Indian equity indices fell for
the second consecutive day on Friday, with Sensex and Nifty posting losses of
around 0.25% each. The markets made firm start of the day, aided by Goods and
Services Tax (GST) Council's decision to double the limit for exemption from
payment of GST to Rs 40 lakh from the earlier cap of Rs 20 lakh. It also
decided that from the next fiscal year, businesses with annual turnover of Rs
1.5 crore will be able to pay GST at a fixed rate of their earnings under the
composition scheme, while the current limit is Rs 1 crore. Domestic sentiments
were optimistic with Commerce & Industry Minister Suresh Prabhu's statement
that we are considering giving transport subsidy to states. It is under active
consideration to promote agriculture exports. On credit issues being faced by
exporters, he said the financial services secretary would hold meeting with
banks on the matter. Meanwhile, the Securities and Exchange Board of India
(SEBI) announced portfolio concentration norms for equity exchange-traded funds
(ETFs) and index funds. SEBI's new guidelines are meant to address risks
related to portfolio concentration in ETFs and index funds. According to the
new norms, the index shall have a minimum of 10 stocks as its constituents.
However, the markets soon turned lackluster and remained weak for the rest of
the session, on the back of heavy selling by the traders, despite positive cues
from global markets. Anxiety spread
among the market participants, with reports that the unemployment rate rose to
a four-year high in 2016-17, when the government demonetised old currency
notes, at the same time as more people joined the labour force looking for
jobs. According to the findings of the Labour Bureau, the unemployment rate
stood at 3.9%, compared to 3.7% in 2015-16 and 3.4% in 2013-14. Adding more
worries, the Annual Survey of Industries (ASI) showed that in 2016-17-the year
in which high-value currency was scrapped-gross value added (GVA) by the
industry grew at the slowest pace since the Narendra Modi government took over.
GVA grew by 7.2% at current prices in FY17, down from 9.3% in FY16 and 9.4% in
FY15. Finally, the BSE Sensex lost 96.66 points or 0.27% to 36,009.84, while
the CNX Nifty was down by 26.65 points or 0.25% to 10,794.95.
The US markets ended marginally
lower on Friday on account of profit taking, with traders cashing in on the
gains seen over the five-session winning streak. Concerns about the ongoing
government shutdown and skepticism about a potential trade deal between the US
and China also weighed on the markets. Selling pressure remained somewhat
subdued, however, with recent upward momentum helping to limit the downside for
the markets. On the economic front, the
Labor Department released a report showing a slight drop in consumer prices in
the month of December. The Labor Department said its consumer price index
slipped by 0.1 percent in December after coming in unchanged in November. The slight
drop in consumer prices matched street estimates. Energy prices showed another
significant decrease during the month, plunging by 3.5 percent in December
following a 2.2 percent slump in the previous month. A steep drop in gasoline
prices led the way lower, with gas prices plummeting by 7.5 percent in December
after tumbling by 4.2 percent in November. On the other hand, the report said
food prices climbed by 0.4 percent in December, the largest increase since May
of 2014. Prices for fruits and vegetables surged higher. Excluding food and
energy prices, the core consumer price index rose by 0.2 percent in December,
matching the increases seen in the two previous months as well as expectations.
Higher prices for shelter, recreation, medical care, and household furnishings
and operations more than offset lower prices for airline fares, used cars and
trucks, and motor vehicle insurance. Dow Jones Industrial Average declined 5.97
points or 0.02 percent to 23995.95, Nasdaq lost 14.59 points or 0.21 percent to
6971.48 and S&P 500 was down by 0.38 points or 0.01 percent to 2596.26.
Snapping their 9-day Winning
Streak, Crude oil futures ended lower on Friday, however scoring a second
weekly climb in a row. The recent advance for the energy complex has been
powered by optimism over US-China trade talks, as well as a December output
drop from major producers and a decline in last week's US crude inventories.
Meanwhile, over in the US, the number of domestic rigs drilling for oil fell
for a second week in a row-by 4 to stand at 873 this week, suggesting a
slowdown in crude production. Benchmark crude oil futures for February declined
$1 or 1.9 percent to settle $51.59 a barrel on the New York Mercantile
Exchange. March Brent crude dropped $1.20 or 2 percent to settle at $60.48 a
barrel on London's Intercontinental Exchange.
