Indian equity bourses snapped
3-day gaining streak to close on lackluster note, with the Sensex and the Nifty
losing around half a percent each. The start of the day was a cautious,
impacted with Moody's Investors Service's statement that the economic measures
announced by Finance Minister Nirmala Sitharaman are unlikely to provide some
form of confidence and improve business sentiment and consumer sentiment.
Moody's, which has lowered India's gross domestic product (GDP) forecast to
6.4% for FY20, said there is significant uncertainty in terms of the growth
prospects both because of domestic as well as external factors. Market
participants rolled-over their positions ahead of the August Futures &
Options (F&O) series expiry due on Thursday. Weakness continued over the
street in the second half of the session, on the back of mixed cues from global
markets. Domestic sentiments remained pessimistic, as India Ratings and
Research (Ind-Ra) revised India's gross domestic product (GDP) growth in
current financial year downwards to 6.7 per cent -- marking a six-year low --
from its earlier forecast of 7.3 per cent. The agency expects FY20 to be the
third consecutive year of subdued growth pushed by a slowdown in consumption
demand, delayed and uneven progress of monsoon so far, decline in manufacturing
growth, inability of Insolvency and Bankruptcy Code to resolve cases in a
time-bound manner and rising global trade tension adversely impacting exports.
Finally, the BSE Sensex lost 189.43 points or 0.50% to 37,451.84, while the CNX
Nifty was down by 59.25 points or 0.53% to 11,046.10.
The US markets ended higher on
Wednesday as the energy sector got a lift from higher oil prices. Oil jumped
after the Energy Information Administration said US crude inventories plummeted
by 10 million barrels last week, the largest drop in five weeks. Reflecting the
strength in the energy sector, the Philadelphia Oil Service Index spiked by 3.6
percent, the NYSE Arca Natural Gas Index surged up by 2.4 percent and the NYSE
Arca Oil Index advanced by 1.7 percent. Significant strength also emerged among
transportation stocks, as reflected by the 1.8 percent jump by the Dow Jones
Transportation Average. Besides, the rebound on markets also came as bond
yields climbed off their worst levels of the session, although they remained
negative. Earlier in the day, the negative spread between the ten-year and
two-year yields widened to its lowest level since 2007, with an inverted yield
curve widely seen as an indicator that a US recession is looming. The White
House has sought to downplay recession concerns, although the inverted yield
curve combined with the escalating US-China trade war have generated
considerable uncertainty on Wall Street. Meanwhile, the US is scheduled to
impose the first stage of US tariffs on $300 billion worth of Chinese goods on
September 1. China is set to respond with tariffs on US products on the same
day. Dow Jones Industrial Average surged 258.20 points or 1.00 percent to
26036.10, Nasdaq rose 29.94 points or 0.38 percent to 7856.88 and S&P 500
was up by 18.78 points or 0.65 percent to 2887.94.
Crude oil futures ended higher on
Wednesday, buoyed by data showing a significant drop in US crude stockpiles
last week. The Energy Information Administration (EIA) reported that US crude
supplies fell by 10 million barrels for the week ended August 23. That was the
biggest one-week decline reported by the government agency since the 10.8
million-barrel fall for the week ended July 19. Analysts polled by S&P
Global Platts, on average, expected a decline of 4.7 million barrels, while the
American Petroleum Institute on Tuesday reported an 11.1 million-barrel
decrease. The EIA data also showed that gasoline and distillate inventories
each fell by 2.1 million barrels last week. Benchmark crude oil futures for
October gained 85 cents or 1.6 percent to settle at $55.78 a barrel on the New
York Mercantile Exchange. October Brent surged 98 cents or 1.7 percent to settle
at $60.49 a barrel on London's Intercontinental Exchange.
