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NSE Intra-day chart (04 October 2019)
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Market Commentary 07 October 2019
Benchmarks to get a cautious start on Monday


Repo rate cut by the Reserve Bank of India (RBI) failed to cheer Indian equity bourses on Friday, with Sensex & Nifty ending lower by over 1%. The RBI cut the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points (bps) to 5.15% from 5.40% with immediate effect. After a firm start, markets remained in green for the first half, aided with Niti Aayog CEO Amitabh Kant's statement that there will be many more structural reforms by the government in the coming days to push economy to a high growth trajectory. He added that the government announced a series of economic boosters including capitalization of public sector banks, merging some of them, package for exports, and bringing down corporate tax rate. However, in the second half of the session, indices turned negative to settle in red, after the RBI sharply cut its economic growth projection for this fiscal to 6.1 percent from 6.9 percent earlier, but expressed hope that the growth will recover in the second half of 2019-20. The central bank's estimates come in the wake of GDP growth sliding to a six-year low of 5 percent in the June quarter, on a massive slowdown in consumption and private sector investments. Sentiments also remained pessimistic, as India's services sector activity contracted in September 2019. As per the survey report, the seasonally adjusted Nikkei Services Business Activity Index eased to 48.7 in September from 52.4 in August. Finally, the BSE Sensex fell 433.56 points or 1.14% to 37,673.31, while the CNX Nifty was down by 139.25 points or 1.23% to 11,174.75.


Extending their winning streak, the US markets and ended higher, with gains of over a percent, on Friday following the release of a closely watched Labor Department report showing weaker than expected job growth but an unexpected drop in the unemployment rate to a nearly 50-year low. The mixed data seemed to serve the dual purpose of reinforcing expectations the Federal Reserve will continue cutting interest rates while at the same offsetting concerns about a potential recession. The report said non-farm payroll employment rose by 136,000 jobs in September compared to street estimates for an increase of about 145,000 jobs. Meanwhile, the increases in employment in July and August were upwardly revised to 166,000 jobs and 168,000 jobs, respectively, reflecting the addition of 45,000 more jobs than previously reported. The average monthly job growth has still slowed from 223,000 jobs per month in 2018 to 161,000 jobs per month so far in 2019. The Labor Department also said the unemployment rate fell to 3.5 percent in September from 3.7 percent in August. Street had expected to unemployment rate to remain unchanged. With the unexpected decrease, the unemployment rate dropped to its lowest level since hitting a matching rate in December of 1969. The unexpected drop in the unemployment rate came as a 391,000-person jump in the household survey measure of employment more than offset an 117,000-person increase in the size of the labor force. Even with the unemployment rate hitting a nearly 50-year low, the report said average hourly employee earnings edged down by a penny to $28.09 in September after rising by 11 cents in August. Compared to the same month a year ago, average hourly earnings were up by 2.9 percent in September, reflecting a notable slowdown from the 3.2 percent increase in August. Dow Jones Industrial Average jumped 372.68 points or 1.42 percent to 26,573.72, Nasdaq surged 110.21 points or 1.40 percent to 7,982.47 and S&P 500 was up by 41.38 points or 1.42 percent to 2,952.01.


Crude oil futures snapped eight-day losing streak and ended higher on Friday after fairly decent monthly jobs data from the US Labor Department eased concerns about growth in the world's largest economy and the outlook for energy demand. Besides, fall in oil rig count for the sixth straight week also supported the oil prices. Number of active US rigs drilling for oil fell by three to 710 this week. That followed declines in each of the last six weeks. Though, upside remained capped as Saudi Arabia said it has fully restored its oil production following the attacks on its oil facilities in mid-September. Benchmark crude oil futures for November gained 36 cents or 0.7 percent to settle at $52.81 a barrel on the New York Mercantile Exchange. December Brent rose 66 cents or 1.1 percent to settle at $58.37 a barrel on London's Intercontinental Exchange.


Indian rupee ended almost flat against dollar on Friday, on account of buying in American currency by banks and importers. Traders remained wary as the Reserve Bank of India (RBI) reduced GDP growth forecast to 6.1 percent from its earlier estimate of 6.9 per cent in its fourth bi-monthly monetary policy meeting. Rupee was also weighed down on the back of sharp losses in the local equities. However, traders took some support with Niti Aayog CEO Amitabh Kant's statement that there will be many more structural reforms by the government in the coming days to push economy to a high growth trajectory. On the global front, dollar steadied on Friday before monthly jobs figures, as weak manufacturing and services data this week raised concerns the US economy was losing momentum and could potentially under-cut the greenback's rally.  Finally, the rupee ended at 70.88, 1 paise weaker from its previous close of 70.87 on Thursday.


The FIIs as per Friday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 4649.40 crore against gross selling of Rs 5761.27 crore, while in the debt segment, the gross purchase was of Rs 809.60 crore with gross sales of Rs 896.30 crore. Besides, in the hybrid segment, the gross buying was of Rs 113.77 crore against gross selling of Rs 109.07 crore.


The US markets settled in green territory on Friday following US jobs data that eased recession fears even as investors continued to expect more Federal Reserve interest rate cuts. Asian markets are trading mostly higher on Monday as investors awaited a fresh round of US-China trade negotiations set to begin later this week. Indian markets ended lower with cut of over a percent on Friday as RBI slashed its growth forecast for 2019-20 to 6.1% from 6.9%, saying domestic demand conditions remained weak amid subdued prospects for exports. Today, the start of a holiday truncated week is likely to be cautious amid economic slowdown concerns. Traders will be eyeing the release of Index of Industrial Production (IIP) data for the month of August on later in the week. Also, investors will be looking ahead to the start of July-September quarter earnings season, with IT bellwether TCS and Infosys reporting their Q2 numbers later in the week. Though, some support may come later in the day with India Inc's statement that the reduction in key policy rate by the RBI is expected to revive investment and encourage consumption, thereby kick-starting the sluggish economy. Traders may also take note of NITI Aayog vice chairman Rajiv Kumar's statement that the government expects economy to grow by 6.5% in the current fiscal and that all efforts were focused on bringing India to a higher growth trajectory. Besides, the foreign exchange reserves touched a record high of $434.6 billion as on October 1. Meanwhile, the finance ministry will kick-start the exercise to prepare annual Budget for 2020-21 from October 14 which, among other thing, will have to address critical issues pertaining to slowdown in growth and subdued revenue collection. Banking stocks will be in focus with report that Reserve Bank of India (RBI) Governor Shaktikanta Das tried to assuage fears about the banking sector, reeling from one crisis after another, by claiming that it was sound and stable. Referring to the crisis at the Punjab and Maharashtra Cooperative (PMC) Bank, he said the RBI will not allow any cooperative bank to collapse. There will be some reaction in non-banking financial companies-micro finance institutions (NBFC-MFIs) stocks as the RBI raised the lending cap for microfinance institutions to Rs 1.25 lakh, against the earlier limit of Rs 1 lakh, to improve credit availability in rural and semi-urban areas. Power stocks will be buzzing with report that India is unlikely to produce 175 gigawatts of renewable energy by 2022. In fact, it will miss the target by 42% amid record-low renewable power tariffs.


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  • Bharti Airtel has been chosen as the strategic Network Solution partner by Faridabad Smart City to transform the NCR satellite town of Faridabad into a Smart City. 
  • Maruti Suzuki India has sold over 2 lakh BS6 compliant vehicles. 
  • Tata Motors has launched its limited edition Tiago WIZZ. 
  • Wipro has renewed and extended its partnership with XebiaLabs as their Strategic Enterprise DevOps Partner across the globe.
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