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Weak rupee, credit crisis worries drag equity market down 3% over week

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SENSEX NIFTY MARKET

Mumbai, Sep 22 : Persistent depreciation in the Indian rupee and high crude oil prices coupled with concerns over credit crisis dragged the key equity indices three per cent lower on a weekly basis during September 17-21.

The week started on a negative note, both in the domestic and global markets, primarily owing to the US announcement of fresh tariffs on Chinese imports.

This was the third consecutive week that saw fall in the Indian equity market.

The stock exchanges were, however, closed on September 20 on account of Muharram.

A major slump hit the market on Friday afternoon, with the S&P BSE Sensex losing over 1,100 points, only to partially recover from the lows minutes later. Analysts described it as a panic sell-off across the board, specifically in the banking and finance space, as there were concerns over credit risk.

“Firesale of financial units by IL&FS for repaying its CPs (commercial papers) added fuel to fire,” said Mustafa Nadeem, CEO, Epic Research.

Infrastructure Leasing and Financial Services (IL&FS), which defaulted on its commercial paper obligation earlier this year, missed payments again on Friday. This increased concerns of a credit crisis among the investors.

On a weekly basis, the Sensex closed at 36,841.60 points, lower 1,249.04 points or 3.28 per cent from its previous close.

Similarly, the wider Nifty50 of the National Stock Exchange on Friday closed at 11,143.10 points, down 372.1 points or 3.23 per cent from the previous week’s close.

“Indian markets remained in bear grip right from the beginning of the week, largely weighed down by a weakening rupee, escalation in trade war and rise in crude oil prices,” said Prateek Jain, Director of Hem Securities.

He added that investor’s sentiments were further weakened by the announcement of merger of three public sector banks — Bank of Baroda, Vijaya Bank and Dena Bank.

“On Friday, towards the fag-end of the week, traders and investors witnessed a highly catastrophic market driven by a sharpfall in the NBFC sector,” Jain said.

In terms of investments, provisional figures from the stock exchanges showed that foreign institutional investors sold scrips worth Rs 2,674.12 crore, while the domestic institutional investors bought Rs 1,782.63-crore stocks in the truncated week.

According to National Securities Depository (NSDL) figures, foreign portfolio investors (FPIs) divested Rs 2,231.37 crore, or $306.04 million, in the equities segment during the week ended September 21.

On the currency front, the Indian rupee closed at 72.20 a US dollar on Friday recovering 35 paise from the previous week’s close of 71.85.

On Tuesday, it touched an all-time low of 72.91 per greenback.

The top sectoral gainer was oil and gas, while the major losers were realty, infrastructure and finance counters, said Deepak Jasani, Head of Retail Research at HDFC Securities.

The top weekly Sensex gainers were ONGC (up 6.88 per cent at Rs 180.10); Power Grid (up 3.62 per cent at Rs 200.20); Tata Steel (up 3.15 per cent at Rs 624.55); Tata Consultancy Services (up 2.94 per cent at Rs 2,103.80); and Vedanta (up 2.66 per cent at Rs 229.70 per share).

The major losers were Yes Bank (down 27.79 per cent at Rs 227.05); Tata Motors (DVR) (down 7.44 per cent at Rs 131.85); Axis Bank (down 5.69 per cent at Rs 599.40); Maruti Suzuki (down 5.44 per cent at Rs 8,039.55); and State Bank of India (down 5.39 per cent at Rs 270.05 per share).

(Ravi Dutta Mishra can be contacted at [email protected])

Business

Global cues, oil prices drag equity indices lower

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SENSEX-

Mumbai, Dec 10: Broadly negative Asian stock exchanges along with a rise in global crude oil prices and domestic political uncertainty pulled the key indices of the Indian equity market lower during the morning trade session on Monday.

According to market observers, heavy selling was witnessed in all sector-based indices of the BSE.

Around 10.05 a.m., the broader Nifty50 of the National Stock Exchange (NSE) traded at 10,512.30 points — down by 181.40 points or 1.70 per cent — from its previous close.

The barometer 30-scrip Sensitive Index (Sensex), which opened at 35,204.66 points, traded at 35,099.54 points — lower by 573.71 points or 1.61 per cent — from its previous session’s close of 35,673.25 points.

IANS

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Analysis

Election results, oil prices to direct equity indices movements – Market Outlook

Last week, the Indian equity indices dipped over concerns of a resurgence of US-China trade tensions and reports of crude oil supply cut.

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NSE Nifty

Mumbai, Dec 9 : The outcome of Assembly elections in five states, along with fears over an escalation in US-China trade war and volatility in crude oil prices, are expected to determine the trajectory of the key Indian equity indices next week.

Market observers opined that the direction of foreign fund flows in the backdrop of US Fed’s policy decision, coupled with the upcoming macro-economic data points on industrial production and inflation will also affect investor sentiments.

