Key Indian equity benchmarks gave
up their gains on Wednesday to end the trading session in negative territory.
The start of the day was jubilant, taking support with the Reserve Bank of India
(RBI) stating that it would infuse Rs 12,500 crore into the system through open
market operations. The decision on OMO is based on an assessment of prevailing
liquidity conditions and also of the durable liquidity needs going forward.
Traders took encouragement with a report that consumer market is expected to
grow at 12 percent annually over the next decade and touch Rs 335 lakh crore.
The consumer market was around Rs 110 lakh crore in 2018, clipping past 13
percent annually in the past decade when it stood at Rs 31 lakh crore in 2008.
Some comfort also came with Corporate Affairs Secretary Injeti Srinivas'
statement that the government would soon take effective steps to discourage
people from making frivolous bids under the Insolvency and Bankruptcy Code
(IBC). He noted that the IBC mainly seeks to address the issue of stressed
assets in a time-bound manner. However, the indices turned negative in
afternoon deals to close lower, affected by the Controller General of Accounts'
(CGA) latest data showing that the central government's fiscal deficit has
widened and touched 121.5% of the full-year revised target of Rs 6.34 lakh
crore at the end of January. The fiscal deficit, or the gap between the
government's expenditure and revenue, stood at Rs 7.70 lakh crore during
April-January of the current financial year ending March. Sentiments also got
worsened after the government detected Rs 20,000 crore worth GST evasion so far
this fiscal and will take more steps to check frauds and increase compliance.
Adding worries among the traders, the Vice President of India, M. Venkaiah
Naidu expressed concern over the recent incidents of indiscretion,
mismanagement and greed that ruined many business organisations and individual
reputation as he stressed up on the need to incorporate business ethics and
values as an important and integral element of management education. Finally,
the BSE Sensex lost 68.28 points or 0.19% to 35,905.43, while the CNX Nifty was
down by 28.65 points or 0.26% to 10,806.65.
The US markets bounced off
intraday lows but still ended mostly lower on Wednesday as comments from US
Trade Representative Robert Lighthizer partly offset recent optimism about the
US-China trade talks. Lighthizer, who is described as hawkish on trade, told
members of the House Ways and Means Committee that China needs to go beyond
pledging to buy more US goods to reach to a long-term trade agreement.
Lighthizer said we can compete with anyone in the world, but we must have rule,
enforced rules, that make sure market outcomes and not state capitalism and
technology theft determine winners. The reaction to Lighthizer's remarks
reflected the lingering uncertainty about a potential US-China trade deal even
after President Donald Trump decided to postpone an increase in tariffs on
Chinese imports. On the economic front, a government shutdown-delayed report
released by the Commerce Department showed new orders for US manufactured goods
rose by much less than anticipated in the month of December. The Commerce
Department said factory orders inched up by 0.1% in December after falling by a
revised 0.5% in November. Street had expected orders to climb by 0.5% compared
to the 0.6% decrease originally reported for the previous month. The uptick in
factory orders came as a jump in orders for durable goods was largely offset by
a steep drop in orders for non-durable goods. The report said durable goods
orders surged up by 1.2% in December, largely reflecting a 3.2% spike in orders
for transportation equipment. Dow Jones Industrial Average declined 72.82
points or 0.28 percent to 25985.16 and S&P 500 was down by 1.52 points or
0.05 percent to 2792.38, while Nasdaq gained 5.21 points or 0.07 percent to
7554.51.
Crude oil futures ended higher on
Wednesday after data from the Energy Information Administration (EIA) revealed
that US crude supplies unexpectedly dropped by 8.6 million barrels. The decline
followed five straight weeks of increases and defied most market forecasts. EIA
also reported that supplies of gasoline fell by 1.9 million barrels, while
distillates edged down by 300,000 barrels last week. Besides, oil prices also
got some support after Saudi Arabia affirmed its commitment to reducing output.
