Indian equity benchmarks ended
the last trading day of the week with notable gains. After a cautious start of
the day, key indices remained volatile for the most part of the day, impacted
with the government data report showing that consumer price index-based
inflation (CPI) for August crept up slightly to 3.21% year-on-year, compared
with 3.15% in July, driven by a sharp rise in food prices. Market participants
also remained worried with the International Monetary Fund's (IMF) statement
that India's economic growth is much weaker than expected, attributing the
reasons for corporate and environmental regulatory uncertainty and lingering
weaknesses in some non-bank financial companies. However, markets staged
recovery in the last hours of trade, amid reports that the Reserve Bank of India
is expected to go for a further rate cut in the next month's monetary policy
review as inflation is expected to pan out in line with the central bank's
projection. The street took some support with Commerce and Industry Minister
Piyush Goyal's statement that the government will soon come out with guidelines
on extending foreign exchange credit to exporters at affordable rates. Besides,
snapping two-month declining trend, India's industrial production measured by
Index of Industrial Production (IIP), which gauges production in the industrial
sector for a given period of time, stood at 4.3% in July 2019. Finally, the BSE
Sensex gained 280.71 points or 0.76% to 37,384.99, while the CNX Nifty was up
by 93.10 points or 0.85% to 11,075.90.
The US markets ended mostly lower
on Friday. However, the Dow Jones Industrial Average eked out an
eighth-straight gain on Friday as Sino-American trade tensions eased and
central banks support risk taking with economic stimulus measures. China's
Ministry of Commerce revealed plans to exempt US agricultural products,
including soybeans and pork, from additional tariffs. China will add the
agricultural products to a list of 16 types of American-made products granted
tariff exemptions as a sign of goodwill ahead of the next round of trade talks.
The Commerce Ministry also said it welcomes President Donald Trump's move to
temporarily delay raising the rate of tariffs on $250 billion worth of Chinese
imports. Meanwhile, Trump said he would think about an interim deal with China
but would prefer a full agreement as the world's two largest economies look to
end the widening trade war. On the economic data front, a report released by
the Commerce Department showed business inventories in the US increased by more
than expected in the month of July. The Commerce Department said business
inventories climbed by 0.4 percent in July after coming in unchanged in June.
Street had expected inventories to rise by 0.3 percent. Retail inventories
showed a notable 0.8 percent increase after slipping by 0.2 percent in the
previous month, while manufacturing and wholesale inventories both rose by 0.2
percent. Besides, with fuel prices pulling back sharply, the Labor Department
released a report showing a slightly bigger than expected decrease in US import
prices in the month of August. The report showed import prices fell by 0.5
percent in August after inching up by a downwardly revised 0.1 percent in July.
Street had expected import prices to drop by 0.4 percent compared to the 0.2
percent uptick originally reported for the previous month. Dow Jones Industrial
Average added 37.07 points or 0.14 percent to 27219.52, while Nasdaq dropped
17.75 points or 0.22 percent to 8176.71 and S&P 500 down up by 2.18 points
or 0.07 percent to 3007.39.
Crude oil futures ended lower for
fourth straight day on Friday as traders feared a likely drop in energy demand
and excess supply in the market. The possibility of the US relaxing sanctions
on Iran too weighed on oil prices. In its latest monthly report, The
Organization of the Petroleum Exporting Countries (OPEC) said global oil market
will be in surplus next year. Oil demand will drop by about 60,000 barrels per
day next year. However, downside remain capped on reports that signs of cooling
animosities between Beijing and Washington, representing the largest economies
in the world and big consumers of crude, have been a focus for oil traders
because that conflict has threatened to hurting the global economy and damage
demand for crude. Benchmark crude oil futures for October declined 24 cents or
0.4 percent to settle at $54.85 a barrel on the New York Mercantile Exchange.
November Brent lost 16 cents or 0.3 percent to settle at $60.22 a barrel on
London's Intercontinental Exchange.
