy initiatives along with fiscal incentives to give
a fillip to industrial growth and job creation. Meanwhile, Minister of Railways
and Coal Piyush Goyal has said that India is undergoing a change in the
economic narrative and rebranding itself with technology driving growth. The
aviation stocks will be in action on report that India`s domestic passenger
traffic grew by 16 percent in August. India`s domestic demand -- revenue
passenger kilometres (RPK) -- was highest amongst major aviation markets like
Australia, Brazil, China, Japan, Russia and the US. There will be some buzz in
the garment sector stocks, as the government has slashed duty drawback to two
per cent from 7.5 per cent with effect from October 1.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9888.70
|
9865.05
|
9929.15
|
BSE Sensex
|
31592.03
|
31512.05
|
31722.21
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
SBI
|
134.77
|
251.60
|
249.17
|
254.07
|
NTPC
|
115.80
|
171.10
|
168.73
|
172.53
|
ICICI Bank
|
109.75
|
271.80
|
269.47
|
275.77
|
Yes Bank
|
105.53
|
359.45
|
355.13
|
365.63
|
Power Grid
|
97.61
|
204.95
|
202.93
|
208.18
|
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