Last hour sell-off dragged Indian
equity indices lower on Tuesday, with Sensex and Nifty closing below their
crucial psychological levels of 35,500 and 10,650, respectively. After a
positive start, the markets gained traction to trade firm for the most part of
the session, as the Reserve Bank of India (RBI) said it would inject Rs 12,500
crore into the system through purchase of government securities on February 21
to increase liquidity. The purchase will be made through open market operations
(OMOs). Trading sentiments got boost, with Union Minister of Commerce &
Industry and Civil Aviation, Suresh Prabhu's statement that exports have been
growing for the last three years. He said the Ministry of Commerce and industry
has made a plan to improve the ease of doing business at district level. He also added that if GDP of districts grow
by 3% it will lead to overall growth of national GDP. Adding enthusiasm among
traders, the President of India, Ram Nath Kovind said that in trade and
technology, agriculture and Antarctic science, cyberspace and satellites,
India's transformative growth and Argentine capabilities are creating new
bilateral opportunities. However, in the last leg of the trade, the key indices
erased all of their gains to settle in negative terrain, tracking weak European
markets. The markets participants got cautious, with the S&P Global
Ratings' latest report stating that Indian corporates are likely to see
slowdown in revenue growth over the next 12-24 months. In a report, S&P
said that India's central government elections this year may pose additional
risks for Indian corporates. A change of administration may trigger
expansionary government spending that pushes up borrowing costs or raises
inflation. The street were seen taking a note of the rating agency ICRA's
latest report that there is need to strengthen the corporate insolvency
resolution process to ensure that the resolution plans approved by the National
Company Law Tribunal (NCLT) are firmly implemented so that the sanctity of the
process is maintained. Finally, the BSE Sensex fell 145.83 points or 0.41% to
35,352.61, while the CNX Nifty was down by 36.60 points or 0.34% to 10,604.35.
The US markets ended marginally
higher on Tuesday as another round of US-China trade talks began in Washington.
President Donald Trump said the US-China trade talks are going very well and
once again hinted that an early March deadline to reach a deal could be
postponed. Trump said I cannot tell you exactly about timing, but the date is
not a magical date. He claimed China is trying to move fast so that an increase
in tariffs on Chinese goods currently set to take effect does not happen.
Further, some support also came in after upbeat earnings sent shares of retail
giant Walmart higher. However, stocks fluctuated over the course of the trading
session on Tuesday as traders returned to their desks following the long
holiday weekend. On the economic front, reflecting growing consumer confidence
and falling interest rates, the National Association of Home Builders (NAHB)
released a report showing a significant increase in US homebuilder confidence
in the month of February. The report said the NAHB/Wells Fargo Housing Market
Index climbed to 62 in February after rising to 58 in January. Street had
expected the index to inch up to 59. With the increase, the index continued to
recover after hitting a more than three-year low of 56 in December. NAHB
Chairman Randy Noel said ongoing reduction in mortgage rates in recent weeks
coupled with continued strength in the job market are helping to fuel builder
sentiment. He added in the aftermath of the fall slowdown, many builders are
reporting positive expectations for the spring selling season. Dow Jones
Industrial Average gained 8.07 points or 0.03 percent to 25891.32, Nasdaq added
14.36 points or 0.19 percent to 7486.77 and S&P 500 was up by 4.16 points
or 0.15 percent to 2779.76.
Crude
oil futures ended higher on Tuesday amid reports of falling Saudi Arabian
exports. Crude-oil volumes shipped from major producer Saudi Arabia fell in the
first half of February to 6.2 million barrels a day, down 1.3 million barrels a
day on the previous month. Traders also eyed talks between the US and China for
signs of progress on trade that could ease worries about energy demand and
boost crude prices. However, international benchmark Brent crude ended slightly
lower after posting gains in each of the last five sessions. Benchmark crude
oil futures for March gained 50 cents or 0.9 percent to settle $56.09 a barrel
on the New York Mercantile Exchange. April Brent crude declined a nickel or
less than 0.1 percent to settle at $66.45 a barrel on London's Intercontinental
Exchange.
Indian
Money market remained closed on Tuesday on account of Chhatrapati Shivaji
Maharaj Jayanti.
The
FIIs as per Monday's data were net sellers in equity and debt segments both. In
equity segment, the gross buying was of Rs 3406.01 crore against gross selling
of Rs 6075.84 crore, while in the debt segment, the gross purchase was of Rs
582.51 crore with gross sales of Rs 1242.92 crore. Besides, in the hybrid
segment, the gross buying was of Rs 1.22 crore against gross selling of Rs 0.09
crore.
The US markets ended in green on
Tuesday on strong Walmart earnings and continued optimism over US-China trade
talks. Asian markets are trading mostly higher on Wednesday after Donald Trump
said US-China trade talks are going well. Indian markets extended their
southward journey for eighth straight session on Tuesday, mainly on the back of
late hour sell-off. Today, the markets are likely to make optimistic start of
the day following positive global cues. Investors will be eyeing on the 33rd Goods
and Services Tax (GST) Council meeting, due later in the day. Traders will be
getting encouragement with report that the Union Cabinet approved promulgating
an ordinance for companies law amendments to plug gaps in corporate governance
and enforcement framework as well as improve the ease of doing business. There
will be some support with Care Ratings' report that signalling an end to the
liquidity crisis that NBFCs have been facing since last September, corporate
bond issuances by them have risen by 30% in January, reflecting renewed
confidence among both issuers as well as investors. Traders will also be
reacting to a report that the Cabinet approved a new electronics policy which
aims to create a $400 billion electronic manufacturing ecosystem by 2025 and
generate 1 crore jobs in the country. Traders may take note of the government's
statement that the revised Gross Domestic Product (GDP) figures for the
demonetisation year was not cooked up and, in fact, the growth rates are likely
to go up further due to the GST. On January 31, the government revised the GDP
growth rates by 110 basis points (bps) from 7.1% to 8.2% for 2016-17, the year
of demonetisation, and by 50 bps from 6.7% to 7.2% for fiscal 2017-18. There
will be some buzz in the oil & gas sector stocks after the government
approved new rules for bidding out oil and gas blocks as it reverted back to a
two-decade-old system of awarding areas based on exploration work commitment,
granted marketing and pricing freedom to yet to be developed discoveries and
allowed ONGC to induct private firms in existing fields. There will be some
reaction in sugar sector stocks with Crisil report stating that the hike in the
minimum support price for sugar to Rs 31 a kg is likely to lead to a 300-400
basis points increase in operating margins of mills in the current sugar
season.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous
close
|
Support
|
Resistance
|
NSE
Nifty
|
10,604.35
|
10,552.38
|
10,689.58
|
BSE
Sensex
|
35,352.61
|
35,167.83
|
35,656.71
|
Nifty Top volumes
Stock
|
Volume
|
Previous
close (Rs)
|
Support (Rs)
|
Resistance
(Rs)
|
(in
Lacs)
|
ITC
|
344.51
|
275.90
|
273.53
|
278.73
|
Yes
Bank
|
339.90
|
212.85
|
210.23
|
216.78
|
SBI
|
190.64
|
262.90
|
259.63
|
266.83
|
Tata
Motors
|
145.33
|
163.75
|
161.55
|
165.95
|
ICICI
Bank
|
143.85
|
343.25
|
338.10
|
349.40
|
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