Positive macroeconomic data gave
enough support to the Indian equity benchmarks on Thursday, as Sensex and Nifty
settled higher over 150 and 50 points, respectively. The markets made an
awesome start, after India's industrial production measured by Index of
Industrial Production (IIP) surged to 11-month high of 8.1% in the month of
October 2018 as against 4.5% in September 2018 and 1.8 percent in October 2017.
The trade also remained strong, on the back of easing inflation data. India's
retail inflation based on Consumer Price Index (CPI) cooled down to a 17-month
low of 2.33% in the month of November 2018, as compared to 4.88% in the same
month of previous year. The inflation softened mainly on account of decline in
prices of kitchen essentials like vegetables, eggs and pulses. Meanwhile,
Federation of Indian Export Organisations (FIEO) President Ganesh Kumar Gupta
urged newly-appointed the Reserve Bank of India (RBI) Governor Shaktikanta Das
to ensure smooth flow of credit to exports sector which is falling sharply on
year on year basis, affecting the liquidity of exporters particularly the
micro, small, and medium enterprises (MSMEs). However, in the last hours of the
trading session, the markets trim some of their losses to come off their day's
high points. The street got cautious with World Economic Forum (WEF) founder
and executive chairman Klaus Schwab's statement that India is still in the middle
class in ease of doing business and the country should work towards creating
the necessary ecosystem to boost entrepreneurship. Adding some anxiety among
investors, as many as 358 infrastructure projects worth Rs 150 or above,
entailing a total investment of Rs 3.53 lakh crore, reported cost overruns as
on August 1, 2018. But, the indices again rallied to end the day with the
notable gains, with taking support from S&P Global's statement that India's
rapid economic growth will be enough to offset worries about the independence
of its central bank and keep its credit rating in the coveted investment grade
bracket. Finally, the BSE Sensex surged 150.57 points or 0.42% to 35.929.64,
while the CNX Nifty was up by 53.95 points or 0.50% to 10,791.55.
The US markets ended mostly in
red on Thursday as investors continued to worry over the lack of clarity and
progress in US-China trade talks. The perception of progress was tempered that
China arrested a second Canadian national in apparent retaliation for Meng's
arrest, while reports surfaced that Trump's aides were warning the president
that his authority to intervene in the affair is limited. Besides, there was
some cautiousness in the markets as President Donald Trump again criticized the
Federal Reserve's effort to normalize monetary policy. However, the Dow Jones
Industrial Average eked out gains, led by Procter & Gamble and McDonald's.
On the economic front, the Labor Department released a report showing a much
steeper than expected drop in initial jobless claims in the week ended December
8. The report said initial jobless claims fell to 206,000, a decrease of 27,000
from the previous week's revised level of 233,000. Street had expected jobless
claims to slip to 225,000. Jobless claims pulled back further off the nearly
eight-month high reached two weeks ago to hit their lowest level in almost
three months. Meanwhile, a separate report from the Labor Department showed
import prices plunged by much more than expected in the month of November amid
a steep drop in fuel prices. The report said import prices plummeted by 1.6
percent in November after climbing by 0.5 percent in October. Street had
expected import prices to slump by 0.9 percent. S&P 500 lost 0.53 points or
0.02 percent to 2650.54 and Nasdaq was down by 27.98 points or 0.39 percent to
7070.33, while Dow Jones Industrial Average gained 70.11 points or 0.29 percent
to 24597.38.
Crude oil futures settled higher
with gains of over two and half percent on Thursday after a report said that
Saudi Arabia plans to cut shipments to US refiners to avoid an expansion of US
stockpiles. Saudi Aramco warned US refiners to brace for a steep drop in
cargoes next month. Oil prices had already been moving up as traders pored over
data showing a rise in monthly Organisation of the Petroleum Exporting
Countries (OPEC) output, as well as a recent report of a weekly decline in US
crude supplies and production. Benchmark crude oil futures for January rose
$1.43 or 2.8 percent to settle $52.58 a barrel on the New York Mercantile
Exchange. February Brent crude surged $1.30 or 2.2 percent to settle at $61.45
a barrel on London's Intercontinental Exchange.