Indian
rupee ended stronger against dollar on Friday, due to increased selling of the
American currency by banks and exporters. Traders took encouragement with the
Central Statistics Office's data showing that India's industrial output rose
4.3% in July, as against 2% in June. Also, last hour recovery in local equity
markets and dollar losing sheen against some other currencies overseas gave the
uptrend some momentum. Market participants paid no heed towards data showing
that consumer price index-based inflation (CPI) for August crept up slightly to
3.21% year-on-year, compared with 3.15% in July, driven by a sharp rise in food
prices. On the global front, euro edged higher against the dollar on Friday as
German government bond yields surged on the back of investors thinking the
European Central Bank was done stimulating the ailing euro zone economy after
cutting rates on Thursday. Finally, the rupee ended at 70.92, 22 paise stronger
from its previous close of 71.14 on Thursday.
The
FIIs as per Friday's data were net buyers in both equity and debt segments. In equity
segment, the gross buying was of Rs 6417.96 crore against gross selling of Rs
3808.56 crore, while in the debt segment, the gross purchase was of Rs 1639.72
crore with gross sales of Rs 1543.34 crore. Besides, in the hybrid segment, the
gross buying was of Rs 11.56 crore against gross selling of Rs 9.89 crore.
The US markets ended mostly lower
on Friday as the major averages encountered some resistance as they climbed
back within striking distance of the record highs set in July. Asian markets
are trading mixed on Monday, as oil prices surged following drone attacks over
the weekend that hit major oil production facilities in Saudi Arabia. Indian
markets ended range-bound trade at intraday high levels on Friday mainly on the
back of late hour buying led by financial and IT stocks as hopes of another
rate cut by RBI boosted investor sentiments. Today, the start of new week is
likely to be negative following weakness in global markets along with surge in
crude oil prices amid drone attacks in Saudi Aramco, the largest oil producer
in the world. Some cautiousness will come as the commerce ministry's data
showed that India's exports dropped by 6.05 per cent to $26.13 billion in
August compared to the year-ago month. Imports too declined by 13.45 per cent
to $39.58 billion, narrowing trade deficit to $13.45 billion in August. Traders
will be eyeing the inflation data based on wholesale price index (WPI) slated
to be announced later in the day. Though, some support may come later in the
day as finance minister Nirmala Sitharaman announced reforms to boost the
export and housing sector in the country. She announced a slew of measures
including a new attractive scheme to refund the duties and taxes on exports
that will replace all existing schemes in a bid to stimulate exports and the
economy. She said this will incentivise all exporters more than all the existing
schemes put together. The revenue forgone is projected at upto Rs 50,000 crore.
She also said there are clear signs of revival of industrial production and
fixed investment after economic growth plunged to a six-year low. Traders may
also took note of a report that foreign portfolio investors (FPIs) turned net
buyers in the first half of September, pumping in Rs 1,841 crore into the
capital markets, after remaining sellers for the previous two months.
Meanwhile, the Reserve Bank of India's data showed that the country's foreign
exchange reserves increased by $1.004 billion to $429.608 billion in the week
to September 6, helped by a rise in foreign currency assets. Banking stocks
will be in focus as the Reserve Bank of India (RBI) proposed a minimum equity
capital of Rs 200 crore to set up a small finance bank (SFB) under the on tap
licence regime to expand the banking services through high technology-low cost
operations. There will be some buzz in the power stocks with a private report
indicating that the outstanding dues of distribution utilities from power
producers have risen by more than 57 per cent to Rs 73,748 crore in July 2019
compared to the same month last year, showing stress in the sector.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,075.90
|
10,986.28
|
11,124.98
|
BSE Sensex
|
37,384.99
|
37,118.89
|
37,532.30
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in
Lacs)
|
Yes Bank
|
2,782.86
|
68.55
|
65.27
|
70.67
|
Tata Motors
|
690.89
|
129.55
|
126.38
|
131.83
|
SBI
|
273.03
|
291.70
|
284.97
|
295.47
|
IOC
|
255.27
|
130.10
|
125.57
|
132.82
|
Indiabulls Housing Finance
|
184.04
|
442.25
|
431.35
|
453.80
|
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