Snapping three days gaining
streak, Indian equity benchmarks ended the volatile day of trade with marginal
losses on Tuesday, as traders opted to book profit at higher levels. Markets
altered between green and red throughout the session to end marginally in red,
as traders remained a bit cautious with the merchandise export growth slowing
sequentially to 12.4% in December, while imports jumping 21.1% during the
month, aided by a spike in crude oil prices and a favourable base. The trade
deficit widened to its highest level in over three years in December to $14.9
billion, a three-year peak. However, excluding the almost 35% rise in oil
purchases from overseas, overall imports rose 17.2% in December. Traders also
remained on sidelines ahead of GST Council meeting scheduled to be held on
January 18, which will also be the last meeting before Budget 2018. The council
is likely to revise rates for electric vehicles, farm equipment, ease
compliance & modify the reverse charge mechanism. The recommendations of
the law review committee are also likely to be taken up for consideration by
the GST Council, comprising Centre and states. However, losses remained capped,
as International Monetary Fund (IMF) highlighted that India is reclaiming its
place as a growth leader after a short period of slowdown in the economy. Some
relief also came with Prime Minister Narendra Modi promising more economic
reforms to further improve the ease of doing business in India as he invited
Israeli companies to invest in India. PM further noted that India is the
fastest growing economy with FDI inflows at all time high. Traders also took
some solace with private report stating that two Asian economies - India and
Indonesia - will see a pick-up in GDP growth in 2018, reaping benefits of the
economic reforms. It further noted that in the Indian context, adapting to the
new GST regime, economic reforms aiding growth and recapitalisation plan for
public sector banks will lead to increased investment growth and economic
activity over the coming quarters. Finally, the BSE Sensex declined 72.46
points or 0.21% to 34,771.05, while the CNX Nifty was down by 41.10 points or
0.38% to 10,700.45.
The US markets closed lower on
Tuesday, after the blue-chip index relinquished all the early gains in the
sharpest daily reversal in nearly two years. On the economy front, the Empire
State manufacturing survey slipped to 17.7 in January from a revised 19.6 in
December. This is the third straight monthly decline after the index hit 28.1
in October. The new-orders index and shipments gauges fell in January. The
new-orders index fell 7 points to 11.9, and the shipments index fell 9 points
to 14.4. Unfilled orders and inventory indexes rose. The index for future
inventories jumped to a record high, suggesting firms expect to build
inventories significantly in coming months. Despite the slowdown, the index
remains at a level associated with solid growth, continuing a pattern in place
over the past year. The Dow Jones Industrial Average lost 10.33 points or 0.04
percent to 25,792.86, the Nasdaq dropped 37.062 points or 0.51 percent to
7,224.00, and the S&P 500 edged lower by 9.82 points or 0.35 percent to
2,776.42.
Crude oil futures cooled off on
Tuesday, dropping off three-year highs as traders booked profits and the dollar
stabilized from 3-year lows. However, healthy demand outlook restricted any
major decline, it was reported that imports to India, the world's third-biggest
oil consumer, rose by about 1.8 percent in 2017 to a record 4.37 million
barrels per day (bpd) as the country boosted purchases to feed its expanded
refining capacity. Benchmark crude oil futures for February delivery ended
lower by $0.57 or 0.9 percent at $63.73 a barrel on the New York Mercantile
Exchange. Brent crude for March delivery was down by $1.11 or 1.6 percent to
$69.15 a barrel on the ICE.
Indian
rupee breached the psychological 64/dollar mark to hit its lowest in three week
on Tuesday, on persistent dollar demand and widening trade deficit. Trade
deficit or difference between imports and exports was $14.88 billion in
December, up about 41 percent year-on-year, as crude oil and gold import bill
inflated. Investors even overlooked BMI Research's report that two Asian
economies - India and Indonesia - will see a pick-up in GDP growth in 2018,
reaping benefits of the economic reforms. Besides, stronger dollar sentiment
overseas along with fall in domestic equities also predominantly pressurised
the local unit. On the global front, euro held steady on Tuesday, taking a
breather after having rallied on the back of optimism about the euro zone‘s
economic outlook and expectations for the European Central Bank to wind down
its massive monetary stimulus. Finally, the rupee ended at 64.03, 55 paise
weaker from its previous close of 63.48 on Monday.
The FIIs as per Tuesday's data
were net buyers in equity segment, while they were net sellers in debt segment.
In equity segment, the gross buying was of Rs 5152.89 crore against gross
selling of Rs 5000.15 crore, while in the debt segment, the gross purchase was
of Rs 1037.56 crore with gross sales of Rs 1899.59 crore. Besides, in the
hybrid segment, there was no buying against gross selling of Rs 2.29 crore.
The US markets deposing their
early gains ended lower in the last session, some profit taking contributed to
the pullback by stocks, although the decline was relatively subdued compared to
the recent strength. The Asian markets have made mostly a soft start, pulling
back from record highs, following declines in US counterparts. Many traders are
questioning the pace of gains in equity markets at the start of 2018 as the
earnings season ramps up. The Indian markets consolidated a bit in the last
session and the major benchmarks ended modestly in red after a choppy day of
trade. Today, the start is likely to remain weak on negative global cues and on
lingering concerns over the possibility of some slippage in the fiscal deficit
path. Traders however, will be getting some support with a private report
stating that business optimism index for the January-March quarter 2018 touched
three and half year high on improving demand conditions and expectation that
government sops in the budget will revive consumption. It further said that the
upcoming Union Budget and assembly elections during 2018 might have generated
optimism about government sops that could push revival in consumption. Also,
there will be some support with report that agricultural exports from India
grew 18 per cent to $21 billion in the April-October 2017-18 period compared to
just 5 per cent in 2016-17. There will be some buzz in the FMCG sector stocks,
especially the biscuit manufacturers who have demanded a lower GST rate on
biscuit and related products than the current 18 per cent, saying it is a mass
consumption food product and similar products are subject to lower tax rate.
There will be some important earnings announcements too, to keep the markets
buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10700.45
|
10671.42
|
10745.92
|
BSE Sensex
|
34771.05
|
34692.39
|
34892.87
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
ICICI Bank
|
267.07
|
334.10
|
326.85
|
341.05
|
SBI
|
180.41
|
296.15
|
293.18
|
301.23
|
ITC
|
129.36
|
261.70
|
258.77
|
266.67
|
Infosys
|
113.23
|
1122.85
|
1091.13
|
1144.68
|
NTPC
|
84.48
|
173.25
|
171.03
|
175.03
|
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