Indian equity benchmarks ended
the volatile day with marginal gains on Monday. After a cautious start, key
indices traded volatile, as IHS Markit in its latest report stated that India's
real GDP growth in 2019-20 fiscal is expected to be slightly below 5% as the
impact of stimulus measures will take time to filter through to the economy.
Adding more worries among market participants, Former Reserve Bank of India's
(RBI) governor Raghuram Rajan said that India is in the midst of a growth
recession with signs of deep malaise in the Indian economy that is being run
through extreme centralisation of power in Prime Minister's Office and
powerless ministers. Despite volatility, markets managed to keep their heads above
their neutral lines for the most part of the session, aided by Finance Minister
Nirmala Sitharaman's statement that the government is working on more measures
to revive the sagging economy. Traders got some relief, after Chief Economic
Adviser KV Subramanian said that private investment is key to economic growth
and the recent cut in corporate tax rate was done to boost investments.
Further, the street took a note of the RBI's data report stating that India
Inc's foreign borrowings grew over two-fold to $3.41 billion in October over
the corresponding month a year ago. Finally, the BSE Sensex gained 42.28 points
or 0.10% to 40,487.43, while the CNX Nifty was up by 16 points or 0.13% to
11,937.50.
The US markets snapped 3-day
winning streak and ended lower on Monday. Lingering uncertainty about US-China
trade talks weighed on markets, as new 15 percent tariffs on $165 billion worth
of Chinese imports are currently still set to take effect this coming Sunday.
The new round of tariffs could throw a wrench into negotiations over a phase on
trade deal, which is reportedly being held up in part by a dispute over how
much to roll back existing tariffs. Rising tensions between the US and North
Korea also led to some caution among traders after North Korea conducted a very
important test at a long-range missile launch site. President Donald Trump
warned North Korean leader Kim Jong Un risks losing everything if he acts in a
hostile way, leading a North Korean official to describe the president as a
heedless and erratic old man. However, overall trading activity remained
somewhat subdued, with traders looking ahead to the Federal Reserve's monetary
policy announcement on Wednesday. The Fed is widely expected to leave interest
rates unchanged, although traders are still likely to pay close attention to
the accompanying statement for clues about the outlook for rates. A lack of
major US economic data also kept some traders on the sidelines ahead of the
release of reports on retail sales and consumer and producer prices in the
coming days.
Crude oil futures ended
marginally lower on Monday on concerns over the outlook for energy demand after
data showed another drop in Chinese exports and on uncertainty about the US and
China signing a phase one deal before the commencement of the next round of
tariff hikes. Besides, traders remained on sidelines ahead of the Federal
Reserve's monetary policy statement, due on Wednesday. Traders were also
looking ahead to the first policy meeting of new ECB President Christine
Lagarde. Benchmark crude oil futures for January declined 18 cents or 0.3
percent to settle at $59.02 a barrel on the New York Mercantile Exchange.
January Brent dropped 14 cents or 0.2 percent to settle at $64.25 a barrel on
London's Intercontinental Exchange.
Indian
rupee ended stronger against dollar for the fourth straight day on Monday, on
increased selling of the US currency by exporters and banks. Investors got
support with Former Union minister Suresh Prabhu's statement that startups are
going to play a vital role in making India a $5 trillion economy. He also said so,
when we talk about $5 trillion economy, it will be largely from the startups.
It is inevitably bound to happen all over the world, thankfully our prime
minister realised it and had that vision to understand the changing economic
scenario of the Indian economy. Dollar losing sheen against some other
currencies overseas also supported the forex sentiment. However, gains remain
capped as anxiety remained among the traders with IHS Markit in its latest
report stating that India's real GDP growth in 2019-20 fiscal is expected to be
slightly below 5% as the impact of stimulus measures will take time to filter
through to the economy. On the global front, British pound hit 31-month highs
against the euro on Monday and hit seven-month highs against the US dollar amid
growing confidence about a Conservative Party victory in Thursday's U.K.
elections, which would end political paralysis on Brexit. Finally, the rupee
ended at 71.04, 15 paise stronger from its previous close of 71.20 on Friday.
