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The market continued to see relentless selling pressure between October 1 and 5, with the Nifty falling 5.6 percent to close a tad above 10,300 levels. The surprise move on rates by Reserve Bank of India's (RBI's) Monetary Policy Committee (MPC), the consistent fall in the rupee and crude volatility attributed to the selling pressure.
The Nifty 50 closed at a six-month low on October 5, making a large bearish candle on the daily as well as weekly charts.
Experts said the sharp fall in the last few sessions indicated that there could be a relief rally in the coming week, but if it corrects further it could break the psychological 10,000 level as well.
After opening lower at 10,514.10, the Nifty 50 gradually extended losses as the day progressed to fall below 10,300 and hit an intraday low of 10,261.90 in late trade. The index closed 282.80 points down at 10,316.50.
India VIX moved up by 4.32 percent to 19.73 levels. Volatility is not cooling down which is not giving the relief to bulls and suggests a tight bear grip in the market, experts said.
According to Pivot charts, the key support level is placed at 10,205.37, followed by 10,094.23. If the index starts moving upwards, key resistance levels to watch out are 10,484.17 and 10,651.83.
The Nifty Bank index closed at 24,443.45, down 375.85 points on Friday. The important Pivot level, which will act as crucial support for the index, is placed at 24,102.66, followed by 23,761.93. On the upside, key resistance levels are placed at 24,932.16, followed by 25,420.93.
Stay tuned to Moneycontrol to find out what happens in currency and equity markets today. We have collated a list of important headlines from across news agencies.
Wall Street falls as solid jobs report boosts bond yields
US stocks dropped for a second straight day on Friday, weighed down by another rise in Treasury yields in the wake of a solid jobs report that capped off a week of robust data. The losses were led by heavyweight stocks in the technology and communication services sectors including all members of the so-called FAANG group Facebook , Amazon , Apple , Netflix and Alphabet . Online retailer Amazon, part of the consumer discretionary sector, lost 1 percent.
The Dow Jones Industrial Average fell 180.43 points, or 0.68 percent, to 26,447.05, the S&P 500 lost 16.04 points, or 0.55 percent, to 2,885.57 and the Nasdaq Composite dropped 91.06 points, or 1.16 percent, to 7,788.45.
Asian shares fall
Shares in Asia stumbled in early trade on Monday as investors waited with bated breath as China’s markets prepare to reopen following a week-long holiday and after its central bank cut banks’ reserve requirements in a bid to support growth.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 percent, after major stock markets around the world fell for a second straight day on Friday. Australian shares were down 1 percent. Markets in Japan are closed for a holiday.
SGX Nifty
Trends on SGX Nifty indicate a negative opening for the broader index in India, a fall of 17.5 points or 0.17 percent. Nifty futures were trading around 10,282-level on the Singaporean Exchange.
Oil drops 1% as US considers granting some waivers on Iran crude sanctions
Brent crude oil prices fell by more than 1 percent on Monday after Washington said it may grant waivers to sanctions against Iran’s oil exports next month, and as Saudi Arabia was said to be replacing any potential shortfall from Iran.
International benchmark Brent crude oil futures were at $83.25 per barrel at 0115 GMT, down 91 cents, or 1.1 percent, from their last close. US West Texas Intermediate (WTI) crude futures were down 57 cents, or 0.8 percent, at $73.77 a barrel.
Forex reserves down by $1.26 bn to $400.52 bn
The country's foreign exchange reserves declined by $1.265 billion to $400.52 billion in the week to September 28 due to a fall in foreign currency assets, according to RBI data. In the previous week, the reserves had risen by $1.3 billion to $401.790 billion.
In the reporting week, foreign currency assets, a major component of the overall reserves, declined by $1.169 billion to $376.243 billion, as per the data.
Rupee slumps to all-time low of 73.76 as RBI holds rate
The rupee slidded by 18 paise to finish at a fresh lifetime low of 73.76 against the US dollar on October 5 after the RBI unexpectedly kept the policy rate unchanged. The domestic unit crashed below the 74-mark for the first time ever in intra-day trade on persistent capital outflows and high crude oil prices.
