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NSE Intra-day chart (13 December 2019)
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Market Commentary 16 December 2019
Markets to open marginally in red amid mixed cues from Asian peers

 

Indian equity benchmarks continued to flourish in energetic way on the last trading day of the week, with Sensex and Nifty closing higher by around 1% each. After a bullish start, key indices maintained their gaining momentum during the whole day, as Finance Minister Nirmala Sitharaman assured that the Centre will honour GST compensation payment to states but did not say by when the dues will be cleared. Investors also remained positive with Union Minister Rao Inderjit Singh's statement that Indian economy is resilient and there is no cause for apprehension on decline in GDP with a slew of steps directed at boosting it. He added that the government has been undertaking various measures to boost GDP growth. Extending their gains, key indices settled the session near intraday high points. Optimism remained over the street, even though Moody's Investors Service lowered its 2019 GDP growth forecast for India to 5.6 per cent as slow employment growth weighs on consumption. It expects economic growth to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent respectively, but sees the pace of growth remaining lower than past. The street also overlooked sluggish microeconomic data i.e. India's factory output growth which shrunk by 3.8% in October 2019 as competed to expansion of 8.4% in October 2018, while retail inflation based on Consumer Price Index surged to a more than three-year high of 5.54% in November. Finally, the BSE Sensex gained 428.00 points or 1.05% to 41,009.71, while the CNX Nifty was up by 114.90 points or 0.96% to 12,086.70.

 

The US markets ended marginally higher on Friday after President Donald Trump and Chinese officials announced a trade pact that includes a rollback of some tariffs, the scrapping of further duties originally set for Sunday, and promises of targeted US agricultural purchases by China. Trump said more US import duties that were planned to start from Sunday on more than $150 million in annual consumer goods will not be charged because of the fact we made the deal. Trump also said China would most likely buy $50 billion of farm goods. Besides, the US Trade Representative said that the United States and China have reached an historic and enforceable agreement on a Phase One trade deal that requires structural reforms and other changes to China's economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. On the economic data front, a report released by the Commerce Department showed retail sales in the US rose by far less than Street had anticipated in the month of November. The Commerce Department said retail sales edged up by 0.2 percent in November after climbing by an upwardly revised 0.4 percent in October. The uptick in retail sales was partly due to continued growth in sales by motor vehicles and parts dealers, which rose by 0.5 percent in November after jumping by 1.0 percent in October. Meanwhile, business inventories in the US increased in line with Street estimates in the month of October, according to a report released by the Commerce Department. The Commerce Department said business inventories rose by 0.2 percent in October after edging down by a revised 0.1 percent in September.

 

Extending their previous session gains, crude oil futures ended higher on Friday after the US and China said they have reached a preliminary agreement on a phase one trade agreement. Private report said that China confirmed that it reached a deal on the text of a phase one pact, but that the deal would need to first go through legal procedures before it is signed. Trump separately announced a phase one deal and scrapped tariffs on Chinese goods that were set to go into effect on Sunday. Benchmark crude oil futures for January rose 89 cents or 1.5 percent to settle at $60.07 a barrel on the New York Mercantile Exchange. February Brent surged $1.02 or 1.6 percent to settle at $ 65.22 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended unchanged compared to its previous close on Thursday. Traders remained wary as Moody's Investors Service lowered its 2019 GDP growth forecast for India to 5.6 per cent as slow employment growth weighed on consumption. It expects economic growth to pick up in 2020 and 2021 to 6.6 per cent and 6.7 per cent respectively, but sees the pace of growth remaining lower than past. However, firm domestic equities supported the domestic currency. Some support also came with Union Minister Rao Inderjit Singh's statement that Indian economy is resilient and there is no cause for apprehension on decline in GDP with a slew of steps directed at boosting it. He added that the government has been undertaking various measures to boost GDP growth. On global front, dollar edged lower on Friday, with global risk appetite boosted by the apparent clearing of two clouds that have been hanging over world markets -- US-China tariffs due on December 15 and Britain's election. Finally, the rupee ended unchanged from its previous close of 70.83 on Thursday.

 

The FIIs as per Friday'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 4587.82 crore against gross selling of Rs 5202.78 crore, while, in the debt segment, the gross purchase was of Rs 2822.41 crore with gross sales of Rs 2212.96 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.89 crore against gross selling of Rs 5.63 crore.

 

The US markets ended slightly higher on Friday as the United States and China announced an initial trade agreement, cooling tensions that have rattled markets. Asian markets are trading mixed on Monday as investors cheered an announced trade agreement between Beijing and Washington over the weekend although jubilation was capped by prevailing scepticism about the deal. Indian markets ended higher on Friday on the back of a slew of positive developments globally. Today, the start of new week is likely to be flat-to-negative amid mixed cues from Asian peers coupled with weak exports data. As per the government data, India's exports contracted for the fourth month in a row in November, dipping 0.34% to $25.98 billion, mainly on account of poor shipments of petroleum, gems & jewellery and leather products. Imports too declined by 12.71% to $38.11 billion in November, narrowing the trade deficit to $12.12 billion. Market participants will be eyeing the data on Wholesale Price Index (WPI) inflation for November to be released later in the day. Also, investors will be looking ahead to the 38th Goods and Services Tax (GST) Council meeting to be held on December 18. The Council is expected to deliberate on an alternative mechanism for the compensation cess, and look at ways to boost revenue from indirect taxes. However, some respite may come later in the day with the Reserve Bank of India's (RBI) data showing that India's services exports rose 5.25% to $17.70 billion in October, while imports remained nearly flat at $10.86 billion. Some support may also come with report that the country's foreign exchange reserves surged by $2.342 billion to touch a life-time high of $453.422 billion in the week to December 6. Traders may take note of NITI Aayog CEO Amitabh Kant's statement that the series of pathbreaking and ambitious reforms unleashed by the Modi government in the last few years will make India a very competitive and productively-efficient economy in the long run. Meanwhile, beginning the customary pre-Budget consultation exercise from December 16, Finance Minister Nirmala Sitharaman will seek inputs from various stakeholders including industry bodies, farmer organisations and economists for reviving consumption and boosting growth. There will be some buzz in the banking stocks with rating agency Moody's report that banks may see a spike in bad loans because of stress in the non-banking financial company (NBFC) sector and it warned that the trend of improvement in key bank metrics is likely to reverse or slow. Reality stocks will be in focus with a private report indicating that housing sales are estimated to rise by mere 4% to 2.58 lakh units across seven major cities during this calendar year on subdued demand because of liquidity crunch and overall economic slowdown. There will be some reaction in sugar stocks with report that India exported about 37 lakh tonne of sugar in the 2018-19 marketing year ended September to clear the surplus stock.

 

       Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

12,086.70

12,040.58

12,115.83

BSE Sensex

41,009.71

40,812.34

41,131.44

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

2,014.60

46.65

45.48

47.73

Tata Motors

930.20

176.70

173.48

181.93

SBIN

409.55

332.55

327.22

335.67

Tata Steel

216.28

428.40

423.03

434.18

Vedanta

202.97

149.40

147.77

150.87

 

  • TCS has successfully deployed the TCS BaNCS for Market Infrastructure product for Strate, the CSD for the electronic settlement of financial instruments in South Africa, across five exchanges. 
  • Tata Motors has launched its new generation range of Prima and Ultra trucks in Kuwait, specially designed to meet the changing customer needs. 
  • Wipro has been awarded a strategic multi-year cyber governance, cloud and infrastructure services transformation engagement by Olympus. 
  • Hero MotoCorp is planning to drive in BS-VI upgrades of around ten products, including five top-selling bikes and scooters by February next year.
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