22nd Jun 2018 | 17:23 PM IST

Volatility Continues As Trade War Tensions Escalate Between US & China

Our Analysis

The stock market traded in the range of 10,650 to 10,800 this week as well. Barring Wednesday, the market remained low due to weakness in global market amid US-China trade war and lack of positive domestic trigger.

Almost all the sectorial indices remained weak along with pharma which outperformed last week. Even though the correction in crude oil prices managed the pressure the trade war tension remained strong.

Both domestic and global markets are awaiting the outcome of the OPEC meeting, where countries are expecting higher output. The market is expected to remain volatile at least till the next month.

This Week’s Market Highlights:

Benchmark Indices:

1. The benchmark indices began the week on a lower note as Sensex was down 74 points & Nifty closed below 10,800. Global markets too are down.
2. On Tuesday market closed sharply lower as Sensex fell 261 points while Nifty below 10,750 amid weakness in global peers.
3. All sectoral indices closed in red led by IT, metal, auto, realty & PSU banks while midcap index underperformed benchmark index, was down 228 points. 4. On Wednesday equity indices rebounded sharply as Sensex surged 261 points & Nifty above 10750 followed by the rally in global peers.
5. Reliance, HDFC twin, banking, financials, realty and metal led the rally while IT & FMCG remained weak. The Nifty midcap index also rose by half a per cent.
6. On Thursday market resumed the losses as Sensex fell by 115 points while Nifty was below 10750 amid consolidation ahead of OPEC meet outcome.
7. On Friday market opened lower & remained volatile ahead of OPEC outcome. Led by the recovery in the last hour of trade which was backed by banking & financial stocks, benchmark indices closed sharply higher.

Sectoral Index:

- Broader market underperformed this week as investors still think that stocks are overvalued as midcap fell 2-3%. Nifty metal, PSU bank, pharma, auto, FMCG & realty index fell 3-6% this week while some private banks, Reliance & HDFC twin along with OMCs supported the market.

- The global market started on a weak note due to increasing pressure between US & China regarding trade tariff war but recovered a fair bit the trade war eased a little as well as the fall in crude oil prices on expectations on higher output. Asian market also felt the pressure because of the trade war along with weakness in currency.

Movers & Shakers

Shares of AstraZeneca Pharma India rose over 10% after announcing that it has received approval from the Indian drug regulator to market Durvalumab, a cancer treatment medicine, in the country. Also last week AstraZeneca & Eli Lilly were required to halt a global trial of a drug meant to treat people suffering from early & mild forms of Alzheimer’s disease after a panel found the treatment was unlikely to meet its goal.

Shares of Avanti Feeds fell over 15% this week as company has fixed June 27 for sub-division of equity shares from a face value of Rs.2 each to Rs.1 each and issue of bonus equity shares of Rs.1 each in the ratio of 1:2. A Indra Kumar, Chairman and Managing Director, Avanti Feeds said, they are not overly worried about 1-2% increase in the anti-dumping duty by the US because the duty has been there for 18 years now and it won’t have much impact on the industry.

Key Market Drivers

All the six members of India monetary policy committee agreed that interest rates needed to be increased to counter oil-driven price pressures & expectations of higher inflation in the future, as per the minutes of the June 6 meeting. The committee had voted unanimously to hike the benchmark repo rate by 25 bps to 6.25% at the meet. This was the first rate hike in over four years. While there was a consensus that the time for a rate hike had come, there was also agreement among most members that the uncertain global and domestic environment justified a neutral stance. This would allow the committee to respond to emerging growth and inflation dynamics.

The global trade war deepened Thursday with China reiterating it will hit back if the latest tariff threats from Donald Trump materialise, while India followed the European Union in slapping retaliatory levies on U.S goods. India raised tariffs on a slew of items in retaliation for the U.S imposing higher levies on some products shipped from the South Asian nation, echoing steps taken by China, the European Union and other trading partners.