It recovered to a high of 73.42, but failed to sustain the momentum and plunged to 74.23 after RBI's policy announcement. It finally closed at 73.76, down by 18 paise or 0.24 percent, marking its fourth straight session of decline.
Govt plans global ETF to meet Rs 80K divestment target: Report
The Centre is planning to move its disinvestment programme overseas with an exchange traded fund (ETF), according to a report by The Times of India. The plan will help the government meet its FY19’s divestment target of Rs 80,000 crore. An exchange traded fund is similar to a mutual fund, which comprises of a bundle of shares or bonds.
The report suggests that the Department of Investment and Public Asset Management (DIPAM) has already started exploring markets even as the plan may require regulatory tweaks.
China pumps $109 bn into economy as trade war bites on growth
China's central bank said on Sunday that it was cutting the reserve requirement ratios (RRRs) by one percent from October 15 which will inject a net $109.2 billion in cash into the banking system, amid a deepening trade war with the US that has increased pressure on growth in the world's second-largest economy.
The reserve cut, the fourth by the People's Bank of China (PBOC) this year, came after Beijing pledged to speed up plans to invest billions of dollars in infrastructure projects as the economy shows signs of cooling further. The PBOC said on Sunday it will cut the RRR for RMB deposits by one percentage point starting from October 15. The cut will enable banks in China to release 1.2 trillion-yuan cash for additional lending.
Fund raising via IPO slumps 53% to Rs 12,470 crore in Apr-Sept
Indian companies raised Rs 12,470 crore through initial public offerings (IPOs) in April-September this fiscal, a plunge of 53 percent from the year-ago period, mainly due to volatile equity markets and uncertainties in macro environment.
Some analysts believe that the IPO market for the second half of the ongoing financial year will be poor as the secondary market would continue to be choppy on account of high crude price, depreciating rupee and tariff war between US and China.
According to the latest data compiled from stock exchanges, 10 companies garnered Rs 12,470 crore through their respective IPOs in April-September of the current fiscal, much lower than a record Rs 26,720 crore raised by 19 firms in the year-ago period.
IPOs, FPOs, ESoPs exempt from STT for availing concessional long-term capital gain tax
Initial public offerings, bonus, rights issues and ESoPs will be eligible for concessional rate of 10 percent long-term capital gains (LTCG) tax even if the Securities Transaction Tax has not been paid earlier. In the 2018-19 budget, the government had after a gap of 14 years reintroduced concessional 10 percent on LTCG tax exceeding Rs 1 lakh from sale of shares, subject to payment of Securities Transaction Tax (STT) at the time of acquiring the equities.
The ministry has notified a list of carve outs which will be exempt from the requirement of paying STT. These include IPO, follow-on public offer (FPO), bonus or rights issue by a listed company, acquisition approved by Court/NCLT/SEBI/RBI, acquisition pursuant to exercise of ESOPs.
FPIs pull out Rs 9,300-cr in just 4 sessions
Foreign investors have pulled out over Rs 9,300 crore (USD 1.3 billion) from the Indian capital markets in the last four trading sessions on unabated fall in rupee and rise in crude oil price. The latest withdrawal comes following a net outflow of over Rs 21,000 crore from the capital markets (both equity and debt) last month. Prior to that, they had put in a net amount of Rs 7,400 crore in July-August.
According to the latest depository data, foreign portfolio investors (FPIs) withdrew a net sum of Rs 7,094 crore from equities during October 1-5, and Rs 2,261 crore from the debt market, taking the total to Rs 9,355 crore (USD 1.3 billion).
Aavas Financiers debut today
Non-banking finance company Aavas Financiers is set to debut on the bourses on October 8. The retail, affordable housing finance company, primarily serves low and middle income self-employed customers in semi-urban and rural areas in India.
The final issue price has been fixed at the higher end of the price band at Rs 821 per share. The Rs 1,734-crore public issue managed to garner 97 percent subscription during September 25-27.
26 companies to report Sept quarter numbers
As many as 26 companies will announce their quarterly earnings this week including TCS, Hindustan Unilever, Bandhan Bank, Zee Entertainment, Karnataka Bank, AU Small Finance Bank and Avenue Supermarts among others.
With inputs from Reuters & other agencies
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