Indian equity markets failed to
sustain initial rally on Friday, as Sensex and Nifty settled with notable
losses of 117 and 23 points, respectively. The markets made a firm start of the
day, aided by industry body FICCI's economic outlook survey showing that
India's GDP is likely to grow 6.5 per cent in the fourth quarter ended March
2019. FICCI survey has put forth an annual median GDP growth forecast for
2019-20 at 7.1 per cent and the projection for fiscal 2020-21 has been put at
7.2 per cent. Sentiments on the street were also positive with NITI Aayog Vice
Chairman Rajiv Kumar's statement that a slew of big-bang economic reforms that
should please foreign investors are likely to be pursued in the first 100 days
of Indian Prime Minister Narendra Modi's second term. Kumar further said that
the reforms will include changes in labour laws, privatisation moves, and
creation of land banks for new industrial development. However, markets turned
negative in afternoon deals to end lower, on the back of weak cues from global
markets. Domestic sentiments got hit amid reports that the rupee witnessed high
volatility in the forex market following the allocation of key portfolios in
the newly elected government. Traders took a note of reports that the Reserve
Bank of India (RBI) has announced calendar for issuance of Sovereign Gold Bonds
for the first half of the current fiscal. The Sovereign Gold Bonds (SGB) will
be issued every month from June 2019 to September 2019. Investors also took a
note of a report that US-based India-centric business advocacy and strategic
group has sought establishing an India Trade Representative under the Prime
Minister's Office for all international trade negotiations to be handled by one
office with a focused approach. Finally, the BSE Sensex lost 117.77 points or
0.30% to 39,714.20, while the CNX Nifty was down by 23.10 points or 0.19% to
11,922.80.
The US markets ended
significantly lower on Friday, with losses of around one and a half percent
each, after President Donald Trump revealed plans to use tariffs to compel
Mexico to make efforts to stop the flow of illegal immigrants across the
country and into the US. The Dow dropped to a four-month closing low, while the
Nasdaq and the S&P 500 hit their lowest closing levels in well over two
months. Trump said on June 10, the United States will impose a 5% Tariff on all
goods coming into our Country from Mexico, until such time as illegal migrants
coming through Mexico, and into our Country, STOP. He added that the Tariff
will gradually increase until the Illegal Immigration problem is remedied, at
which time the Tariffs will be removed. Trump revealed in a subsequent White
House statement the tariffs will be raised to 10 percent on July 1, if the
crisis persists, with tariffs eventually rising as high as 25 percent by
October 1. The president argued the sustained imposition of tariffs will
produce a massive return of jobs back to US, describing the move as an effort
to firmly and forcefully stand up for America's interests. Meanwhile,
reflecting the collapse of US-China trade talks, the University of Michigan
released a report showing a bigger than expected downward revision to its
reading on US consumer sentiment in the month of May. The report said the
consumer sentiment index for May was downwardly revised to 100 from the
preliminary reading of 120.4. The index remains notably higher than the final
April reading of 97.2. Dow Jones Industrial Average slipped 354.84 points or
1.41 percent to 24815.04, Nasdaq declined 114.57 points or 1.51 percent to
7453.15 and S&P 500 was down by 36.80 points or 1.32 percent to 2752.06.
Crude oil futures ended sharply
lower and settled at near 16-week low on Friday as concerns over the global
economy and demand for oil heightened amid rising worries about trade dispute.
The US President Donald Trump's announcement of new tariffs on all goods coming
from Mexico has dented investor sentiment, which is already down due to the
ongoing US-China trade spat. Trump said that from June 10, a 5% tariff would be
imposed on goods imported from Mexico and then added that the tariff would
slowly rise until the problem of illegal immigration of drugs and people into
the US from Mexico is resolved. At the same time, more evidence this week of
solid US oil supplies continued to complicate the management of the
Organization of the Petroleum Exporting Countries' own production cut, a policy
due for review later in June. Benchmark crude oil futures for July declined
$3.09 or 5.5 percent to settle at $53.50 a barrel on the New York Mercantile
Exchange. July Brent crude was down by $2.38 or 3.6 percent to settle at $64.49
a barrel on London's Intercontinental Exchange.