Reversing
previous session's strong gains, Indian rupee ended weaker against the US
dollar on Wednesday, on the back of consistent demand for the greenback from
state-run banks and importers. Sentiments remained down-beat with India Ratings
and Research (Ind-Ra) revising India's gross domestic product (GDP) growth in
current financial year downwards to 6.7 per cent -- marking a six-year low --
from its earlier forecast of 7.3 per cent. The agency expects FY20 to be the
third consecutive year of subdued growth pushed by a slowdown in consumption
demand, delayed and uneven progress of monsoon so far, decline in manufacturing
growth, inability of Insolvency and Bankruptcy Code to resolve cases in a
time-bound manner and rising global trade tension adversely impacting exports.
Besides, a weak trend at Dalal Street coupled with US dollar's gain against
other currencies overseas weighed on the local unit. On the global front, pound
slumped against dollar on Wednesday as Britain's government moved to extend the
suspension of parliament, increasing the likelihood of a no-deal Brexit.
Finally, the rupee ended at 71.77, 29 paise weaker from its previous close of
72.48 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 13358.46 crore against gross
selling of Rs 14418.66 crore, while in the debt segment, the gross purchase was
of Rs 3847.98 crore with gross sales of Rs 1274.03 crore. Besides, in the
hybrid segment, the gross buying was of Rs 14.22 crore against gross selling of
Rs 15.33 crore.
The US markets ended in green on
Wednesday amid light trading as investors awaited new developments in the
increasingly unpredictable Sino-American trade war. Asian markets are trading
lower on Thursday as investors continue to watch the yield curve in US
Treasuries, which inverted further overnight. Indian markets snapped three-day
winning streak and settled lower on Wednesday with cut of around half a percent
each, led by declines in banking, auto and metal shares, amid weak global cues.
Today, the start of the F&O series expiry session is likely to be negative
amid subdued cues from Asian peers. There will be some cautiousness as India
Ratings lowered the country's growth forecast to six-year low of 6.7% for the
current fiscal from an earlier estimate of 7.3% on account of slowdown in
consumption and moderation in industrial growth among other factors. This would
be the third consecutive year of subdued growth. Traders will also be concerned
with a private report indicating that the Indian economy likely expanded at its
slowest pace in more than five years in the April-June quarter, driven by weak
investment growth and sluggish demand. However, some support may come later in
the day as to boost the ailing economy, the government on relaxed foreign
direct investment (FDI) rule for foreign single-brand retailers and also
permitted foreign investment in contract manufacturing and coal mining. In the
first decision, the cabinet has allowed online retailing under single-brand
retail and relaxed rules for complying with the mandatory 30% local sourcing
norms by foreign single-brand retailers. In the second decision, 100% FDI in
contract manufacturing under automatic route has been allowed and 26% FDI has
been allowed in digital media. There will be some reaction in metal stocks with
the World Steel Association's report that India's crude steel output increased
by 1.7% to 9.215 million tonne in July 2019 as compared to 9.059 MT during the same month a year ago.
Sugar stocks will be in focus as the government approved Rs 6,268 crore export
subsidy for 60 lakh tonnes of sugar. A lump sum export subsidy of Rs 10,448 per
tonne will be given to sugar mills in the 2019-20 marketing year
(October-September), costing the exchequer Rs 6,268 crore as a subsidy.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,046.10
|
10,979.28
|
11,121.28
|
BSE Sensex
|
37,451.84
|
37,238.08
|
37,676.71
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
2,231.68
|
59.50
|
56.65
|
63.75
|
Tata Motors
|
742.46
|
116.35
|
112.77
|
121.97
|
Indiabulls Housing Finance
|
195.89
|
457.25
|
445.38
|
471.23
|
SBI
|
189.80
|
284.90
|
282.52
|
286.97
|
Tata Steel
|
126.42
|
336.95
|
329.93
|
347.43
|
Power Grid has received approval for investment in Transmission System for Solar Energy Zones in Rajasthan, at an estimated cost of Rs 2,578.47 crore with commissioning schedule as December, 2020.
Vedanta has collaborated with government think-tank Niti Aayog to help improve the quality of life of the people of Kalahandi district of Odisha.
Infosys has entered into collaboration with Microsoft and JCI to deliver smart buildings and spaces solutions that will accelerate the convergence of physical and digital infrastructure.
Maruti Suzuki India has launched a distinctive initiative Service on Wheels.