Indian equity benchmarks closed
the Monday's trading session on higher note. After a positive start of the day,
key indices remained in green for the most part of the session, aided by
Finance Minister Nirmala Sitharaman's statement that the government has
succeeded in keeping complete control over retail inflation. The government has
achieved success in not allowing inflation to raise its dirty head to cause
inconvenience to the consumers. Some comfort also came with the Reserve Bank's
report that the forex kitty continued to surge for the fourth successive week
to scale a new lifetime high of $429.911 billion, after a heavy increase in the
value of gold and currency assets during the week to July 5. However,
volatility witnessed in the markets during the day, as India's industrial
production measured by Index of Industrial Production (IIP), which gauges
production in the industrial sector for a given period of time, slipped to 3.1%
in May 2019, as compared to 3.8% growth in May 2018. But, reports of easing WPI
inflation helped the indices to end in green terrain. India's Wholesale price
index (WPI) inflation eased further for the third straight month in the month
of June, driven down by decline in prices of fuel. According to the latest data
released by the government, WPI slowed down to 2.02% in June from 2.45% in May
and 5.68% during the corresponding month of the previous year. Finally, the BSE
Sensex gained 160.48 points or 0.41% to 38,896.71, while the CNX Nifty was up
by 35.85 points or 0.31% to 11,588.35.
The US market ended marginally
higher on Monday on the back of positive earnings report from Citigroup, with the
financial giant reporting second quarter results that beat street estimates on
both the top and bottom lines. However, buying interest waned shortly after the
start of trading as traders seemed reluctant to make more significant moves
ahead of the release of quarterly results from a slew of other big-name
companies. Besides, investors also monitored a weak gross domestic product
reading in China, with growth falling to its slowest pace since 1992. On the
economic front, after reporting an unexpected contraction in regional
manufacturing activity in the previous month, the Federal Reserve Bank of New
York released a report showing activity rebounded modestly in the month of
July. The New York Fed said its general business conditions index climbed to
4.3 in July from a negative 8.6 in June, with a positive reading indicating
growth in regional manufacturing activity. Street had expected the index to
rise to a positive 2.0. The bigger than expected rebound by the general
business conditions index came after it recorded its first negative reading in
over two years in the previous month. The rebound by the headline index came as
the new orders index jumped to a negative 1.5 in July from a negative 12.0 in
June, indicating new orders continued to contract but at a much slower rate.
The report also said the shipments index dipped to 7.2 in July from 9.7 in
June, although a positive reading still indicates growth. Dow Jones Industrial
Average gained 27.13 points or 0.10 percent to 27359.16, Nasdaq added 14.04 points
or 0.17 percent to 8258.18 and S&P 500 was up by 0.53 points or 0.02
percent to 3014.30.
Crude oil futures ended lower on
Monday as production in the Gulf of Mexico began a post-storm recovery. Oil and
natural-gas output in the Gulf was picking up, with about 69% of Gulf oil
production and nearly 61% of natural-gas production shut in. That marked an
improvement from Sunday, when almost 73% of oil and 62% of natural-gas output
was down. Besides, Energy Information Administration (EIA) said that US
shale-oil production is likely to edge higher next month, by 49,000 barrels a
day to 8.546 million barrels a day. Benchmark crude oil futures for August
dropped 63 cents or 1.1 percent to settle at $59.58 a barrel on the New York
Mercantile Exchange. September Brent fell 24 cents or 0.4 percent to settle at
$66.48 a barrel on London's Intercontinental Exchange.
Indian rupee ended stronger against dollar on Monday, due
to increased selling of the American currency by exporters and banks. Local
investors cheered with data showing that Wholesale price-based inflation
declined for the second consecutive month to its 23-month low of 2.02 percent
in June, helped by decline in prices of vegetables as well as fuel and power
items, The Wholesale Price Index (WPI)-based inflation was at 2.45 percent in
May. It was 5.68 per cent in June 2018. However, weak macro-economic data
weighed on the domestic currency and restricted the upmove. At 3.18 per cent,
the inflation rate in India has touched 8-month high in June 2019. On the other
hand, Index of Industrial Production (IIP) growth rate fell to 3.1% in May. On
the global front, U.S. dollar fell against its most major counterparts on
Monday, pressured by continued expectations that the Federal Reserve would
begin cutting rates later this month, after dovish remarks from Federal Reserve
Chairman Jerome Powell last week. Finally, the rupee ended at 68.54, 15 paise
stronger from its previous close of 68.69 on Friday.
