Indian equity
benchmarks ended the volatile day of trade on quiet note on Tuesday, as traders
remained on sidelines ahead of Karnataka elections whereby the market
participants expect a victory for the BJP in the upcoming elections. Markets
started the session on an optimistic and traded firmly for most part of the day
as traders took some encouragement from ICRA's report which highlighted that
the estimated surge in states' borrowings in the first quarter do not reflect a
deterioration of their financial health as it is driven more by the changes in
central devolution. The report added that the planned increase in SDL (state
development loans) issuance in Q1 of FY19 should not be construed as an
indicator of a sharp fiscal deterioration of the states' fiscal health. Some
support also came with Reserve Bank of India reportedly intervening in the
currency markets to prevent a further slide in the Indian rupee, which breached
the 67 mark to a dollar for the first time in 15 months amid a widening trade
gap and runaway import bills fuelled by high crude-oil prices. Meanwhile, a private
report highlighted that India is projected to have a skilled labour surplus of
245 million workers by 2030, mainly on the back of vast supply of working age
citizens, even as most of developed and developing economies are expected to
grapple with talent crunch at that time. Sentiments remained positive with
finance ministry's statement that World Bank will provide a $200 million loan
to help the government achieve its goal of reducing stunting in children 0-6
years of age from 38.4 per cent to 25 per cent by the year 2022. However,
markets pared almost all of their gains and turned volatile on UN's report that
the Goods and Services Tax (GST) as well as protracted issues of corporate and
bank balance sheet problems pushed India's economic growth downward in 2017 but
a gradual recovery is expected and the country's economy is forecast to grow at
7.2 percent in 2018. Finally, the BSE Sensex rose 8.18 points or 0.02% to
35,216.32, while the CNX Nifty was up by 2.30 points or 0.02% to 10,717.80.
The US markets closed ended mixed
on Tuesday after President Donald Trump, as expected, announced the US would
pull out of a multilateral nuclear deal with Iran. Trump announced the US was
abandoning the 2015 Iran nuclear deal, which was forged by former President
Barack Obama three years ago. The president also said he planned to ramp up
penalties against Tehran, including the highest level of economic sanctions.
Trump suggested that the US may still be open to negotiations with Iran but the
abandonment of the nuclear deal puts the Washington at odds with many European
allies, including France and Germany. Separately, Federal Reserve Chairman Jerome
Powell said that the role of US monetary policy in driving global financial
conditions and capital flows is often overstated. On the economy front, the
index of small-business optimism from the National Federation of Independent
Businesses ticked up fractionally to 104.8 in April. The closely-watched
confidence index roared to fresh highs after tax cuts were passed late last
year. But it's struggled to hold its momentum since then. The April increase,
of 0.1 point, missed economists' forecasts of a 0.2-point gain. Despite the
disappointing headline number, the small-business lobby highlighted a surge in
the gauge of expected profit trends, which hit the highest in the survey's
45-year history. The Dow Jones Industrial Average added 2.89 points or 0.01 percent
to 24,360.21, the Nasdaq gained 1.689 points or 0.02 percent to 7,266.90, while
the S&P 500 was down by 0.71 points or 0.03 percent to 2,671.92.
Crude oil
futures edged lower on Tuesday as President Donald Trump announced the US would
formally withdraw from Iran's nuclear deal. He said, the so-called Iran deal
was supposed to protect the United States and our allies from the lunacy of an
Iranian nuclear bomb, a weapon that will only endanger the survival of the
Iranian regime. Down trend was also supported by report that the U.S. Energy
Information Administration (EIA) has raised its 2018 and 2019 forecasts on U.S.
crude-oil production. The EIA increased its 2018 domestic crude production
forecast by 0.3% to 10.72 million barrels per day. It also lifted its 2019
output forecast by 3.6% to 11.86 million barrels a day. Benchmark crude oil
futures for June delivery jumped by $1.67 or 2.4 percent to settle at $69.06 a
barrel on the New York Mercantile Exchange. July Brent crude gained $1.32 or
1.70 percent to settle at $74.85 a barrel on London's Intercontinental
Exchange.
Halting
a two-day fall, Indian rupee ended marginally higher against dollar on Tuesday,
due to increased selling of the American currency by exporters and banks.
Traders took some support with Reserve Bank of India reportedly intervening in
the currency markets to prevent a further slide in the Indian rupee, which
breached the 67 mark to a dollar for the first time in 15 months amid a
widening trade gap and runaway import bills fuelled by high crude-oil prices.
Some support also came with a private report stating that India is the only
major world economy with a potential for talent surplus. The report further
said that India may even challenge America's position in technology, media and
telecommunications (TMT) sector. However, dollar's strength against major
global currencies overseas restricted the further up move. On the global front,
dollar was hovering just below four month highs against a currency basket on
Tuesday amid indications that the U.S. economy remains on track, while the euro
remained below the $1.19 level as concerns over economic headwinds weighed.
Finally, the rupee ended at 67.07, 6 paise stronger from its previous close of
67.13 on Monday.
The FIIs as per Tuesday's data were
net sellers in equity and debt segments both. In equity segment, the gross buying
was of Rs 3858.20 crore against gross selling of Rs 4460.60 crore, while in the
debt segment, the gross purchase was of Rs 1319.71 crore with gross sales of Rs
2393.13 crore. Besides, in the hybrid segment, the gross buying was of Rs 15.33
crore against gross selling of Rs 17.01 crore.
The US markets
ended mixed on Tuesday as investors weighed the Trump administration's decision
to withdraw from a 2015 nuclear deal with Iran and reinstate sanctions on the
country. Asian stocks were trading lower on Wednesday following President
Donald Trump's announcement that the U.S. would pull out of the Iran nuclear
deal, with most markets posting slight declines in morning trade. Indian
markets ended largely unchanged on Tuesday tracking mixed global cues. Today,
the markets are likely to make pessimistic start tracking weak global cues,
following U.S. President Donald Trump's decision to withdraw from a landmark
nuclear deal with Iran. Sentiments will remain dampen on report that India
slipped to the 6th position globally in the business optimism index for the
first quarter of this year. Business optimism is however at an all-time high
globally with the index at net 61 per cent, the highest figure recorded in 15
years of research. Traders will also weigh private report that India missed out
on a synchronized global recovery in 2017 even as the economy recovers from the
structural shocks of GST and demonetization. Meanwhile, the government will
come out with a Producers Price Index (PPI) next month for 10 services
including telecom and railways on experimental basis. The move will help track
inflation in these services, which will also include ports, postal, insurance,
banking, transportation and air travel. Traders will get some respite later in
the day as Commerce and Industry Minister Suresh Prabhu asked various
departments and ministries to submit in a fortnight their respective action
plans to boost exports. 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
|
10,717.80
|
10,685.28
|
10,754.43
|
BSE Sensex
|
35,216.32
|
35,105.26
|
35,358.12
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ICICI Bank
|
871.76
|
309.30
|
301.37
|
315.87
|
SBI
|
232.94
|
250.05
|
245.57
|
253.57
|
Indian Oil
|
121.27
|
166.55
|
163.08
|
168.43
|
Axis Bank
|
120.28
|
542.25
|
534.63
|
548.68
|
Yes Bank
|
116.71
|
343.30
|
337.88
|
351.33
|
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