The Penultimate trading day of
the week turned out to be a disappointment for the Indian frontline equity
indices, as they remained choppy throughout the session and ended near day's
lows. The benchmarks suffered hefty bouts of profit booking especially in Oil
& Gas, PSU and IT counters and got dragged below the psychological 9,600
(Nifty) and 31,100 (Sensex) levels.
Sentiments remained weak with the report that the likely increase in
farm loan waivers will weigh on PSU banks, NBFCs. The agri stress indicates
that Tamil Nadu, Karnataka and Haryana may follow up with farm loan waivers,
taking the total farm loan waivers to about $28 billion from $10 billion.
Besides, soft US economic data, a relatively hawkish Federal Reserve statement
and worries of political turmoil in the world's largest economy also weighed on
the sentiments. Adding pessimism among
traders, Moody's Investors Services in its report indicated that Reserve Bank
of India's (RBI's) move to reduce the amount of money that banks have to set
aside (as security) on home loans is negative from the perspective of the
ratings of lenders. According to the rating agency, the move is credit negative
for Indian banks because lower capital requirements will weaken their
protection related to the exposure to the housing sector and encourage greater
lending. Some concerns also came with report that foreign portfolio investors
(FPIs) sold shares worth a net Rs 161.13 crore on June 14, 2017. Meanwhile,
with less than two weeks to go, the Centre and States are hoping to wrap up
discussions on the goods and services tax (GST) this weekend. The GST Council
will meet on June 18 to finalize the tax rate on lottery and will discuss the
remaining draft rules. Finally, the BSE Sensex declined 80.18 points or 0.26%
to 31075.73, while the CNX Nifty was down by 40.10 points or 0.42% to 9,578.05.
The US markets closed mostly
lower on Thursday, as large-cap names in the technology sector extended losses,
but major indexes finished off of their intraday lows. A more hawkish tone from
the Federal Reserve on Wednesday continued to contribute to the cautious mood,
as did reports that a special counsel was investigating whether President
Donald Trump obstructed justice, inserting a new bit of political uncertainty
into markets. On the economy front, the number of Americans applying for and
receiving benefits after losing their jobs keeps going lower. Initial jobless
claims fell by 8,000 to 237,000 in the seven days stretching from June 4 to
June 10. The less-volatile four-week average of new claims rose by 1,000 to a
still-low 243,000. In May the monthly average fell to a 44-year bottom. Initial
claims reflect people who apply for benefits after losing their jobs. New
applications for benefits have registered less than 300,000 for 119 straight
weeks, the longest run since the early 1970s. Separately, two gauges of
manufacturing sentiment showed strength in June. The Philadelphia Fed
manufacturing index in June retreated to a reading of 27.6 from 38.8 in May. The
Dow Jones Industrial Average lost 14.66 points or 0.07 percent to 21,359.90,
Nasdaq was down 29.39 points or 0.47 percent to 6,165.50, and S&P 500 edged
lower by 5.46 points or 0.22 percent to 2,432.46.
Crude oil futures extended their
slump and once again hit their seven-month lows on Thursday, as high global
inventories fed fears that rising crude production in Nigeria, Libya and the
United States will feed the global supply glut despite output cuts from OPEC
and other producing countries . In a surprisingly hawkish move that
strengthened the U.S. dollar and dented commodity prices, the Fed maintained
its interest rate outlook for the next two years despite downbeat economic
data. Meanwhile, OPEC is worried that global supplies will continued to
outstrip demand. It said that as per its estimates US crude oil production will
rise by 800,000 bpd in 2017. Benchmark crude oil futures for July delivery ended
lower by $0.27 or 0.6 percent to $44.46 on the New York Mercantile Exchange. In
London, Brent crude for July delivery ended lower by $ 0.08 to $46.92 on the
ICE.
Indian
rupee ended considerably weaker against the US dollar on Thursday due to fresh
demand for the American currency from banks and importers. Sentiments remained
dampened as the US Federal Reserve raised interest rates, citing continued US
economic growth and job market strength, and announced it would begin cutting
its holdings of bonds and other securities this year. Some concern also came
with media reports that US President Donald Trump is being investigated by a
special counsel for possible obstruction of justice. Moreover, lackluster local
equities along with modest capital outflows too weighed on the currency trade.
On the global front, dollar inched higher against yen on Thursday, with
expectations of another Federal Reserve rate hike this year pointing the way to
a trimming of the huge emergency funds pumped into the economy since 2009.
Finally, the rupee ended at 64.54, 25 paise weaker from its previous close of
64.29 on Wednesday.
The
FIIs as per Thursday's data were net buyers in equity and debt segments both. In
equity segment, the gross buying was of Rs 6819.81 crore against gross selling
of Rs 6733.70 crore, while in the debt segment, the gross purchase was of Rs
1247.69 crore with gross sales of Rs 483.75 crore.
The US markets despite coming off
the worst levels of the day, ended modestly in red in the last session, as
traders continued to digest the Federal Reserve's decision to raise interest
rates by a quarter point and they largely overlooked the report showing a
bigger than expected drop in initial jobless claims in the week ended June
10th. The Asian markets have made a mixed start, though some of the indices are
up by around half a percent in the early deals, led by the Japanese market
ahead of a Bank of Japan's policy decision. The Indian markets gradually losing
their hold ended with cut of around half a percent in last session. Today, the
start is likely to be flat-to-cautious, as there will be some concern with the
current account deficit soaring to $ 3.4 billion, or 0.6 per cent of gross
domestic product (GDP), in the fourth quarter of fiscal 2017, from $ 0.3
billion a year ago. The widening of the CAD on a year-on-year basis was
primarily on account of a higher trade deficit which stood at $ 29.7 billion.
However, on a sequential basis, the gap between forex earnings and expenses,
narrowed from $ 8 billion in the third quarter of FY17. There will be some buzz
in the chemical sector stocks, as the Finance Ministry has imposed definitive
anti-dumping duty on Hydrogen Peroxide imports from six countries. The IT and
tech stocks are likely to remain under
pressure tailing the slump in global counterparts and as the board of directors
at Infosys will set revised growth targets in place of the much-touted goal of
$20 billion by 2020. The oil companies too will be in focus, as after the
successful pilot in five cities, state-owned oil companies will from today
revise rates on a daily basis across all the 58,000 petrol pumps in the
country. Also, Reliance Industries and British Petroleum have announced an
investment of $6 billion, or nearly Rs 40,000 crore, in new projects including
developing new gas fields in the KG-D6 block.
Support and Resistance: NSE (Nifty) and BSE
(Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9578.05
|
9552.10
|
9612.70
|
BSE Sensex
|
31075.73
|
30991.66
|
31194.62
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
Aurobindo Pharma
|
135.75
|
643.90
|
612.47
|
661.87
|
SBI
|
119.26
|
284.00
|
281.63
|
286.08
|
ICICI Bank
|
101.88
|
316.75
|
315.17
|
318.87
|
Vedanta
|
97.12
|
235.90
|
233.20
|
238.40
|
Bank of Baroda
|
88.10
|
169.60
|
167.97
|
171.77
|
Dr. Reddy's Laboratories is recalling over 3.25 lakh cartons of Zenatane capsules, used for the treatment of severe acne, from the US market due to failed dissolution specifications.
BPCL has inked an agreement with HPCL and IOC to jointly set up the world's largest refinery and petrochemical complex at Ratnagiri district of Maharashtra at a cost of $40 billion.
Yes Bank has collaborated with TerraPay to enable real-time international money transfers to bank accounts in India.
Bajaj Auto has cut prices of its motorcycles by up to Rs 4,500 with immediate effect.