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NSE Intra-day chart (18 February 2020)
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Market Commentary 19 February 2020
Benchmarks likely to make an optimistic start on Wednesday

 

Indian equity bourses settled Tuesday's trading session off day's low points. After a lackluster start, bourses remained negative throughout the day, as Care Ratings' report stated that performance of companies during the quarter ended December of the financial year 2019-20 was weak with contraction in revenue and moderation in the growth rate of net profits. Adding more worries, International Monetary Fund (IMF) said that the goods and services tax (GST) collections in India have been below potential. The organisation said that multiple rates along with exemptions and implementation challenges have affected the GST collections. However, in the last hour of the day, indices managed to trim most of their losses, with a US-based think tank World Population Review report showing that India emerged as the world's fifth largest economy by overtaking the UK and France in 2019. Traders got some support, as Union Finance Minister Nirmala Sitharaman defended the fiscal deficit figures in the union budget and termed it as absolutely realistic. She noted that the government has been absolutely realistic both on the score of revenue generation and on the score of what can spend or borrow, so figures therefore are absolutely realistic keeping in mind the economy. Finally, the BSE Sensex lost 161.31 points or 0.39% to 40,894.38, while the CNX Nifty was down by 53.30 points or 0.44% to 11,992.50.

 

The US markets ended mostly lower on Tuesday, following the long holiday weekend, after Apple warned of weaker than previously forecast second quarter revenue. Apple said it expects to miss its forecast for second quarter revenue of $63 billion to $67 billion due to lower iPhone production and weak Chinese demand as a result of the coronavirus (COVID-19) outbreak.  The COVID-19 epidemic has sickened more than 73,000 people and claimed nearly 1,900 lives thus far. Further, disappointing earnings report from Walmart (WMT) also weighed on the markets after the retail giant reported weaker than expected fourth quarter results and provided disappointing guidance. On the economic data front, the Federal Reserve Bank of New York released a report showing growth in New York manufacturing activity saw a notable acceleration in the month of February. The New York Fed said its general business conditions index climbed to 12.9 in February from 4.8 in January, with a positive reading indicating growth in regional manufacturing activity. Street had expected the index to inch up to 5.0. The bigger than expected increase by the headline index came as the new orders index shot up 16 points to 22.1 and the shipments index climbed to 18.9. 

 

Crude oil futures ended flat on Tuesday as traders weighed worries about the coronavirus and its impact on energy demand, along with a forecast for a slowdown in US shale oil output. Crude-oil production from seven major US shale plays is forecast to climb by 18,000 barrels a day in March to 9.175 million barrels a day, according to a report from the Energy Information Administration (EIA) released. The report showed that oil output from the Permian Basin is expected to see an increase but shale output from the Anadarko, Appalachia, Bakken and Niobrara regions, is expected to see monthly declines. Crude oil futures for March settled unchanged at $52.05 a barrel on the New York Mercantile Exchange. April Brent crude added 8 cents or 0.1 percent to settle at $57.75 a barrel on London's Intercontinental Exchange.

 

Indian rupee depreciated considerably against the US dollar on Tuesday, as investor sentiments remained fragile amid coronavirus fears. Stronger dollar against key global currencies and subdued equity market too put pressure on the domestic unit. Market participants failed to take support with a US-based think tank World Population Review report showing that India emerged as the world's fifth largest economy by overtaking the UK and France in 2019. It added that India is developing into an open-market economy from its previous autarkic policies. On the global front, euro weakened on Tuesday, close to the three-year low it touched on Monday, after a German survey showed a slump in investor confidence, adding to pessimism about the outlook for Europe's largest economy.  The last traded price of rupee was 71.56, 24 paise weaker from its previous close of 71.32 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 4177.32 crore against gross selling of Rs 4004.00 crore, while in the debt segment, the gross purchase was of Rs 1424.43 crore with gross sales of Rs 1542.84 crore. Besides, in the hybrid segment, the gross buying was of Rs 16.12 crore against gross selling of Rs 13.80 crore.

 

The US markets ended mostly lower on Tuesday after Apple warned its revenue may be lower than forecast due to the coronavirus in China. Asian markets are trading mostly higher in early deals on Wednesday as investors tried to shake off worries about the coronavirus epidemic following a slight decline in the number of new cases. Indian markets ended lower for fourth consecutive session on Tuesday as the ongoing AGR issue weighed on telecom and financial stocks. Today, the benchmarks are likely to make an optimistic start tracking Asian peers. Traders will be taking encouragement with Finance Minister Nirmala Sitharaman's statement that the government will soon announce measures to deal with the impact of Coronavirus outbreak on the domestic industry. Besides, Indian business leaders are demanding cuts in import duties on antibiotic drugs, mobile parts and other items as the outbreak of the coronavirus has disrupted supplies from China. Some support will also come with the Reserve Bank of India (RBI) Governor Shaktikanta Das' statement that there is no reason to doubt that the government will be able to cut fiscal deficit to 3.5% of the GDP in the fiscal beginning April 1. Das said the Budget for 2020 had announcements that certain bonds will be opened up for non-resident investment without any limit. Market participants may take note of report that the country's Special Economic Zones have achieved $100 billion dollar worth of exports in FY 2019-20 amidst volatile global economy. Though, there may be some cautiousness as Moody's lowered growth forecast for the Asia-Pacific (Apac) region to 5.2% for 2020 citing the lingering impact of the coronavirus outbreak in China, the impact of which will be more pronounced on China and India. Investors may react to report that US President Donald Trump has said he is saving the big deal with India for later and he does not know if it will be done before the presidential election in November, clearly indicating that a major bilateral trade deal during his visit to Delhi next week might not be on the cards. There will be some buzz in the mining stocks with Union Coal and Mines Minister Pralhad Joshi's statement that the government looks to stop the substitutable import of thermal coal from 2023-24. Agriculture stocks will be on focus with the government's latest data showing that India is set to harvest a record wheat production of 106.21 million tonne in 2019-20 crop year on the back of good rains. 

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

11,992.50

11,923.45

12,046.15

BSE Sensex

40,894.38

40,656.07

41,087.58

                                                  

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

2,290.70

35.05

33.30

37.15

Tata Motors

527.44

161.60

157.47

166.87

SBI

385.89

317.55

311.57

321.37

ONGC

355.75

99.30

97.15

100.85

NTPC

344.59

109.60

105.30

112.40

 

  • HCL Technologies has signed a new large contract with Fonterra to modernise and manage the entire technology infrastructure Fonterra employees around the world use every day. 
  • Reliance Industries is consolidating its all media and distribution businesses spread across multiple entities into Network18 Media & Investments. 
  • Maruti Suzuki India has declared the prices of the all new IGNIS, unveiled at the Auto Expo 2020. 
  • Banque Saudi Fransi has selected the TCS BaNCS global banking platform to provide seamless and contextual customer experiences with a digital core.
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