Benchmark equity indices Sensex and Nifty snapped a two-day winning streak to log biggest fall in over a month on Tuesday, as investors turned less hopeful of a market booster package from the government.
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US delays 10% China tariffs, drops others; Dow rallies 2%, gold dives
US stocks, bond yields and commodities jumped, with the Dow Jones Industrial Average rising about 500 points, as a US delay in some tariffs against China rekindled hopes for a trade truce.
US stocks surged almost 2% on Tuesday as the Trump administration said it would delay 10% tariffs on some Chinese products, including laptops and cell phones, driving a 5% surge in shares in iPhone maker Apple Inc. The Office of the U.S. Trade Representative said tariffs would also be delayed until Dec. 15 on "computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing."
The Trump administration on Tuesday delayed imposing a 10% import tariff on laptops, cell phones, video game consoles and some other products made in China that had been scheduled to start next month, in an abrupt pull-back from a hardline stance on Chinese trade. The U.S. Trade Representative's Office action was published just minutes after China's Ministry of Commerce said Vice Premier Liu He conducted a phone call with U.S. trade officials.
On the hourly chart, the trendline has been acting as a stiff barrier for the last couple of sessions while the index appeared to have completed the Three Wave pullback at the Friday’s high of 11,181. Nifty seems to have started the next down leg. Going ahead, the recent low of 10,782 will be on the bears’ radar, below which Nifty can roll towards 10,455, which is the 78.6 per cent retracement of the October-June rally
- Gaurav Ratnaparkhi, Sharekhan
The internals of Nifty remain weak, with the near-term oscillators losing most of their bullish momentum. The index could retest its recent swing low of 10,782 initially and any incremental selling pressure could make Nifty test the support zone at 10,500-10,600
Nifty failed to cross its 200-DMA at 11,170, leading to a massive decline. A sustained trade below 10,900 level will trigger a breakdown from a Bear Flag pattern, dragging it lower to 10,780 and 10,700 levels. On the flip side, a sustained trade above 10,900 can trigger a short-covering rally to 11,060-11,140 levels
- Aditya Agarwala, YES Securities
A long negative candle was formed on Tuesday, which signals a formation of bearish engulfing type pattern, after a small rise (not a classical one). Today's sharp negative reversal after a small rise signals more weakness ahead in the coming sessions. The crucial lower supports to be watched at 10,782
- Nagaraj Shetti, Technical Research Analyst, HDFC Securities
RSI on the daily chart is now placed at 36.01 level, indicating a sell signal. If Nifty sustains below the 11,000 level, the index could further move to 10,850. With no clarity about the relief measures on surcharge tax on FPIs and stimulus for other sectors, including auto, the market may see further selling with negative global markets. Auto, pharma, and finance sectors are looking weak and could show more fall
- Romesh Tiwari, Head of Research, CapitalAim
Selling like hotcakes
Total trading volume in Reliance Industries at 4.79 crore shares, highest in 13 years
In deep pain
YES Bank at fresh five-year low, down more than 10% at Rs 73.60
FIIs net sell Rs 638.28 crore and DIIs net buy Rs 201.53 crore in equities today (provisional)
Nifty formed a Bearish Marubozu on the daily chart, which implied bear dominance as the index erased half of the recovery of last week. Now, as long as the index holds below 11,111 level, it could retest multiple support at 10,850 and then 10,780 levels, while on the upside hurdles are seen at 11,111 and then 11,150 levels
- Chandan Taparia is Technical & Derivative Analyst at MOFSL
We expect the markets to remain volatile and choppy in the near term in the backdrop of weak domestic sentiments given the on-going economic slowdown. Further, on the global market front, market participants would keep an eye on US-China trade tensions, fluctuations in crude oil and currency movement
We believe the bears are here to stay for awhile and it won't be easy and quick for the market to recover anytime soon. We remain cautious and maintain our sell on a rising approach
- Mustafa Nadeem, CEO Epic Research
Indian markets have been tagging along global markets in palpable risk-off sentiment due to multiple challenges of intensification of US-China trade war, selloff in Argentina and Hong Kong markets. Reliance stock’s best day in a decade performance on the back of pro-investor statements in its AGM couldn’t save the day for market
- Jagannadham Thunuguntla, Centrum Broking
Gold hits over six-year peak on risk-off sentiment
Gold prices scaled their highest in more than six years on Tuesday, as concerns around protests in Hong Kong and an Argentine currency crash amid fears of global economic slowdown, prompted investors to move away from riskier assets.
Spot gold rose 0.7% to $1,521.98 per ounce as of 0715 GMT, its highest since April 2013.
Price as on 13 Aug, 2019 03:01 PM, Click on company names for their live prices.
There is a complete fear factor in the market today where everybody wants to avoid taking decisions and buyers actually spending money
- A Balasubramanian, CEO, Aditya Birla Sun Life AMC
Top 5 NSE gainers
Price as on 13 Aug, 2019 02:51 PM, Click on company names for their live prices.
China central bank official says yuan at right level
China's yuan is at an appropriate level currently and two-way fluctuations in the currency will not necessarily cause disorderly capital flows, a senior official at the People's Bank of China told Reuters on Tuesday.
The yuan has weakened nearly 2.4 per cent since US President Donald Trump threatened earlier this month to impose more tariffs on Chinese goods from Sept. 1, though there are signs China is trying to stem the declines.
Sandip Sabharwal on YES Bank
#YesBank QIP was apparently oversubscribed 3 times. Stock is now 15-20% below QIP prices. The investors who bid ag… https://t.co/GFvdgkw0Dw
May have to cut FY20 sales estimates if slowdown continues
Passenger vehicle sales fall for 9 consecutive months, drop 31% in July
Declining for the ninth consecutive month, domestic passenger vehicle (PV) sales dropped 30.98 per cent to 2,00,790 units in July, from 2,90,931 units in the same period a year ago.
