Thursday turned-out to be a
dismal day of trade for Indian equity benchmarks, where frontline gauges
snapped their three days winning streak to end below their crucial 35,600 (Sensex) and 10,850 (Nifty) levels
after the US Federal Reserve raised borrowing costs and struck a hawkish tone
in its latest policy statement. Markets started the session on a pessimistic
note with report showing that the country's current account deficit (CAD) rose
to $13 billion (Rs 878 billion and 1.9 per cent of gross domestic product, or
GDP) in the fourth and final quarter (Q4 of 2017-18), compared to $2.6 billion
(Rs 176 billion and 0.4 per cent of GDP) in the same period of 2016 -17.
Traders also remained concerned on report that Reserve Bank of India to hike
rates once again at its August monetary policy review as headline inflation
surging to a four-month high of 4.87 per cent in May. Markets extended losses
due to higher Wholesale Price Index (WPI) data. India's wholesale inflation
shot up to a 14-month high of 4.43 percent in May on increasing prices of
petrol and diesel as well as vegetables. The WPI based inflation stood at 3.18
percent in April and 2.26 percent in May last year. Some anxiety also persist
among investors with a private report stating that the Centre and some states
strongly disagree on the inclusion of certain petroleum products -- natural gas
and aviation turbine fuel -- under the ambit of Goods and Services Tax (GST).
Sentiments also remained pessimistic with State Bank of India's (SBI) latest
report stating that India has only a decade to get into the developed country
tag. However, markets managed to prune some of their losses in last leg of
trade as market participants took some solace with report that Fitch Ratings
raised India growth forecast for 2018-19 to 7.4 per cent from 7.3 per cent, but
cited higher financing costs and rising oil prices as risks to growth. For
2019-20, it estimated the country to grow at 7.5 per cent. Traders also get
some relief with Commerce and industry minister Suresh Prabhu's statement that
India's purchases of commercial aircraft and gas from the US would help bridge
the trade deficit between the two countries even as they agreed to hold
official talks soon to address trade and economic irritants between them. Finally,
the BSE Sensex declined 139.34 points or 0.39% to 35,599.82, while the CNX
Nifty was down by 48.65 points or 0.45% to 10,808.05.
The US markets ended mostly
higher on Thursday as markets get accustomed to the idea of investing with less
of a safety net from central banks around the world. Sentiments remained
up-beat with European Central Bank detailing a timeline for its bond-buying
program, as well as its interest-rate policy. Traders digested the European
Central Bank's highly anticipated monetary policy announcement, with the ECB
revealing plans to wind down its massive bond-buying program. The ECB is
planning to trim the monthly pace of its net asset purchases to 15 billion
euros from 30 billion euros after September before completely ending the
program at the end of December. Meanwhile, the ECB left interest rates
unchanged and said it expects rates to remain at their present levels at least
through the summer of 2019. Buying was also witnessed after release of some
upbeat economic data, including a report from the Commerce Department showing a
much bigger than expected increase in retail sales in the month of May. The
Commerce Department said retail sales jumped by 0.8 percent in May after
climbing by an upwardly revised 0.4 percent in April. Economists had expected
retail sales to rise by 0.4 percent. The Nasdaq gained 65.34 points or 0.9
percent to 7,761.04 and the S&P 500 advanced 6.86 points or 0.30% to
2,782.49 while the Dow Jones Industrial Average was down by 25.89 points or
0.10 percent to 25175.31.
Extending its northward journey
for the fourth consecutive session, Crude oil futures rose on Thursday, logging
their highest settlement in two weeks, buoyed by a hefty weekly decline in U.S.
crude supplies, though the rise was modest given a climb in last week's
domestic production to a record level. The global crude benchmark, meanwhile,
gave up nearly all of the gains it saw a day earlier on the possibility that
the Organization of the Petroleum Exporting Countries (OPEC) will decide to
boost output when members and other major oil producers meet next week. Benchmark
crude oil futures for July delivery surged 25 cents or 0.4 percent to settle at
$66.89 a barrel on the New York Mercantile Exchange. August Brent crude
declined 80 cents or 1% at $75.94 a barrel on London's Intercontinental
Exchange.
Indian
rupee ended marginally higher against dollar on Thursday, as bankers and
exporters took to selling of American currency. Market participants took some
support with report that Fitch Ratings raised India growth forecast for 2018-19
to 7.4 per cent from 7.3 per cent, but cited higher financing costs and rising
oil prices as risks to growth. For 2019-20, it estimated the country to grow at
7.5 per cent. Besides, the dollar losing muscle against other currencies
overseas also supported the rupee. However, gains were limited as some concerns
remained among the investors with report showing that the country's current
account deficit (CAD) rose to $13 billion (Rs 878 billion and 1.9 per cent of
gross domestic product, or GDP) in the fourth and final quarter (Q4 of
2017-18), compared to $2.6 billion (Rs 176 billion and 0.4 per cent of GDP) in
the same period of 2016 -17. On the global front, euro firmed up against dollar
on Thursday, ahead of a policy announcement from the European Central Bank,
which may outline the bank's plans for winding down its bond-buying program.
Finally, the rupee ended at 67.63, 1 paise stronger from its previous close of
67.64 on Wednesday.
The FIIs as per Thursday'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 5039.64 crore against gross
selling of Rs 4864.95 crore, while in the debt segment, the gross purchase was
of Rs 1485.66 crore with gross sales of Rs 2819.07 crore. Besides, in the
hybrid segment, the gross buying was of Rs 0.15 crore against gross selling of Rs
2.87 crore.
The US markets ended mostly
higher on Thursday, after the European Central Bank said it would avoid raising
interest rates until mid-2019, and data showed US economic strength. Asian
markets were trading mostly in red on Friday as investors awaited developments
on the trade front ahead of the expected unveiling of US tariffs targeting
China. Snapping three-day winning streak, Indian markets ended lower on
Thursday, after the US Federal Reserve lifted interest rates for the second
time this year and signaled a more aggressive rate path for the rest of the
year. Today, the markets are likely to make cautious start, tracking mixed
global cues and a firmer dollar as the Trump administration readies tariffs on
Chinese goods. Sentiments may remain dampen on private report that the record
low equity risk premium and the gap between earnings yield and the bond yields
are making it cautious on the Indian equity market. However, traders may get some
solace later in the day with India's Oil Minister Dharmendra Pradhan conveyed
India's concerns when he met ambassadors of OPEC countries in India over high
international oil prices. Meanwhile, after implementing GST from July 1, 2017,
the government had allowed use of stickers with revised rates, alongside the
printed MRP for pre-packaged items to reflect changes in selling price for
three months till September 30. The deadline has been extended several time and
the latest was April 30. There will be buzz in stocks related to insurance
sector with report that insurance regulator IRDAI is probing suspected illegal
practices by some private sector insurers and their partner banks in
bancassurance channels. Bancassurance refers to selling of insurance policies
through banks, wherein these lenders earn revenue through such sales.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,808.05
|
10,776.50
|
10,836.65
|
BSE Sensex
|
35,599.82
|
35,475.62
|
35,736.95
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
SBI
|
185.14
|
282.6
|
280.42
|
285.67
|
Sun Pharma
|
121.54
|
559.25
|
546.83
|
566.83
|
ICICI Bank
|
114.01
|
284.75
|
282.28
|
289.03
|
ITC
|
91.70
|
267.25
|
265.87
|
268.77
|
Vedanta
|
89.30
|
240.05
|
238.27
|
242.67
|
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