After four days of losses, the
equity benchmarks rebounded on Wednesday to end the trading session in green
terrain, mirroring positive cues from European markets. The markets made a
gap-up opening and remain firm for the most part of the session, as street got
comfort with a report stating that government is responding well to the rising
trade tensions between the world's two largest economies, maintaining a stance
that serves the cause of Indian exporters best.
Adding some optimism, Asian Development Bank's (ADB) latest report said
that greenfield or new investments generated some 667,000 jobs in 2017-mainly
in India, the PRC, Viet Nam, the Philippines, and Singapore-in real estate,
software and information technology (IT) services, and electronic components,
among others. Traders took note of the commerce ministry's statement that it is
important to resume long-stalled talks for the proposed free trade agreement
(FTA) between India and the European Union (EU) at the earliest and without any
pre-conditions, in order to boost trade and investment. In the last leg of the
trade, the markets gave up all the gains to enter in the red, amid reports that
Private Equity (PE) investments moderated to $14.60 billion during
January-September period, owing to macroeconomic concerns, market volatility
and valuations of companies. Some concerns also came with a private report
which stated that the Indian growth story has been far from perfect. That is
not an understatement by any stretch of imagination. A growing challenge for
the economy is the fast-evolving problem of inequality. But, the volatility was
for the short period, as the key indices recovered to settle the day in green,
supported by the Directorate General of Foreign Trade (DGFT)'s statement that
India relaxed some restrictions on imports of petcoke for use as feedstock in
some industries. Meanwhile, the Insolvency and Bankruptcy Board of India (IBBI)
notified the mechanism to be followed for issuing regulations under the
insolvency law. A set of procedures would be followed for making or amending
regulations under the Insolvency and Bankruptcy Code (IBC). Finally, the BSE
Sensex surged 186.73 points or 0.55% to 34,033.96, while the CNX Nifty was up
by 77.95 points or 0.77% to 10,224.75.
Extending previous session
losses, the US markets ended sharply lower on Wednesday, with the Dow declining
to its lowest closing level in over three-months, while the Nasdaq and the
S&P 500 tumbled to five-month closing lows. The renewed selling pressure on
Wall Street largely reflected amid another negative reaction to the latest
batch of earnings news from several big-name companies. Shares of AT&T
moved substantially lower after the telecom giant reported third quarter earnings
that came in below street estimates. Delivery giant UPS (UPS) also fell sharply
after reporting third quarter earnings that matched estimates but weaker than
expected revenues. Sentiments also remained under pressure with the release of
a report from the Commerce Department showing a steep drop in new home sales in
the month of September. The report said new home sales plunged by 5.5% to an
annual rate of 553,000 from the revised August rate of 585,000. Street had
expected new home sales to edge down to a rate of 625,000 from the 629,000
originally reported for the previous month. With the substantial decrease, new
home sales fell to their lowest level since hitting a rate of 546,000 in
December of 2016. Dow Jones Industrial Average slipped 608.01 points or 2.41
percent to 24,583.42, Nasdaq declined 329.14 points or 4.43 percent to 7,108.40
and S&P 500 was down by 84.59 points or 3.09 percent to 2,656.10.
After declining sharply in
previous session, crude oil futures ended higher on Wednesday amid concerns
over weakening demand and on Saudi Arabia's reassurance that it would increase
output to offset loss of Iranian oil post US sanctions from early November.
Traders overlooked the US Energy Information Administration's report that US
crude inventories rose by 6.35 million barrels in the week to October 19, it
was fifth straight week rise, exceeding street's forecasts by a significant
margin. Benchmark crude oil futures for December gained 39 cents or 0.6 percent
to settle at $66.82 a barrel on the New York Mercantile Exchange. December
Brent crude fell 27 cents or 0.4 percent to settle at $76.17 a barrel on
London's Intercontinental Exchanged.