Domestic car sales were down 35.95 per cent at 1,22,956 units as against 1,91,979 units in July 2018, according to data released by the Society of Indian Automobile Manufacturers (SIAM) on Tuesday.
Motorcycle sales last month declined 18.88 per cent to 9,33,996 units for the month as against 11,51,324 units in the year-ago period.
Bharat Forge Q1 net profit falls 28% to Rs 171.92 crore
Auto components major Bharat Forge on Tuesday posted a 28 per cent decline in its consolidated net profit at Rs 171.92 crore for the first quarter ended June 30, 2019, on account of lower income.
The company had reported a net profit of Rs 238.74 crore in the same period of the previous fiscal.
Siam says auto sector needs revival package from govt
ONGC shares up ahead of Q1 results
KR Choksey Shares and Securities believes that ONGC is likely to report healthy performance owing to rise in crude prices on a sequential basis coupled with rising gas production. However, declining gas production can be a slight negative. Average realisation is estimated at $67 per barrel for the quarter.
Kotak Institutional Equities sees 10.90 per cent YoY and 21.70 per cent QoQ rise in net profit during the quarter. It sees 6 per cent YoY and 9.50 per cent QoQ rise in net sales in June quarter.
Alembic Pharma gets USFDA nod for ophthalmic solution
Price as on 13 Aug, 2019 10:55 AM, Click on company names for their live prices.
Brokerage firm Prabhudas Lilladher believes that the coal major may post 20.50 per cent year-on-year (YoY) rise in adjusted net profit on 2.50 per cent and 19.50 per cent increase in sales and EBITDA, respectively, in June quarter. However, it sees 24.30 per cent and 13.60 per cent fall in adjusted net profit and sales on QoQ basis.
Kotak Institutional Equities projected 15.20 per cent YoY rise in net profit for Coal India in Q1FY20. On the other hand, it sees 27.70 per cent QoQ dip in net profit.
Motherson Sumi slips 5% post Q1 results
Shares of Motherson Sumi Systems slipped nearly 5 per cent in early trade on Tuesday after the company on Monday said its consolidated net profit slipped 41.67 per cent to Rs 360.64 crore for the quarter ended June 30.
Brokerage firm Nomura maintained ‘Buy’ rating on the stock with a target price of Rs 156.
"Revenue was largely in line with our estimate and consensus. The demand outlook for both global luxury and domestic passenger vehicle industry remains weak and is a matter of concern. US Class 8 truck industry is also likely to enter a sharp downturn in FY21. New order wins and ramp up in SMP revenue and margins are the key points to monitor,” Nomrua said in a report.
ICICIdirect.com said that Motherson Sumi Systems reported steady performance in Q1FY20 and was above their estimates on all fronts. “Key surprise however was 35 per cent YoY growth in revenues at its arm SMP along with 7.5 per cent EBITDA margins on the consolidated basis, up 24 bps QoQ,” it said.
Sensex rallies 500 pts; Nifty tops 11,150 Rupee trades at 71.13 against dollar.
Singapore trading sets stage for positive start
Nifty futures on the Singapore Exchange were trading 17 points, or 0.15 per cent, higher at 11,107, indicating a positive start for Dalal Street.
Tech view: No trend reversal yet
The market is likely to consolidate this week amid rangebound trade without making much headway on either side and oscillate between the 50-week and 100-week moving averages. The short-term technical charts have seen Nifty bounce back 250-odd points from the recent low. However, higher timeframe charts confirm and show that this may be just a technical pullback and not a trend reversal.
Asia stocks take cues from Wall-St
Asian shares fell on Tuesday as fears about a drawnout Sino-US trade war, protests in Hong Kong and a crash in Argentina's peso currency drove investors to safe harbours like bonds, gold, and the yen. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.26 per cent while Japan's Nikkei tumbled 1.28 per cent.
Oil prices drop amid slowing demand
Oil prices edged lower on Tuesday, offsetting narrow gains in the previous session, on the expectation major producers would continue to reduce global supplies due to a slowing economic growth outlook. International benchmark Brent crude futures were down 11 cents or 0.2 per cent, from the previous settlement, to $58.46 a barrel.
US stocks settle higher
US stocks ended lower on Monday, as the market was sunk by growing worries about the prospects of US economic growth and worsening US-China trade frictions. The Dow Jones Industrial Average index fell 391.00 points, or 1.49 per cent, to 25,896.44 on Monday. The S&P500 inex decreased 35.96 points, or 1.23 per cent, to 2,882.70. The Nasdaq Composite index dropped 95.73 points, or 1.20 per cent, to 7,863.41.
CPI inflation numbers today
A mixed trend in inflation is likely. Nirmal Bang Institutional Equities expects consumer price index (CPI) inflation for July to come in at 3.35 per cent YoY, up from 3.18 per cent in June, led by higher food & beverage inflation retail inflation (WPI) to come in at 1.81 per cent in July from 2.02 per cent in June, largely due to a high base.
Sun Pharma Q1 nos today
Sun Pharma's June quarter results, scheduled for Tuesday, could be boosted by one-off gain from US supplies, said, analysts, who otherwise largely expect a marginal de-growth in profit for the quarter. Updates on Ilumya-related R&D spend and Halol EIR (establishment inspection report) will be keenly tracked, they said.
DIIs buy Rs 607 worth equities
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 204 crore on Friday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 607 crore, data suggests.
Sensex on Friday
BSE Sensex rallied 254.55 points or 0.68 per cent higher at 37,581.91 while NSE Nifty ended at 11,109.65, up 77.20 points or 0.70 per cent.
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