Event Watch

India’s Federal Fiscal Deficit (May), Infrastructure Output on YoY (May) & Foreign Debt (USD) data will be on 29th June 2018.

Global:- U.S. GDP for Q1 (QoQ) data will be on 28th June 2018. GBP GDP for Q1 (QoQ & YoY) will be on 29th June 2018.

Stocks To Watch

HCL Technology Ltd. is on the upside while SRF Ltd. is on the downside.

Share Market News 21-June-2018

The Market Resumes Decline; Nifty Below 10,750 Ahead Of OPEC Outcome

The Benchmark indices started on a positive note as Sensex gained 90 points & Nifty near 10,800 amid positive Asian cues. The equity market traded rangebound as Investors monitor developments between US & China trade war. Heavyweights like Reliance, ICICI bank supported the market while PSU bank, FMCG & Auro remained under pressure. The midcap index also traded in the red.

In the afternoon session, the market continued to be rangebound as Sensex was up 30 points while Nifty above 10,750. Reliance, ICICI bank & financial stocks supported the market while PSU bank, pharma, FMCG & auto stocks bleeding. Nifty midcap index also fell third of a percent.

In last hour of trade, the market remained under pressure as Sensex fell 100 points while Nifty below 10,750 amid consolidation. The market ended lower after consolidation. OMCs, ICICI Bank, Reliance supported market while PSU bank, metal, pharma, auto & FMCG dragged the market most. Nifty Midcap index underperformed frontliners fell 106 points. Sensex closed 114.94 points down at 35,432.39, Nifty down by 30.95 points at 10,741.10.

Top Gainers

IOC by 4.02% to Rs.172.05, BPCL by 3.73% to Rs.426.00, HindPetro by 3.41% to Rs.318.40, ICICI Bank by 1.62%to Rs.297.95, Reliance by 1.21% to Rs.1,031.60.

Top Losers

M&M by -2.36% to Rs.883.10, Infratel by -2.23% to Rs.278.95, Dr. Reddy by -2.10% to Rs.2,318, Titan by -1.95% to Rs.871.00, Sun Pharma by -1.90% to Rs.553.40.

Analysis Of Top Gainer And Loser

IOC is the top gainer in today's market as Brent crude oil prices fell over 2% in the international market ahead of OPEC meet outcome due tomorrow.

M&M is the top loser in today's market as some selling pressure was seen in the stock as Auto sector underperformed in today’s market.

Key Market News

All six members of India’s monetary policy committee agreed that interest rates needed to be increased to counter oil-driven price pressures and expectations of higher inflation in the future, show minutes of the June 6 meeting. The committee had voted unanimously to hike the benchmark repo rate by 25 basis points to 6.25% at the meet. This was the first rate hike in over four years. While there was a consensus that the time for a rate hike had come, there was also agreement among most members that the uncertain global and domestic environment justified a neutral stance. This would allow the committee to respond to emerging growth and inflation dynamics.

The global trade war deepened Thursday with China reiterating it will hit back if the latest tariff threats from Donald Trump materialise, while India followed the European Union in slapping retaliatory levies on U.S. goods. India raised tariffs on a slew of items in retaliation for the U.S. imposing higher levies on some products shipped from the South Asian nation, echoing steps taken by China, the European Union and other trading partners.

Stocks To Watch

Zen Technologies Ltd. is on the upside while Balrampur Chini Mills Ltd. is on the downside.

ZenTech is currently trading at Rs.109.00, up by Rs.6.95 or 6.81% from its previous closing of Rs.102.05 on the NSE. The scrip opened at Rs.104.00 & has touched a high & low of Rs.115.40 and Rs.97.45 respectively. So far 40,22,102 (NSE) shares were traded on the counter. The current market cap of the company is Rs.968.84 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.158.75 on 01-January-2018 & a 52 week low of Rs.46.45 on 28-September-2017.