Indian
rupee made a smart recovery against the American currency after a three-day
straight fall and ended higher on Thursday, on the back of positive
macro-economic data. India's industrial production measured by Index of
Industrial Production (IIP) surged to 11-month high of 8.1% in the month of
October 2018 as against 4.5% in September 2018 and 1.8 percent in October 2017,
while India's retail inflation based on Consumer Price Index (CPI) cooled down
to a 17-month low of 2.33% in the month of November 2018, as compared to 4.88%
in the same month of previous year. Traders also took comfort after the new RBI
governor Shaktikanta Das took charge and stressed on the need of a consultative
approach to tackle pressing economic issues. Positive gains in the domestic
equities coupled with dollar's weakness against some currencies overseas too
supported the domestic unit. On the global front, euro rose slightly on Thursday
after Italy said it would cut its budgetary spending plans in a row with the
European Union, although traders were in a cautious mood ahead of the European
Central Bank's monetary policy meeting. Finally, the rupee ended at 71.68, 33
paise stronger from its previous close of 72.01 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 4135.15 crore against gross selling of Rs 5608.24 crore, while
in the debt segment, the gross purchase was of Rs 893.84 crore with gross sales
of Rs 2429.63 crore. Besides, in the hybrid segment, the gross buying was of Rs
0.73 crore against gross selling of Rs 0.36 crore.
The US markets end mostly lower
on Thursday as concerns about a creeping economic slowdown weighted on investor
sentiments. Asian markets were trading in red on Friday as caution returned and
the recent recovery in equities showed signs of losing steam. Indian markets
extended their gains for third straight session on Thursday on the back of
strong macro data and supportive global cues. Besides, heavy buying in capital
goods, consumer durables, realty and FMCG stocks too boosted the sentiments.
Today, the markets are likely to make negative start amid weak global cues on
economic growth concerns. Investors will be looking ahead for cues from the
Reserve Bank of India (RBI) board meeting later in the day. The central board
of the RBI under new Governor Shaktikanta Das will meet on December 14 where
the directors are likely to push for greater say in the decision making of the
central bank. Traders will also be eyeing another macro data of wholesale price
inflation for November scheduled to be release later in the day. Traders will
be concerned about global credit ratings agency Moody's statement that
liquidity constraints faced by some non-bank financial institutions (NBFIs)
will likely tighten overall credit supply and slow India's economic growth rate
to just above 7% for the fiscal 2019 and 2020. In addition, any further
distress in the Indian NBFI sector will pose significant downside risks to
India's growth outlook. Traders may take note of Finance Minister Arun
Jaitley's statement that need to double the size of the economy in next few
years. He said we are globally no longer in the high growth economic era which
we saw between 2003-08; to achieve 9%, we need global tailwinds and
extraordinary domestic growth story. He added that trade wars, hardening dollar
and fluctuating oil create uncertainty. Meanwhile, NITI Aayog chief executive
Amitabh Kant said that India's exports need to increase significantly if the
country has to become a $5-trillion economy by 2025. Kant also noted that the
private sector will play a major role in pushing the country's economy towards
the ambitious $5-trillion target. There will be some buzz in the public sector
banking stocks with report that the government is considering additional
capital infusion of up to Rs 30,000 crore in public sector banks as they have
been unable to raise required funds from the markets. Also, there will be some
reaction in cement sector stocks with report that the Goods and Services Tax
(GST) Council is likely to rationalise the 28% slab by cutting tax rates on
construction items, like cement, in its meeting next week.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,791.55
|
10,747.83
|
10,836.93
|
BSE Sensex
|
35,929.64
|
35,784.25
|
36,085.30
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,089.20
|
174.70
|
166.93
|
187.83
|
SBI
|
240.97
|
289.00
|
285.17
|
293.42
|
ICICI Bank
|
191.30
|
349.55
|
346.70
|
353.30
|
IOC
|
175.70
|
137.40
|
136.20
|
138.75
|
Sun Pharma
|
168.54
|
422.10
|
416.97
|
428.27
|
M&M's subsidiary -- Mahindra Electric and SmartE have entered into partnership with plans to deploy 10,000 electric three-wheelers across the country by 2020.
ITC's agri-biotech subsidiary -- TASL has entered into an agreement with the UK's James Hutton Institute to source 16 new varieties and 600 new clones of potato for trial and testing in India.
Tata Motors will hike prices of its passenger vehicles across models by up to Rs 40,000 from January 1, 2019, to offset the impact of rising input costs and increase in fuel prices.
TCS has released a new version of the Connected Clinical Trials platform at the recently concluded TCS ADD Vantage forum in Paris.