The
FIIs as per Monday'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
4515.34 crore against gross selling of Rs 4589.30 crore, while in the debt
segment, the gross purchase was of Rs 1372.85 crore with gross sales of Rs
900.22 crore. Besides, in the hybrid segment, the gross buying was of Rs 17.41
crore against gross selling of Rs 11.59 crore.
The US markets ended in red on
Monday as investors kept a close eye on trade negotiations ahead of Sunday's
tariff deadline and policy updates from global central banks. Asian markets are
trading mostly lower on Tuesday as investors refrained from making major bets
before December 15, when the next round of US tariffs on Chinese imports is due
to take effect. Indian markets ended a range-bound session marginally higher on
Monday supported by buying in blue-chip stocks such as HDFC, Reliance
Industries, Maruti Suzuki India, and Axis Bank. Today, the markets are likely
to make flat-to-positive start. Some encouragement will come as Chief Economic
Advisor KV Subramanian stated that the current slowdown in the Indian economy
is more cyclical than structural in nature and the government has a
well-thought-out agenda for reforms. He noted that the country's potential
growth remains unaltered and things will improve soon. Some support will also
come with the Indian envoy to the US' statement that India took only five years
to move from a $2 trillion to $3 trillion economy, and he exuded confidence
that the country would touch the $5 trillion mark in the coming years. Traders
may take note of Commerce and Railways Minister Piyush Goyal's statement that
after clarity over angel tax, simpler regulations and more funds could be in
offing for startups. However, there may be some cautiousness with report that
the Central GST collection fell short of the budged estimate by nearly 40 per
cent during the April-November period of 2019-20. Traders may react to a
private report indicating that India is expected to witness a marginal 7 per
cent rise in job creation in the October-March period of this financial year,
as subdued economic conditions have dampened employment outlook. There will be
some buzz in the telecom stocks with CRISIL Ratings' report that a tariff
uptick of upto 50% in the telcom sector may double the industry's operating
revenue by next fiscal. The rating firm concluded that revised tariffs will
improve the average revenue per user (ARPU)- a key industry metric and every Rs
one increase in ARPU will add to Rs 1000 crore to industry's EBIDTA. Banking
stocks will be in focus with Minister of State for Finance Anurag Singh
Thakur's statement that public sector banks (PSBs) returned to profitability in
2019-20, posting an aggregate profit of Rs 3,221 crore in the first half ending
September. There will be some reaction in insurance stocks with a report that
life insurance companies saw a 37.2 percent Y-o-Y growth in their eight-month
(April to November) period new premiums at Rs 1.69 lakh crore compared to a
year ago.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,937.50
|
11,889.72
|
11,983.62
|
BSE Sensex
|
40,487.43
|
40,334.12
|
40,643.19
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
3,148.40
|
56.25
|
53.72
|
58.82
|
SBI
|
524.35
|
316.70
|
311.75
|
324.65
|
Maruti Suzuki India
|
14.80
|
6,994.75
|
6,928.73
|
7,084.38
|
Reliance Industries
|
57.80
|
1,572.60
|
1,553.60
|
1,584.50
|
HDFC
|
33.62
|
2,311.40
|
2,275.82
|
2,331.22
|
Maruti Suzuki India has increased its production by 4.33 percent in November.
Bharti Airtel's promoter -- Bharti Telecom has sought government nod for the infusion of Rs 4,900 crore investment from Singapore-based Singtel and other foreign entities.
Tata Motors' wholly owned subsidiary -- JLR has reported 3.4% fall in total sales at 46,542 units in November as compared with year-ago period.
JSW Steel's crude steel production declined 7 percent to 12.90 lakh tonne during November 2019.