Balrampur Chini is currently trading at Rs.67.20, down by Rs.4.05 or 5.68% from its previous closing of Rs.71.25 on the NSE. The scrip opened at Rs.71.15 & has touched a high and low of Rs.71.35 & Rs.67.00 respectively. So far 60,78,918 (NSE) shares were traded on the counter. The current market cap of the company is Rs.1,539.61 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.182.50 on 13-September-2017 and a 52 week low of Rs.58.70 on 16-May-2018.

Share Market News –20-June-2018

Reliance Helps The Market To Halts 2-Day Decline; Nifty Above 10,750

The Benchmark indices edged higher as Sensex gained over 100 points & Nifty reclaimed 10,750 amid mix global cues. The equity market extended recovery as Sensex rose over 150 points while Nifty above 10,750 followed recovery in Asian peers. Except IT & FMCG all sectoral indices traded in green led by Realty, Pvt. bank & Metal while midcap index rose 0.35%.

In the afternoon session, the market traded at day’s high as Sensex surged over 200 points while Nifty above 10,750 amid a recovery in global peers. Heavyweights like Reliance Industries, HDFC twin, Realty, a private bank and financial traded strong while FMCG & IT traded in the red. Nifty Midcap index rose 75 points.

In last hour of trade, the market extended gain as Sensex rallied 250 points while Nifty well above 10,750 level. The market rebounded sharply followed by a rally in global peers amid heightened fears of a trade war between US & China. Reliance, HDFC twin, banking, financials, realty and metal led the rally while IT & FMCG remained weak. Nifty midcap index also rose half a percent. Sensex closed 260.59 points up at 35,547.33, Nifty up by 61.60 points at 10,772.05.

Top Gainers

Reliance by 2.32% to Rs.1,019.20, IndusInd Bank by 2.20% to Rs.1,974, Tata Steel by 1.89% to Rs.565.50, Kotak Mahindra Bank by 1.75%to Rs.1,326, VEDL by 1.72% to Rs.228.15.

Top Losers

UPL by -3.28% to Rs.625.00, HindPetro by -1.65% to Rs.307.85, IOC by -1.51% to Rs.166.05, ONGC by -1.37% to Rs.162.55, Tech Mahindra by -1.30% to Rs.908.45.

Analysis Of Top Gainer And Loser

Reliance Industries is the top gainer in today's market as strong buying was seen in the stock. The stock rose 13 times in past 15 sessions.

UPL is the top loser in today's market as the UPL-led consortium is in exclusive talks to acquire Bill Ackman-backed Platform Specialty Products Corp (Bloomberg).

Key Market News

The RBI today tightened norms for Liberalised Remittance Scheme (LRS) by making quoting of the permanent account number (PAN) mandatory even for transactions below USD 25,000. Under the LRS, all resident individuals, including minors, are allowed to freely remit up to USD 2,50,000 per financial year for any permissible current or capital account transaction or a combination of both. Individuals can avail of foreign exchange facility within the limit of USD 2,50,000 only.

OPEC ministers arrived in Vienna today for crunch talks on whether to reverse a landmark pact curbing oil output, with Iran pushing back against Saudi and Russian calls to ramp up production again. The upcoming June 22-23 meetings of OPEC and non-OPEC energy ministers are set to be the most contentious in a while, with several countries bristling at the thought of reversing a deal that has been in place for 18 months and helped lift oil prices to multi-year highs. However, Riyadh, which cheered Washington's exit from the nuclear deal, is under pressure from its US ally to boost output as Trump hopes to keep pump prices low ahead of November midterm elections.

Stocks To Watch

Jai Corp Ltd. is on the upside while InterGlobe Aviation Ltd. is on the downside.

Jai Corp is currently trading at Rs.153.85, up by Rs.15.80 or 11.45% from its previous closing of Rs.138.05 on the NSE. The scrip opened at Rs.139.00 & has touched a high & low of Rs.158.85 and Rs.136.25 respectively. So far 1,34,44,680 (NSE) shares were traded on the counter. The current market cap of the company is Rs.2,765.07 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.223.30 on 11-January-2018 & a 52 week low of Rs.68.25 on 11-August-2017.