The FIIs as per Monday's data
were net sellers in equity segment, while they were net buyers in debt segment.
In equity segment, the gross buying was of Rs 4862.21 crore against gross
selling of Rs 5584.73 crore, while in the debt segment, the gross purchase was
of Rs 1564.30 crore with gross sales of Rs 911.76 crore. Besides, in the hybrid
segment, the gross buying was of Rs 18.23 crore against gross selling of Rs
33.69 crore.
The US markets ended marginally
higher on Monday as investors digested second-quarter results from Citigroup,
which reported a squeeze in interest margins, and awaited a wave of
second-quarter earnings. Asian markets are trading mixed in early deals on
Tuesday as investors looked to earnings and clues from policy makers for the
next catalyst. Indian markets ended higher on Monday led by rally in IT stocks
including Infosys, Tech Mahindra and TCS coupled with easing wholesale inflation.
Today, the start of session is likely to be cautious amid mixed cues from Asian
peers. There will be some cautiousness with report that India's exports
declined by 9.71 per cent to $25.01 billion in June 2019 compared to $27.7
billion in the same month last year due to a fall in shipments of gems and
jewellery, engineering goods and petroleum products. Imports too declined by 9
per cent to $40.29 billion in June 2019 against $44.3 billion in June 2018
mainly due to falling prices of petroleum products. The trade deficit also
lowered to $15.28 billion in June from $16.6 billion in June 2018. Traders will
be concerned about the IHS Markit India Business Outlook indicating that
business sentiment in India fell to its lowest level since June 2016, as
companies were worried over a slowing economy, government policies and water
shortage. It added that predictions of softer activity growth underpin the
downward revisions of profit outlook, subdued hiring plans and relatively muted
capital expenditure. However, some support may come later in the day with
Finance Minister Nirmala Sitharaman's statement that GST collection of states
and union territories (UTs) increased to Rs 5.18 lakh crore in the full
financial year 2018-19, up from Rs 2.91 lakh crore collected in nine months of
2017-18. Traders may took note of Commerce and Industry Minister Piyush Goyal's
statement that India is open to ideas from all sides to strengthen investors'
confidence so that they can invest and participate in the country's
development. Meanwhile, the government has ordered SFIO probe in six cases,
including that of Jet Airways and its six entities, in the first three months
of the current financial year. The Serious Fraud Investigation Office (SFIO),
which probes white-collar crimes, comes under the corporate affairs ministry.
There will be some reaction in power stocks with Fitch Ratings' statement that
a reduction of direct controlling stakes by the government of India in large
state-owned energy companies is unlikely to negatively impact the ratings on
these entities, as long as the government maintains majority effective
ownership and broad control of their activities. There will be some earnings
announcements too to keep the markets buzzing.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE
Nifty
|
11,588.35
|
11,540.97
|
11,627.07
|
BSE
Sensex
|
38,896.71
|
38,720.88
|
39,048.25
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,267.37
|
93.20
|
90.73
|
97.48
|
Infosys
|
310.64
|
779.35
|
761.82
|
789.27
|
Tata Motors
|
199.25
|
160.95
|
158.33
|
163.08
|
Sun Pharmaceutical
|
182.70
|
422.95
|
415.17
|
429.22
|
SBIN
|
156.66
|
360.05
|
356.77
|
364.17
|
Sun Pharma has launched Ezallor Sprinkle capsules in US.
Tata Steel has reported consolidated steel production of 7.61 MT in Q1FY20, registering 9.18% growth.
Infosys will make an additional investment of $6 million in data preparation software company Trifacta Inc.
Yes Bank has successfully completed the issuance of corporate debt using blockchain built by fintech MonetaGo on R3's Corda Enterprise technology.