Indian equity benchmarks ended
the choppy day of trade on flat note with negative bias on Wednesday, as
investors girded for another round of geopolitical tensions after US President
Donald Trump threatened to annihilate North Korea. Frontline gauges swung
between green and red throughout the day, as traders remained cautious ahead of
outcome of two-day Fed policy review later in the day. Sentiments also remained
dampened with SBI Research stating that economy has been on a downslide since
September 2016 and the slowdown is real and not technical, calling for more
public spending to arrest the slide. The report advocated upping of spends by
the government as a solution to the problem at hand. Meanwhile, exporters
fearing that a staggering Rs 65,000 crore could get stuck in GST refunds have
asked the government to fast-track the refund process and avoid further
deterioration in their liquidity situation. The 22nd meeting of the GST
Council, chaired by Union Finance Minister Arun Jaitley, will be held on
October 6 to deliberate on GSTN glitches and ironing out issues faced by
exporters. However, traders took some solace with report that the government
may soon unveil a package of measures to speed up growth, generate employment,
lift exports and step up investment in infrastructure. A broad framework to
boost the economy was discussed in a meeting of ministers and officials chaired
by finance minister Arun Jaitley late Tuesday evening as the government
grappled with a slump in growth. Traders also get some sense of relief with
World Bank India chief Junaid Ahmad's statement that effective implementation
of the new tax regime will help the economy achieve 8% plus growth and
described GST a ‘tectonic shift'. Junaid Ahmad, further highlighting the
positive impact of GST, said that the economic corridors of India will change
on the back of the new tax regime. Finally, the BSE Sensex slipped 1.86 points
or 0.01% to 32,400.51, while the CNX Nifty was down by 6.40 points or 0.06% to
10,141.15.
The US markets closed mostly
higher on Wednesday, with the Dow industrials and the S&P 500 carving out
fresh all-time highs, as the Federal Reserve announced that, for the first time
in nine years, it would start reducing the size of its $4.5 trillion asset
portfolio commencing in October. The US central bank kept interest rates
unchanged, as widely expected, but said it would start to shrink its balance
sheet by $10 billion a month. The Fed also signaled a December rate increase
remains on the table as the central bank embarks on an unprecedented unwind of
crisis-era asset purchases that had helped to buoy markets over the past
decade. The Fed committed to reducing the bonds they own at a pace of $10 billion
a month and increasing that pace by $10 billion every three months to a maximum
pace of $50 billion a month, or $600 billion a year. The Fed kept its targeted
federal-funds rate between 1% to 1.25%, and said the devastation caused by
Hurricanes Harvey and Irma isn't likely to materially alter the course of the
economy over the medium term, underscoring the central bank's determination to
normalize interest-rate policy. The Dow Jones Industrial Average added 41.79
points or 0.19 percent to 22,412.59, the S&P 500 edged higher by 1.59
points or 0.06 percent to 2,508.24, while the Nasdaq lost 5.28 points or 0.08
percent to 6,456.04.
Crude oil futures shrugging off
the report of significant build in US oil inventories, ended higher on
Wednesday. Inventory data was overshadowed by growing expectations that Opec
will decide to extend its agreement to cut oil output. Meanwhile, a report from
the Energy Information Administration (EIA) showed crude stockpiles rose by
roughly 4.6m barrels in the week ended Sept. 15. Gasoline inventories, fell by
roughly 2.13m barrels, while distillate stockpiles fell by 5.7m barrels,
topping expectations of a decline of 1.6m barrels. Benchmark crude oil futures
for November delivery ended higher by 79 cents or 1.6 percent at $50.69 a
barrel on the New York Mercantile Exchange. Brent crude for November delivery ended up
by 1.99 percent to $56.24 a barrel on the ICE.
Snapping
its previous session's losses, Indian rupee recovered marginally against dollar
on Wednesday, on fresh selling of the US currency by exporters and banks.
Besides, weakness of dollar against the some major currencies overseas too gave
the rupee some relief. However, gains were limited with SBI's Research report stating
that economy has been on a downslide since September 2016 and the slowdown is
real and not technical, calling for more public spending to arrest the slide.
On the global front, dollar edged closer to 2-1/2-year lows hit earlier this
month on Wednesday, as investors waited to see whether ratesetters in the
United States would signal tighter policy or hold off because of tepid
inflation data. Finally, the rupee ended at 64.27, 5 paise stronger from its
previous close of 64.32 on Tuesday.
The FIIs as per Wednesday'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 3077.03 crore against gross selling
of Rs 4654.94 crore, while in the debt segment, the gross purchase was of Rs
1016.99 crore with gross sales of Rs 152.84 crore.
The US markets turned into
consolidation mood and made a mixed closing in the last session, as traders
digested the Federal Reserve's monetary policy announcement. Fed left interest
rates unchanged as widely expected but signaled another rate hike is likely
this year. The Asian markets have made mostly a positive start and some indices
are up by over half a percent in early deals, though few are in red too on
Fed's hawkish tone. The Indian markets after a lackluster day of trade ended
flat in the last session ahead of the Fed decision. Today, the start is likely
to remain cautious on mixed global cues, though US Fed forecasts only two rate
increases in 2019 and one in 2020, but it would stick to the schedule for
normalising balance sheet by trimming its bond portfolio from October. On the
domestic front, there will be concern with some report that advance tax
payments by top corporate for September quarter has increased only marginally.
Traders will however be getting some support with Finance Minister Arun
Jaitley's hint at a package of measures to boost the economy, while virtually
ruling out any cut in duties on petroleum products to check the spike in fuel
prices. Jaitley said the government is considering additional measures to
bolster economy that has hit a three-year low of 5.7 percent in the first
quarter of the current fiscal. He said an announcement with regard to the
additional steps will be made after consulting Prime Minister Narendra Modi.
There will be some action in auto sector stocks, as Moody's Investors Service
in its latest report has said that car sales in India are expected to grow by
nine per cent this year riding on the back of GST regime as well as new product
launches.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10141.15
|
10126.55
|
10163.40
|
BSE Sensex
|
32400.51
|
32356.26
|
32472.32
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
Bank of Baroda
|
155.49
|
148.35
|
144.43
|
151.63
|
ICICI Bank
|
146.17
|
290.55
|
289.15
|
292.40
|
SBI
|
123.56
|
270.05
|
267.65
|
272.25
|
ONGC
|
120.62
|
167.70
|
164.50
|
170.90
|
Reliance Industries
|
114.03
|
847.15
|
837.33
|
864.73
|
IOC has paid Rs 2,935 crore to the Government of Odisha towards VAT payment for the period November 2015 to July 2017.
Bharti Airtel has lost 2 lakh users in August 2017.
L&T's Hydrocarbon Division has bagged a major pipeline contract with a value close to Rs 1,700 crore from Kuwait Oil Company.
Sun Pharmaceutical Industries' one of its wholly owned subsidiaries has received approval from the USFDA for a new label for Odomzo.