Benchmark crude oil futures for April rose $1.44 or 2.6 percent to settle at
$56.94 a barrel on the New York Mercantile Exchange. April Brent crude surged
$1.18 or 1.8 percent to settle at $66.39 a barrel on London's Intercontinental
Exchange.
Extending
weakness for the second day, Indian rupee depreciated against dollar on
Wednesday, on increased demand for the US currency from importers. Traders
remain concerned with the government data showing that fiscal deficit touched
121.5 percent of the full-year revised target of Rs 6.34 lakh crore at the end
of January on account of lower revenue collections. The fiscal deficit stood at
Rs 7.70 lakh crore during April-January of the current financial year ending
March. At the end of January 2018, the deficit was 113.7 percent of the Revised
Estimate (RE). Rising global crude oil prices also impacted the rupee movement.
On the global front, US dollar was mixed against the other major currencies on
Wednesday as the yen gained ground on the back of geopolitical tensions and the
British pound pushed higher with investors expecting Brexit to be delayed.
Finally, the rupee ended at 71.24, 17 paise weaker from its previous close of
71.07 on Tuesday.
The FIIs as per Wednesday'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 6711.93 crore against gross
selling of Rs 5049.43 crore, while in the debt segment, the gross purchase was
of Rs 972.65 crore with gross sales of Rs 2662.59 crore. Besides, in the hybrid
segment, the gross selling was of Rs 1.97 crore against no buying.
The US markets ended mostly lower
on Wednesday as investors focused on separate congressional testimonies from US
Trade Representative Robert Lighthizer on US-China trade negotiations and a
second day of Congressional hearings featuring Federal Reserve Chair Jay
Powell. Asian markets are trading mostly in red on Thursday amid a spate of
geopolitical concerns ranging from escalating tensions between India and
Pakistan to US-China trade uncertainty. Indian markets ended lower for second
straight session on Wednesday as tensions between India and Pakistan escalated.
Today, the start of the F&O series expiry session is likely to be cautious
tailing the weakness in other global markets. The conflict between India and
Pakistan may also weigh on investor sentiments. Traders will be eyeing the data
print for the December quarter GDP and core sector data that will be announced
later in the day. Traders will be concerned about a private report stating that
India's economy appeared to be losing momentum in the approach to a general
election that must be held by May. The report forecast that growth slipped to
6.9% annually in the October-December quarter. Also, there will be some
cautiousness with Fitch Ratings' statement that government's $7 billion (around
Rs 48,000 crore) fund infusion into public sector banks (PSBs) would not be
sufficient to support significantly stronger lending growth. Fitch estimated
that banks would need an additional $23 billion (around Rs 1.6 trillion) in
2019, after these latest injections, to sufficiently meet minimum capital
standards. However, some respite can come later in the day with a private
report indicating that private equity (PE) investments in India witnessed a 36
per cent growth to $1,325 million despite fall in volume on account of
increased follow-on investments last month as compared to a year ago. There
will be some buzz in the steel sector stocks with rating agency Crisil's
statement that domestic iron ore prices are likely to rise by 3-4% in 2019 on
account of global supply glitch. Further, domestic steel prices are likely to
soften following global cues. There will be some reaction in cement sector
stocks with India Ratings report stating that domestic cement demand is
expected to register a modest growth of 6-8% in fiscal 2020 mainly driven by
the diminishing base effect, increased thrust on infrastructure by the Central
government and the affordable housing segment.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,806.65
|
10,725.33
|
10,913.83
|
BSE Sensex
|
35,905.43
|
35,636.80
|
36,272.58
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
746.50
|
228.20
|
222.30
|
235.45
|
State Bank of India
|
205.72
|
267.65
|
265.23
|
271.38
|
Tata Motors
|
197.24
|
177.35
|
173.60
|
183.60
|
ICICI Bank
|
173.25
|
345.55
|
341.00
|
352.40
|
NTPC
|
152.16
|
138.75
|
136.95
|
141.75
|
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