“Going into the next week, undoubtedly the outcomes of state elections, US Federal Reserve policy meet and other developments from the global arena will dictate the trend of the market,” said SMC Investments and Advisors’ Chairman and Managing Director D.K. Aggarwal.

On Tuesday, December 11, the results of state Assembly elections in Rajasthan, Madhya Pradesh, Chattishgarh, Telangana and Mizoram will be declared. These elections are considered as a crucial indicator of public mood before the Lok Sabha elections which are due in April-May 2019.

“In the week ahead, Indices are also likely to face pressure from a global sell-off and renewed up-tick in crude oil prices,” said Sahil Kapoor, Chief Market Strategist, Edelweiss Investment Research.

“State election results can cause markets to remain volatile and 1 per cent plus intra-day moves may be a common place.”

Besides the outcome of the state elections, an escalation in global trade protectionist measures after the arrest of Huawei’s Global CFO over alleged violation of US sanctions on Iran is expected to exert pressure on the indices.

Even an anticipated rise in crude oil prices after the Organisation of Petroleum Exporting Countries (OPEC) and Russia decided to go in for a production cut of 1.2 million barrels per day from 2019 might hinder the markets’ attempts to edge higher.

The brent crude oil was priced at over $63 per barrel last Friday.

Additionally, investors will remain cautious over an expected hike in US interest rates which can potentially drive away foreign portfolio investors (FPIs) from emerging markets such as India.

Last week, provisional figures from the stock exchanges showed that foreign institutional investors (FIIs) sold stocks worth Rs 865.52 crore during the week ended December 7.

These factors are also expected to exert pressure on the Indian rupee.

According to Anindya Banerjee, Deputy Vice President for Currency and Interest Rates with Kotak Securities, the Indian rupee is expected to range from 70.50 and 72.50 against a US dollar in the coming week.

“With exit polls showing the risk of a BJP loss in key states of Rajasthan and MP, USD/INR can rally on Monday morning due to short covering from traders who are short on the US Dollar,” Banerjee told IANS.

“Next week will be dominated by the election results. If BJP retains MP and at least one from Chhattisgarh and Rajasthan, then rupee can rally. However, a BJP loss can be negative for INR. The range can be large. It can between 70.50 and 72.50.”

However, in the past week, the local currency moved Rs 1.21 from its previous week’s close of Rs 69.59. The rupee closed at 70.80 a US dollar last Friday.

Apart from the rupee movement, markets will take cues from the macro-economic data points such as the IIP (Index of Industrial Production) and Balance of Trade figures.

The Central Statistics Office (CSO) is slated to release the macro-economic data points of IIP and CPI (consumer price index) on December 12, Wednesday.

Other key data points such as the wholesale price indexed-inflation (WPI) and the Balance of Trade data will be released on December 14.

On technical charts, the trajectory of National Stock Exchange (NSE) Nifty50 is expected to be volatile.

“Technically, while the Nifty has corrected sharply this week, the index has managed to bounce back and hold above the 50-day SMA. This gives the bulls a chance to make a comeback,” HDFC Securities’ Retail Research Head Deepak Jasani told IANS.

“Further, upsides are likely once the immediate resistances of 10,775 points are taken out. Crucial supports to watch for any weakness are at 10,588 points.”

Last week, the Indian equity indices dipped over concerns of a resurgence of US-China trade tensions and reports of crude oil supply cut.

Consequently, the S&P BSE Sensex lost 521.05 points, or 1.43 per cent, to close at 35,673.25 points, whereas the 50-share NSE Nifty declined 187.05 points, or 1.71 per cent, to settle at 10,693.70 points.

(Rohit Vaid can be contacted at [email protected])

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Business

Sensex ends 361 points up; Nifty settles short of 10,700

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Sensex equity Nifty

Mumbai, Dec 7: The key Indian equity indices surged around one per cent on Friday supported by a rise in banking stocks and easing crude oil prices, with the S&P BSE Sensex closing over 360 points higher.

Along with banking stocks, which rose 485.24 points, healthy buying was also witnessed in auto and capital goods stocks, which gained 171.72 points and 156.38 points, respectively.

The Nifty50 on the National Stock Exchange (NSE) ended higher by 93 points or 0.87 per cent at 10,693.70 points.

The Sensex closed at 35,673.25 points, higher by 361.12 points or 1.02 per cent, against the previous close of 35,312.13 points.

According to analysts, a drop in crude oil prices supported investors’ sentiments. On Friday, the Brent crude oil price fell below the $60-per-barrel mark and traded at around $59 per barrel.

Oil prices fell after the Organisation of Petroleum Exporting Countries (OPEC) delayed the output-cut decision on Thursday as it awaited support from Russia, a non-OPEC major oil producing country.

On the Sensex, the top gainers were Kotak Mahindra Bank, Adani Ports, Bajaj Auto, Infosys and Asian Paints, whereas the major losers were Sun Pharma, Coal India, Yes Bank, NTPC and Tata Steel.

IANS

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