Key equity
indices ended the lackluster session of trade with marginal losses on Friday,
as traders remained cautious ahead of US Federal Reserve Chairman Jerome
Powell's big Jackson Hole speech that could bring a dovish surprise. Markets
started the session on positive note but soon turned pessimistic as traders
turned concern about a report that the government has imposed standard
conditions for as many as 25 sectors like steel, coal and oil, seeking
environment clearance (EC) for expansion of existing projects or new projects.
Some cautiousness also crept in with a private report that the Goods and
Services Tax (GST) collections may come in as a surprise for the government as
collections for the month of July are likely to be lower on both year-on year
basis and a month-on-month basis. As per the report, collections may range
between Rs 89,000 crore and Rs 91,000 crore for July which are to be reported
in August. Traders took note of Niti Aayog vice chairman Rajiv Kumar's
statement that India needs three-four large lenders to figure among top 200
global-sized banks. He also noted that India's banking sector is highly
conservative. He made a strong case for giving banking sector more freedom to
take risks and provide credit to industry especially the Micro, Small &
Medium Enterprises (MSME) sector. However, losses remained capped as traders
took some solace after Moody's Investors Service in its Global Macro Outlook for
2018-19 forecasted that India's gross domestic product (GDP) growth is likely
to be around at 7.5% in 2018 and 2019 as it is largely resilient to external
pressures like those from higher oil prices. Some support also came with report
that India will explore opportunities to increase exports of petroleum
products, cars and motorcycles, and mobile phones to Kenya during the joint
trade committee meeting of the two countries. Traders also take note of the
Commerce Ministry's statement that a National Logistics Portal is being
developed to ensure ease of trading in the international and domestic markets,
as India eyes lowering logistics cost from 14% of GDP to less than 10% by 2022.
Finally, the BSE Sensex declined 84.96 points or 0.22% to 38,251.80, while the
CNX Nifty was down by 25.65 points or 0.22% to 11,557.10.
The US markets closed higher with
gains of over half a percent on Friday after Federal Reserve Chairman Jerome
Powell affirmed the central bank's strategy of gradually normalizing monetary
policy, highlighting the strength in the economy and robust corporate results
that have helped to support investment appetite for equities. Powell said he
sees two risks surrounding rate hikes, which he outlined as moving too fast and
needlessly shortening the expansion, versus moving too slowly and risking a
destabilizing overheating. Besides, the strong results from retailers led the
major indexes to slight weekly gains as investors also shook off renewed legal
worries surrounding Trump. On the economic front, the Commerce Department
released a report showing a much bigger than expected decrease in durable goods
orders in the month of July. The Commerce Department said durable goods orders
tumbled by 1.7% in July after climbing by 0.7% in June. Street had expected
durable goods orders to drop by 0.5%. Excluding a significant decrease in
orders for transportation equipment, durable goods orders rose by 0.2% in July
after inching up by 0.1% in June. Ex-transportation orders had been expected to
rise by 0.5%. Dow Jones Industrial Average rose 133.37 points or 0.52 percent
to 25790.35, the S&P 500 gained 17.71 points or 0.62 percent to 2874.69 and
Nasdaq was up by 67.52 points or 0.86 percent to 7945.98.
Crude oil
futures ended higher on Friday as investors focused on tightening inventories,
including signs of shrinking output from Iran. The US sanctions on Iran, which
do not come into full force until November 4, are already translating into
diminished production from the Islamic Republic weighed on prices. Iran numbers
exports have already been reduced a bit. Initial estimates suggest that Iran
oil crude and condensate exports have plummeted to 1.68 million barrels a day
in the first 16 days of August, down over 600,000 barrels a day from loadings
in July. Benchmark crude oil futures for October rose 89 cents or 1.3 percent
to settle at $68.72 a barrel on the New York Mercantile Exchange. October Brent
crude gained $1.09 or 1.5 percent at $75.82 a barrel on London's
Intercontinental Exchange.
