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NSE Intra-day chart (18 December 2019)
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Market Commentary 19 December 2019
Markets to get a pessimistic start amid weak global cues

 

Record setting rally continued on the Dalal Street for the second straight day on Wednesday, with Sensex and Nifty ending higher by around half a percent. After a firm start, key indices remained positive during the whole day, as the Department of Revenue is eyeing to collect at least Rs 1.10 lakh crore as monthly Goods and Services Tax (GST) collection for the next four months each. Adding some relief, Defence Minister Rajnath Singh said that India is impacted to some extent by the global economic slowdown but expressed confidence that the country will come out of the difficult situation within a short time. Indices added more gains to their northward rally in second half of the session, aided with Union Minister Nitin Gadkari's statement that efforts are on to bolster the economy & create five crore jobs. He also said the government is according high priority to the economy but at the same time, security issues are also important & the government cannot work in silos. Investors took note of CII's President Vikram Kirloskar's statement that the revised corporate tax rates are competitive & its impact will be visible in the next two years. He emphasised that the government listened to the industry word by word on lowering rates. Finally, the BSE Sensex gained 206.40 points or 0.50% to 41,558.57, while the CNX Nifty was up by 56.65 points or 0.47% to 12,221.65.

 

The US markets ended mostly lower on Wednesday as traders kept an eye on developments on Capitol Hill, where House Democrats are expected to vote to impeach President Donald Trump. However, Nasdaq Composite was able to extend its winning streak with the boost in sentiment from a preliminary US-China trade deal tailing off by the end of the session. The choppy trading on markets came as the reports the US and China have agreed on a phase one trade deal has helped maintain positive sentiment, but traders seem reluctant to make significant moves. Traders generally remained optimistic about an eventual trade deal throughout the negotiations, and the actual agreement on a deal has subsequently not led to much further upside. Overall trading activity remained light throughout the day, with a lack of major US economic data keeping some traders on the sidelines. Reports on weekly jobless claims, existing home sales and personal income and spending may attract attention in the coming days as traders look for the next major catalyst to drive the markets.  Stock specific development, FedEx shares dropped more than 9% on disappointing quarterly numbers. The company's earnings and revenue missed Street expectations. FedEx also cut its guidance for the rest of its fiscal year. FedEx cited weaker economic conditions across the globe and losing a large customer.

 

Crude oil futures settled marginally higher on Wednesday as US government data revealed a weekly decline in domestic crude supplies that was smaller than the market expected. The Energy Information Administration (EIA) reported that US crude supplies fell by 1.1 million barrels for the week ended December 13. That was less than the 2.5 million-barrel average decline expected by Street. The American Petroleum Institute on Tuesday reported a 4.7 million-barrel climb. The EIA data also revealed supply increases of 2.5 million barrels for gasoline and 1.5 million barrels for distillates. Benchmark crude oil futures for January added 8 cents or 0.1 percent to settle at $61.02 a barrel on the New York Mercantile Exchange. February Brent gained 16 cents or 0.2 percent to settle at $66.26 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended almost flat against dollar on Wednesday, as rising crude oil prices kept investors edgy. Traders failed to take support with Defence Minister Rajnath Singh's statement that India is impacted to some extent by the global economic slowdown but expressed confidence that the country will come out of the difficult situation within a short time. Dollar's strength against major global currencies overseas also weighed on the domestic unit. On the global front, US dollar strengthened across the board on Wednesday, rising against a battered euro ahead of the German Ifo business survey, and versus a pound that has lost all of its election gains on fears Britain could leave the EU without a trade deal. Finally, the rupee ended at 70.97, 1 paise stronger from its previous close of 70.98 on Tuesday.

 

The FIIs as per Wednesday'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 7867.96 crore against gross selling of Rs 6654.99 crore, while in the debt segment, the gross purchase was of Rs 896.53 crore with gross sales of Rs 1511.84 crore. Besides, in the hybrid segment, the gross buying was of Rs 28.36 crore against gross selling of Rs 26.54 crore.

 

The US markets closed mostly lower on Wednesday as rancor continued in Washington and shipper FedEx issued a profit warning. Asian markets are trading in red on Thursday following lackluster trade on Wall Street. Indian markets ended at fresh record highs on Wednesday, tracking gains in index heavyweight HDFC Bank, RIL and ITC amid unabated foreign fund inflows. Today, the markets are likely to make pessimistic start amid weak global cues and economic growth concerns. Traders will be concerned with former Chief Economic Adviser Arvind Subramanian's statement that India is facing a Great Slowdown with its economy headed for intensive care unit primarily due to a second wave of the twin balance sheet crisis at banks. Also, there will be some cautiousness with repro that most of the states opposed a change in slabs or hike in Goods and Services Tax (GST) during the crucial GST Council meeting on Wednesday arguing an increase in the levies would have adverse implications for the economy facing a slowdown. Besides, the GST Council has fixed a uniform tax rate of 28 per cent on both state and private lottery. Traders may take note of report that some state governments have asked Union Finance Minister Nirmala Sitharaman to raise their permissible fiscal deficit limit, from the current 3 per cent of gross state domestic product (GSDP) to 4 per cent, after adjusting for inflation. However, some respite may come later in the day with industry body Nasscom's statement that technology startups alone have created 60,000 direct jobs this year and overall the IT sector will be a positive hirer in the current financial year. Meanwhile, amid rising inward shipments of gold, the government has imposed restrictions on import of precious metals. According to a notification issued by the Directorate General of Foreign Trade (DGFT), import of gold in any form has been placed in restricted category from the free category. There will be some buzz in the sugar stocks with industry body ISMA's statement that India's sugar production stood at 4.58 million tonne till December 15 of the ongoing marketing year, down 35 percent from the year-ago period, owing to a sharp fall in output in Maharashtra and Karnataka. Insurance stocks will be in focus with the Insurance Regulatory and Development Authority of India's (Irdai) data showing that non-life insurance companies registered a rise of 13.1 per cent in their collective premium in November to Rs 14,590.50 crore.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

12,221.65

12,177.50

12,251.75

BSE Sensex

41,558.57

41,406.44

41,662.74

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Yes Bank

1,302.83

46.75

45.77

47.97

Tata Motors

638.61

174.80

168.67

182.72

Tata Steel

400.28

444.75

435.60

454.35

SBI

264.49

326.95

323.32

333.07

Bharti Airtel

176.55

438.30

432.60

445.55

 

  • Axis Bank has launched co-branded credit card in partnership with Indian Oil Corporation. 
  • Tata Motors is expecting CV business to remain in slow lane for the next few months and witness turnaround only by the second half of the next fiscal. 
  • Infosys has launched three blockchain-powered distributed applications for government services, insurance, and supply chain management domains. 
  • NTPC has made an application to list Commercial Paper at BSE for an Issue Size of Rs 2,000 crore.
News Analysis