Snapping three day falling streak, Indian rupee staged a smart
recovery against dollar on Friday, following heavy dollar selling from banks
and exporters. Sentiments turned optimistic with industry body FICCI's economic
outlook survey showing that India's GDP is likely to grow 6.5 per cent in the
fourth quarter ended March 2019. FICCI survey has put forth an annual median
GDP growth forecast for 2019-20 at 7.1 per cent and the projection for fiscal
2020-21 has been put at 7.2 per cent. Besides, the dollar losing muscle against
other currencies overseas helped the domestic currency rebound. However, gains
remain capped as cautiousness remained in markets ahead of March quarter GDP
data, scheduled for release later in the day. On the global front, Japanese yen
jumped against the dollar after U.S. President Donald Trump's shock threat to
slap new tariffs on Mexico, which risked tipping an already struggling global
economy into recession. Finally, the rupee ended at 69.70, 17 stronger weaker from
its previous close of 69.87 on Thursday.
The FIIs as per Friday'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 7552.41 crore against gross selling
of Rs 5479.78 crore, while in the debt segment, the gross purchase was of Rs
836.06 crore with gross sales of Rs 1513.69 crore. Besides, in the hybrid
segment, the gross buying was of Rs 4.89 crore against gross selling of Rs 1.79
crore.
The US markets ended sharply
lower on Friday as investors feared President Donald Trump's surprise threat of
tariffs on all Mexico imports, amid a worsening trade war with China. Asian
markets are trading mixed on Monday amid increasing concerns over the state of
global trade. Indian markets gave up early gains and settled in red territory
on Friday on account of profit booking by investors amid weak cues from Asian
peers. Today, the start of new week is likely to be malignly in green as tax
mop-up crosses Rs 1 lakh crore for the third straight month. The Goods and
Services Tax (GST) collection in May came in at Rs 1,00,289 crore, clocking a
growth of about 7% compared with the mop-up of Rs 94,016 crore in the
corresponding month last fiscal. Some support will also come with report that
overseas investors pumped in a net amount of Rs 9,031 crore into the Indian
capital markets in May on expectations of more business-friendly measures
following the BJP's landslide victory in the general elections. Investors will
be eyeing manufacturing PMI data to be out later in the day. Traders will also
be keenly eyeing the Reserve Bank of India's (RBI) second bi-monthly monetary
policy statement for 2019-20 later in the week. There is expectation that the
RBI may cut repo rate by 25 basis points. Besides, the fiscal deficit for
2018-19 came in at 3.39% of GDP, marginally lower than 3.4% projected in the
revised estimates of the Budget, mainly due to lower expenditure and increase
in non-tax revenue. However, there may be some cautiousness as the Central
Statistics Office (CSO) data showed that economic growth slowed to a 5-year low
of 5.8% in the fourth quarter of 2018-19, pushing India behind China, due to poor
showing by agriculture and manufacturing sectors. For full year 2018-19, the
economic growth is estimated at 6.8%, compared 7.2% in the previous year.
Traders will also be concerned about a report that the growth of eight core
infrastructure sectors slowed down to 2.6% in April, from 4.7% in the same
month of pervious year, due to negative growth in crude oil, natural gas and
fertiliser output. Besides, confirming unemployment rate projected in a
pre-election leaked report, the government said joblessness in the country was
6.1% of total labour force during 2017-18, the highest in 45 years. There will
be some buzz in the banking sector stocks with rating agency Fitch's statement
that the performance of India's banking sector is likely to be below average for
the next two years because it is struggling with poor asset quality and weak
core capitalization. There will be some reaction in auto industry stocks
reacting to their monthly sales numbers.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,922.80
|
11,821.75
|
12,031.55
|
BSE Sensex
|
39,714.20
|
39,351.51
|
40,099.61
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
633.69
|
147.80
|
144.20
|
154.20
|
SBI
|
325.88
|
352.50
|
345.47
|
358.72
|
ITC
|
262.82
|
278.55
|
273.50
|
287.55
|
ICICI Bank
|
246.45
|
423.70
|
415.27
|
431.17
|
Coal India
|
222.35
|
253.50
|
249.48
|
260.23
|
ONGC's overseas subsidiary -- ONGC Videsh has registered increase in production of Oil & Gas by 4.7% with net production of 14.833 MMTOE in FY19, as compared to 14.164 MMTOE in FY18.
Maruti Suzuki NEXA, with 28 outlets spread across 15 cities in Telangana and Andhra Pradesh, has continued to reinforce its presence in these two states.
Bharti Airtel's average revenue per user rose by 6.5 percent to Rs 123 in Q4FY19 which is still not at sustainable level for the sector.
Larsen & Toubro has acquired 26,974 equity shares of Mindtree on May 30, 2019.