Tuesday turned out to be a dismal
day of trade for Indian equity benchmarks with frontline gauges breaching their
crucial 10,250 (Nifty) and 33,300 (Sensex) levels, as traders opted to book
profit after three day of continuous rally. After a feeble opening, markets
never looked confidant and extended their southward journey to at day's lows,
as traders remained on sidelines ahead of Index of Industrial Production (IIP)
data for October and inflation data based on consumer price index (CPI) for
November to be released later in the day. A private poll showed that India's
retail inflation likely breached the central bank's 4% medium-term target in
November after unseasonably heavy rains sent food prices soaring. The poll
enlightened that the higher inflation rate is unlikely to push the Reserve Bank
of India (RBI) to change its key rate any time soon. Traders failed to get any
sense of relief with the UN DESA's World Economic Situation and Prospects 2018
report, which said that despite a slowdown observed in early 2017, the outlook
for India remains positive, underpinned by strong private consumption, robust
public investments and structural reforms. Selling got accelerated in second
half of trade, as traders failed to hold their nerves. Sentiments remained
pessimistic with report that foreign investors offloaded shares worth of over
Rs 4,000 crore from domestic equity markets this month so far on account of
rising crude prices and widening fiscal deficit. Investors took note of
ASSOCHAM report enlightening that the government needs to accord top priority
to agriculture in the budget as a major shortfall in kharif production resulted
in sluggish growth of farm sector in the second quarter this fiscal. While the
year-to-year agriculture Gross Value Addition (GVA) growth for the
July-September quarter of 2017-18 dropped to 1.7% from 4.1%, measured on basic
prices, the fall looks quite sharp at current prices from 10% to 3.7%.
Meanwhile, with the farm loan waiver pitch getting shriller by the day, former
RBI governor Y V Reddy has said that the practice is not good for economic or
credit culture and insisted that ultimately it is a political decision and
cannot be justified in the longer run. Finally, the BSE Sensex declined 227.80
points or 0.68% to 33,227.99, while the CNX Nifty was down by 82.10 points or
0.80% to 10,240.15.
The US markets closed mostly
higher on Tuesday, with the S&P 500 and Dow at records for a fourth session
in a row, but the Nasdaq bucked the trend to head south as the Federal Reserve
kicked off its two-day meeting. The central bank's Federal Open Market
Committee is widely expected to announce its third and final interest-rate hike
of 2017 on Wednesday, but investors want to see what the policy-making body
signals about 2018. The announcement will be followed by departing Fed chief
Janet Yellen's last news conference in that role. On the economy front, the US
government ran a budget deficit of $139 billion in November, up just 1% from
the same month a year ago. Spending rose 3% in the month, and revenues climbed
4%. Some of the biggest drivers of spending in November were for Homeland
Security and interest on the public debt. Homeland Security spending more than
doubled from last November to $9 billion. Meanwhile, the index of
small-business optimism from the National Federation of Independent Business
rose 3.7 points to 107.5 in November, the second-highest reading in the 44-year
history of the index. The Dow Jones Industrial Average added 118.77 points or
0.49 percent to 24,504.80, the S&P 500 edged higher by 4.12 points or 0.15
percent to 2,664.11, while the Nasdaq lost 12.761 points or 0.19 percent to
6,862.32.
Crude oil futures snapped their
gaining streak and ended lower on Tuesday, mainly due to profit taking, amid
reports offering clarity on the duration of the Forties pipeline shutdown,
which forced traders to take profits on Monday's rally in oil prices. Also, investors
continued to fear that the widening Brent-WTI spread would boost demand for US
exports, encouraging producers to ramp up output. Meanwhile, the Energy
Information Administration (EIA) said it expects U.S. crude production to rise
by an average of 800,000 barrels a day next year. Benchmark crude oil futures
for January delivery ended lower by $0.85 or 1.5 percent at $57.14 a barrel on
the New York Mercantile Exchange. Brent crude for February delivery was down by
2.1 percent to $63.35 a barrel on the ICE.
Indian
rupee pared some of its early losses but still ended marginally weaker against
the American currency on Tuesday, due to fresh dollar demand from banks and
importers. Traders remained cautious ahead of key economic data that is October
IIP and November CPI, scheduled to be released later in the day. Investors even
overlooked the UN DESA's World Economic Situation and Prospects 2018 report,
which said that despite a slowdown observed in early 2017, the outlook for
India remains positive, underpinned by strong private consumption, robust
public investments and structural reforms. Besides, massive losses in domestic
equity markets too weighed on the rupee, but dollar's reduced clout against
other currencies overseas helped to cap the losses. On the global front, dollar
declined against most major currencies as the US Federal Reserve geared up for
a two-day policy meeting at which it is widely expected to raise interest rates
for the fifth time since late 2015. Finally, the rupee ended at 64.40, 4 paise
weaker from its previous close of 64.36 on Monday.
The FIIs as per Tuesday'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 4897.42 crore against gross
selling of Rs 5033.63 crore, while in the debt segment, the gross purchase was
of Rs 1457.24 crore with gross sales of Rs 776.66 crore.
The US markets made a mixed
closing in the last session, with the S&P 500 and Dow ending at fresh at
records for a fourth consecutive session, while tech heavy Nasdaq ending
marginally in red. Traders were cautious with the start of the central bank's
Federal Open Market Committee two days meeting. The Asian markets have made a
mixed start and some of the indices are down by about half a percent, with investors
awaiting central bank decisions in Europe and America for clues on the policy
path for next year. The Indian markets snapping their three days gaining streak
ended considerably lower in the last session, ahead of the macro data on
inflation and industrial output. Today, the start is likely to be somber, as in
a double whammy to the economy, industrial output growth slowed down to 2.2
percent in October while retail inflation soared to 15-month high of 4.88
percent in November. Traders will be more concerned with the spike in
inflation, as the higher inflation rate is unlikely to push the Reserve Bank of
India (RBI) to change its key rate any time soon. Meanwhile, the Finance
Ministry has concluded that several businesses have claimed high transitional
input tax credit under the GST regime without any bonafide explanation to back
such claims. Traders however may get some support with a private survey report,
stating that India is the third most optimistic nation in hiring intentions as
22 percent of employers are expected to add more staff in the next three
months. It further said that workforce gains were expected across all seven
industry sectors monitored and in all four regions. Tourism and hotel stocks
will be in focus on a tourism ministry report that more than 10 lakh foreign
tourists visited India in November 2017, a rise of 14.4 per cent over the same
period last year. FTAs during the period between January and November this year
were 90.01 lakh, with a growth of 15.6 per cent over the same period the
previous year.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,240.15
|
10204.87
|
10300.77
|
BSE Sensex
|
33227.99
|
33119.02
|
33397.68
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
SBI
|
176.59
|
318.45
|
315.23
|
321.08
|
Vedanta
|
122.61
|
293.15
|
290.13
|
298.03
|
ICICI Bank
|
119.95
|
307.60
|
305.15
|
311.20
|
ITC
|
92.43
|
261.55
|
259.63
|
264.33
|
NTPC
|
78.74
|
175.90
|
174.58
|
177.53
|
Dr. Reddy's Laboratories has received the EIR from the USFDA for its Formulations Manufacturing Plant - 3 at Bachupally, Hyderabad as closure of audit.
Tata Motors is all set to display six new construction and mining commercial vehicles from its 'Construck' range at EXCON-2017.
Bharti Airtel has rolled out 4G services in Dras, Kargil and Leh in the Ladakh region.
GAIL India will import about 5 MT of LNG from the US next fiscal, replacing the volumes the state-owned utility buys from the spot market.