Indian
rupee ended marginally weaker against the American currency on Friday, due to
fresh dollar demand from banks and importers. Traders remained concerned ahead
of index of industrial production (IIP) data for November. Some anxiety also
spread among the local traders with a report that India's fiscal deficit target
has overshot by 15 per cent in the first eight months of FY 2018-19, largely
due to a revenue shortfall rather than front-loading of expenditure. Moreover,
a weak equity market put pressure on the rupee but sluggish dollar overseas
capped the losses. On the global front, euro was on track for its biggest weekly
rise in four months on Friday as the U.S. dollar weakened on signs that the
Federal Reserve could slow down the pace of interest rate hikes. Finally, the
rupee ended at 70.49, 8 paise weaker from its previous close of 70.41 on
Thursday.
The FIIs as per Friday's data
were net sellers in equity and debt segments both. In equity segment, the gross
buying was of Rs 4074.25 crore against gross selling of Rs 4381.84 crore, while
in the debt segment, the gross purchase was of Rs 1016.07 crore with gross sales
of Rs 1617.62 crore. Besides, in the hybrid segment, the gross selling was of
Rs 0.38 crore against no buying.
The US markets snapped a five-day
winning streak to settle marginally lower on Friday as concerns about the
slowing of the Chinese economy and the continued shutdown of the US government
dragged equities lower. Asian markets were trading mostly in red on Monday as
investors kept a wary eye on looming Chinese trade data on increasing signs a
slowdown in the world's second-biggest economy is dragging on global growth. Indian
markets extended their losses for second straight session to end lower on
Friday as traders were cautious ahead of the key macro-economic figures like
forex reserves and Index of Industrial Production (IIP). Today, the markets are
likely to make cautious start amid weak global cues and slow down in factory
output growth. India's industrial output hit a 17-month low of 0.5 per cent in
November as compared to 8.1 per cent in October mainly on the back of
contraction in manufacturing sector, mining, capital goods and consumer durable
goods. The previous low was in June 2017, when IIP growth contracted by 0.3 per
cent. Also, traders will be eyeing another macro data of wholesale price
inflation (WPI) and consumer price index (CPI) for December scheduled to be
released later in the day. There will be some cautiousness with a private
report that meeting the fiscal deficit target of 3.3 per cent of Gross Domestic
Product (GDP) for the current fiscal could be a challenge for the government,
given the shortfall in Goods and Services Tax (GST) collections, rising
expenditure and slowing factory output. Meanwhile, a data from the Petroleum
Planning and Analysis Cell (PPAC) of the oil ministry showed that India's fuel
demand rose 3.2 per cent in December compared with the same month last year.
Consumption of fuel, a proxy for oil demand, totalled 18.51 million tonnes.
However, some support may come later in the day with the Reserve Bank of
India's (RBI) data showing that India's foreign exchange (forex) reserves rose by
nearly $2.7 billion as on January 4, 2019. This was the highest weekly gain
since February 2018. besides, commerce and industry minister Suresh Prabhu said
the government is coming out with a new industrial policy that will link the
country with the global supply-chain that will be mutually beneficial. He added
that businesses can only grow when there are partnerships among several other
geographies. There will be some buzz in the banking sector stocks with report
that the RBI deferred the implementation of the last tranche of Capital
Conservation Buffer (CCB) by a year, a move that would leave about estimated Rs
37,000 crore capital in the hands of banks. This would help banks increase
lending by over Rs 3.5 lakh crore by leveraging ten times of the capital. Also,
there will be some reaction in power sector stocks with report that amid stress
in the power sector, woes of electricity generating firms have increased
further as their outstanding dues on state distribution companies (discoms)
rose to Rs 39,498 crore in October 2018, up 24.7 per cent from a year-ago
levels. There will be some result announcements to keep the markets in action.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,794.95
|
10,739.52
|
10,850.27
|
BSE Sensex
|
36,009.84
|
35,828.87
|
36,202.53
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
335.95
|
184.25
|
181.37
|
188.52
|
Tata Motors
|
259.03
|
180.30
|
177.22
|
185.57
|
ITC
|
167.73
|
295.35
|
292.57
|
297.07
|
Hindalco
Industries
|
133.14
|
205.85
|
203.92
|
207.87
|
SBI
|
127.03
|
302.75
|
300.40
|
305.65
|
Tata Motors' wholly owned subsidiary - JLR has reported retail sales of totalled 592,708 vehicles in 2018, down 4.6% compared to 2017's record year.
Wipro Infrastructure Engineering's aerospace business has begun shipments of part supplies to Boeing from its plant near Bengaluru international airport.
Eicher Motors' two-wheeler division -- Royal Enfield has launched Bullet 500 ABS in the Indian market priced around Rs 1.86 lakh ex-showroom, Delhi.
Infosys has reported a fall of 29.64% in its consolidated net profit at Rs 3,609 crore for Q3FY19 as compared to Rs 5,129 crore for Q3FY18.