Indian equity
markets truly depicted the choppiness of F&O expiry session on Thursday
with key gauges ending the session with marginal cut. After making a cautious
start, markets traded in a very tight band tad below their neutral lines
throughout the session, as traders remain concerned with a report that foreign
investors have pulled out $280 million from the Indian markets so far this
year, while domestic institutional investors (DIIs) continue to invest more
aggressively and have put in a staggering $10 billion. The sentiments weighed
down with Credit rating agency Moody's Investors Service report highlighting
that there are risks of India breaching the 3.3% fiscal deficit target for the
current financial year as higher oil prices will add to short-term fiscal
pressures. Adding to the pessimism, the Reserve Bank of India (RBI) reiterated
concerns over rising inflationary pressures this fiscal year due to global and
domestic pressures and called for continuous vigil to keep them at bay.
Sentiments remained subdued as rupee crashed to a new record low of 70.82
against the dollar and crude oil extends gains due to fall in US crude
inventories and expected supply disruptions from Iran and Venezuela. However,
losses remained capped as traders took some solace with RBI's latest annual
report showing that it expects India's economic growth rate to accelerate to
7.4% in the current financial year (FY19) on pick up in industrial activity and
good monsoon. Some comfort came with the government's statement that demonetisation
of high-value currency notes in November 2016 achieved the objectives quite
substantially even as the RBI reported
most of the demonetised currency was back with the banks. Traders took note with
Finance Minister Arun Jaitley's statement that India is expected to surpass
Britain next year to become world's fifth largest economy. Meanwhile, Union
minister for road transport and highways, Nitin Gadkari said that India needs
foreign investment, especially in infrastructural development, to arrest free
fall of Indian rupee that has hurt the economy. Finally, the BSE Sensex slipped
32.83 points or 0.08% to 38,690.10, while the CNX Nifty was down by 15.10
points or 0.13% to 11,676.80.
Snapping their four-day winning
streak, the US markets ended lower on Thursday with the Dow falling back below
26,000 mark, on a report that President Donald Trump intends to move ahead with
plans to impose tariffs on $200 billion in Chinese imports as early as next
week. Trump intends to impose the tariffs after a public comment period ends
next Thursday, September 6. Trade-related news has played a central role in the
market recently amid worries that heightened tensions between US and its major
trading partners could not only hamper US economic growth but derail the global
economy at large. Further, uncertainty about trade talks between the US and
Canada also weighed on the markets ahead of a Friday deadline to reach a deal.
On the economic front, the Labor Department released a report showing a modest
uptick in initial jobless claims in the week ended August 25. The report said
initial jobless claims crept up to 213,000, an increase of 3,000 from the
previous week's unrevised level of 210,000. Meanwhile, a separate report
released by the Commerce Department showed personal income and spending both
increased in line with economist estimates in the month of July. The Commerce
Department said personal income rose by 0.3% in July after climbing by 0.4% in
June. The increase in income matched expectations. The report also said
personal spending climbed by 0.4% in July, matching the increase in the
previous month as well as street estimates. Dow Jones Industrial Average dropped
137.65 points or 0.53 percent to 25986.92, the S&P 500 declined 12.91
points or 0.44 percent to 2901.13 and Nasdaq was down by 21.32 points or 0.26
percent to 8088.36.
Extending their
previous session gains, Crude oil futures ended higher and marked their highest
levels in August on Thursday, buoyed by two consecutive weekly declines in US
crude supplies and ongoing concerns over tighter global inventories tied to US
sanctions on Iran. Besides, potential disruptions to global crude supplies,
including US sanctions on Iran that take effect in early November, have been at
the center of the recent rally in WTI and Brent oil. Benchmark crude oil
futures for October rose 74 cents or 1.1 percent to settle at $70.25 a barrel
on the New York Mercantile Exchange. October Brent crude gained 63 cents or 0.8
percent at $77.77 a barrel on London's Intercontinental Exchange.
Continuing
its record closing low for second straight day, Indian rupee ended weaker
against the Greenback on Thursday, following fresh demand for the US currency
from banks and importers to meet the month end dollar demand. Sentiments
weakened with Credit rating agency Moody's Investors Service report
highlighting that there are risks of India breaching the 3.3% fiscal deficit
target for the current financial year as higher oil prices will add to
short-term fiscal pressures. Adding to the pessimism, the Reserve Bank of India
(RBI) reiterated concerns over rising inflationary pressures this fiscal year
due to global and domestic pressures and called for continuous vigil to keep
them at bay. On the global front, the dollar fell for a fifth consecutive day
on Thursday as easing concerns over trade conflicts fuelled appetite for
riskier currencies though thin month-end markets checked losses. Finally, the
rupee ended at 70.73, 16 paise weaker from its previous close of 70.57 on
Wednesday.
The FIIs as per Thursday'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 3617.03 crore against gross
selling of Rs 5020.60 crore, while in the debt segment, the gross purchase was
of Rs 1080.28 crore with gross sales of Rs 806.07 crore. Besides, in the hybrid
segment, the gross buying was of Rs 0.04 crore against gross selling of Rs 1.78
crore.
The US markets declined on
Thursday on new concerns that the US-Chinese trade dispute will intensify.
Asian markets were trading in red on Friday as President Donald Trump's plans
to impose new tariffs on China and renewed turmoil in emerging markets weighed
on investor sentiment. The Indian markets fell for the second consecutive
session on Thursday as investors fretted over plunging rupee and rising crude
oil prices, while August futures and options (F&O) expiry further added to
market volatility. Today, the start of the new F&O series is likely to be
flat-to-negative amid weak global cues. Investors will be eyeing the first
quarter Gross Domestic Product (GDP) numbers to be announced later in the day.
There will be some cautiousness with Federation of Indian Export Organisations
(FIEO) President Ganesh Kumar Gupta's statement that exporters are facing
uncertainty due to a continuous depreciation of the domestic currency as they
are not able to negotiate properly prices of goods in the global markets.
However, traders may get some encouragement later in the trade with Finance
Minister Arun Jaitley's statement that India is likely to surpass the UK to
become the world's fifth largest economy next year on growing consumption and
strong economic activity. Also, there will be some support with a private
report that the economic growth is expected to rise to 7.6% in the April-June
quarter of 2018-19 from a sub-6% figure in the year-ago period mainly due to a
low-base effect. There will be some buzz in the cement sector stocks with
ICRA's report that despite pick-up in cement demand in Q1 FY19, higher coal,
pet coke prices and freight costs in the near-term are likely to put pressure
on the profitability margins and debt metrics of the cement companies.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,676.80
|
11,644.73
|
11,703.83
|
BSE Sensex
|
38,690.10
|
38,574.93
|
38,812.16
|
Nifty Top volumes
Stock
|
Volume
|
Previous close
(Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
281.57
|
361.75
|
356.83
|
367.83
|
ITC
|
249.73
|
319.85
|
315.37
|
322.47
|
Vedanta
|
241.37
|
230.00
|
227.08
|
231.98
|
ICICI Bank
|
223.49
|
344.35
|
339.55
|
347.30
|
SBI
|
199.36
|
308.60
|
306.23
|
310.73
|
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