Snapping its previous session's
losses, Indian rupee recovered against dollar on Friday, following heavy dollar
selling from banks and exporters. Investors' sentiments turned positive with
Moody's Investors Service in its Global Macro Outlook for 2018-19 forecasting
that India's gross domestic product (GDP) growth is likely to be around at 7.5%
in 2018 and 2019 as it is largely resilient to external pressures like those
from higher oil prices. Besides, the dollar losing muscle against other
currencies overseas too supported the rupee. On the global front, dollar fell
on Friday ahead of a speech by the Federal Reserve's chairman which investors
hope will provide an indication of the central bank's plans for monetary
tightening and reaction to recent criticism by US President Donald Trump.
Finally, the rupee ended at 69.91, 20 paise stronger from its previous close of
70.11 on Thursday.
The FIIs as per Friday's data
were net buyers in equity and debt segments both. In equity segment, the gross
buying was of Rs 6422.81 crore against gross selling of Rs 6007.67 crore, while
in the debt segment, the gross purchase was of Rs 981.15 crore with gross sales
of Rs 291.49 crore. Besides, in the hybrid segment, the gross buying was of Rs
0.19 crore against gross selling of Rs 0.89 crore.
The US markets rose on Friday,
supported by remarks by Federal Reserve Chairman Jerome Powell, who said that a
gradual process of interest rate increases remains appropriate as the US
economy heats up and the labor market tightens. Asian markets were trading in
green in early deals on Monday, taking support from Wall Street's gains on
Friday. The Indian markets snapped four-session winning streak on Friday to end
the day with marginal losses, amid escalating trade tensions between the US and
China as talks between the two countries ended without any significant outcome.
Today, the start of the F&O expiry week is likely to be a bit positive
following firm global cues. Traders may take note of a report that former Niti
Aayog vice-chairman Arvind Panagariya opined that rupee depreciation was long
overdue, saying appreciated currency had hurt the country's exports. He further
said India's macroeconomic management is sound and there was no reason to
worry. Besides, the government is looking to complete nearly three-fourths of
its disinvestment target by the end of December and has a pipeline of about 15
companies in which it will sell stakes to achieve this interim goal. Meanwhile,
the second phase of the Faster Adoption and Manufacturing of (Hybrid &)
Electric Vehicles (FAME) India scheme will be kicked off on September 7, 2018,
by Prime Minister Narendra Modi. Under Phase II of the initiative, the
government has earmarked a budget of Rs 5500 crore to be used over the next
five years and will be used to provide subsidies to all types of electric
vehicles. However, there may be some cautiousness with the Reserve Bank of
India's (RBI) data showing that India's foreign exchange (Forex) reserves
slipped by $33.2 million during the week ended August 17. Also, traders will be
concerned about a private report that high borrowing costs and weakness in
rupee is expected to impact corporates, while uncertainties in the global
market has the potential to derail the global growth story. There will be some
buzz in the real estate related stocks with ICRA's report that the adoption of
new accounting standard IndAS has dented the net-worth of nine major listed
real estate firms by 18% and revenues by 23.6% sequentially in June quarter.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,557.10
|
11,524.53
|
11,597.13
|
BSE Sensex
|
38,251.80
|
38,139.88
|
38,396.61
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
SBI
|
188.70
|
300.45
|
297.73
|
304.43
|
ICICI Bank
|
178.06
|
330.15
|
326.47
|
334.67
|
Yes Bank
|
163.01
|
374.20
|
368.47
|
384.32
|
Axis Bank
|
150.36
|
639.90
|
634.80
|
644.20
|
Vedanta
|
120.33
|
224.05
|
215.87
|
228.62
|
Coal India's sales to power sector increased by 13% on-year to 186.92 million tonne (MT) between April 1 and August 22, 2018.
Vedanta is planning to expand its alumina refinery at Lanjigarh in Odisha to 6 million tonnes per annum by 2021.
ICICI Bank has agreed to a multi-year partnership with Manchester United, bringing a range of competitive co-branded credit and debit card to the club's 35 million Indian followers.
Lupin has received the EIR from USFDA for the successful inspection of its Nagpur facility.