Snapping
two days of depreciation, Indian rupee ended considerably higher against dollar
on Wednesday, on persistent selling of the American currency by exporters.
Sentiments turned optimistic with a report stating that government is
responding well to the rising trade tensions between the world's two largest
economies, maintaining a stance that serves the cause of Indian exporters best.
The market participants overlooked private report stating that liquidity crunch
may hurt economic growth. The report penciling in a few basis points shave off
in economic growth in the December quarter if the hoarding of cash by banks and
mutual funds continue threatening on-lending non-banking finance companies, the
lifeline of lakh of medium and small enterprises. The domestic unit also found
support from strong gains in local equity markets. On the global front, euro
skidded more than half a percent to its weakest since Aug. 20 on Wednesday
after signs that economic growth could be slowing across the euro zone.
Finally, the rupee ended at 73.16, 41 paise stronger from its previous close of
73.57 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 4997.55 crore against gross selling of Rs 5099.03 crore, while
in the debt segment, the gross purchase was of Rs 298.69 crore with gross sales
of Rs 1992.00 crore. Besides, in the hybrid segment, the gross buying was of Rs
0.45 crore against gross selling of Rs 1.55 crore.
The US markets ended lower on
Wednesday after another round of mixed US earnings that exacerbated fears about
slowing profits. Asian markets were trading in red on Thursday, tracking
decline on Wall Street, with trading floors awash with negativity on
geopolitical concerns and following weak US economic and earnings data.
Snapping four-day losing streak, Indian markets ended higher on Wednesday, on
the back of easing crude oil prices, which dropped below $75 per barrel,
coupled with a recovery in the rupee. Today, the markets are likely to make
gap-down opening of F&O expiry session, following weak global cues amid
economic growth concerns. There will be some cautiousness with a private report
that Indian financial markets' liquidity position has worsened with cash
deficit widening to about Rs 1.4 lakh crore this week compared with a small
surplus in first week of October. There will be some concern with a report that
the latest government data shows that during the first six months of the
financial year, trade deficit in oil already touched $46.6 billion, up 67% from
27.9 billion during the same period in 2017-18. However, traders may take some
support with private report that corporate India's business optimism for the
October-December quarter improved marginally on expectations of higher festive
season demand, implementation of the 7th Pay Commission awards and increase in
minimum support price (MSP) of Kharif crops. Traders may take note of Economic
Affairs Secretary Subhash Chandra Garg's statement that some problems are
temporary like oil prices, currency etc and those should be seen in that
context. Oil prices have come down, currency is now stabilizing. Similarly, the
non-banking financial companies (NBFCs) liquidity problems are also temporary.
Meanwhile, the Directorate General of Foreign Trade (DGFT) said that India
relaxed some restrictions on imports of petcoke for use as feedstock in some
industries. India allowed imports of 500,000 tonnes of petcoke per year by
aluminium companies and 1.4 million tonnes of petcoke by calcined petcoke
makers. There will be some buzz in the telecom sector stocks with Moody's
Investor Service in its latest report stating that Indian telecom players, who
are involved in an intense competition, are unlikely to see any increase in
average revenue per user (ARPU) soon. There will be some reaction in auto
sector stocks with report that emphasising on the urgent need to move to a
cleaner fuel as early as possible, the Supreme Court directed that only Bharat
Stage VI (BS-VI) vehicles shall be sold across the country from April 1, 2020.
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
|
10,224.75
|
10,137.42
|
10,301.37
|
BSE Sensex
|
34,033.96
|
33,739.70
|
34,314.60
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
380.09
|
204.00
|
197.33
|
215.33
|
ICICI Bank
|
331.04
|
322.00
|
315.50
|
329.25
|
SBI
|
256.37
|
255.70
|
251.73
|
260.73
|
Indian Oil
Corporation
|
172.61
|
137.55
|
133.88
|
140.23
|
Tata Motors
|
154.22
|
170.65
|
168.10
|
174.10
|
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