InterGlobe is currently trading at Rs.1,136.45, down by Rs.92.20 or 7.50% from its previous closing of Rs.1,228.65 on the NSE. The scrip opened at Rs.1,221 & has touched a high and low of Rs.1,221 & Rs.1,126.35 respectively. So far 27,27,498 (NSE) shares were traded on the counter. The current market cap of the company is Rs.43,674.38 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.1,520 on 20-April-2018 and a 52 week low of Rs.1,022 on 25-September-2017.

Share Market News –19-June-2018

Sensex, Nifty Down For Second Day As Trade War Intensifies

The Benchmark indices started on a negative note as Sensex fell 100 points & Nifty fell 32 points followed weakness in Asian peers. The equity market extended losses as Sensex was down nearly 200 points while Nifty below 10,750 amid tariff war concern. All sectoral indices traded in red led by PSU Bank, Realty, Metal, IT, Auto & FMCG. Nifty midcap index also was down over 1%.

In the afternoon session, the market traded near day’s low as Sensex dropped over 200 points while Nifty continued to trade below 10,750, amid weakness in global peers. Nifty IT, Metal, PSU Bank, Realty & Auto indices fell over 1% while Nifty midcap index underperformed frontliners, was down 1.22%.

In the last hour of trade, sell-off continued in the market as Sensex was down 250 points while Nifty dropped near 10,700. The market closed sharply lower amid weakness in global peers on US-China trade war. All sectoral indices closed in red led by IT, metal, auto, realty & PSU banks which fell over 1% while midcap index underperformed frontliners was down 228 points. Sensex closed 261.52 points down at 35,286.74, Nifty down by 89.40 points at 10,710.45.

Top Gainers

Bajaj Finance by 1.17% to Rs.2,269.45, GAIL by 1.14% to Rs.341.95, ITC by 0.59% to Rs.266.10, HDFC by 0.46%to Rs.1,832, Power Grid by 0.23% to Rs.199.10.

Top Losers

VEDL by -3.51% to Rs.224.05, IOC by -3.05% to Rs.168.60, HindPetro by -3.03% to Rs.312.35, UPL by -2.64% to Rs.674.00, M&M by -2.29% to Rs.893.00.

Analysis Of Top Gainer And Loser

Bajaj Finance is the top gainer in today's market as strong buying continued to be seen in the stock on the back of strong coverage from brokerage firms.

Vedanta (VEDL) is the top loser in today's market despite inclusion in Sensex benchmark. Also, profit booking continued to be seen in the stock.

Key Market News

US President Donald Trump escalated a growing trade war with China by unveiling plans today to impose 10% tariffs on an additional USD 200 billion worth of Chinese goods. With the world's two largest economies already engaged in a confrontation long feared by markets and industry, Trump said he was pushing forward with fresh punitive measures over Beijing's "unacceptable" move to raise its own tariffs. "Further action must be taken to encourage China to change its unfair practices, open its market to United States goods and accept a more balanced trade relationship with the United States," Trump said in a statement.

The National Stock Exchange today said a final decision is expected by the first week of February 2019 on the arbitration proceedings with Singapore Exchange regarding the launch of new derivative products linked to its indices. Both bourses are locked in a tussle after Singapore Exchange, in April, announced the listing of new Indian equity derivative products from June. Last week, an arbitral tribunal restrained the SGX from launching any new derivative products linked to NSE's indices. However, it allowed continuation of existing SGX-Nifty contracts.

Stocks To Watch

Mahindra Lifespace Developers Ltd. is on the upside while Firstsource Solutions Ltd. is on the downside.

Mahindra Lifespace is currently trading at Rs.635.50, up by Rs.64.10 or 11.22% from its previous closing of Rs.571.40 on the NSE. The scrip opened at Rs.574.20 & has touched a high & low of Rs.659 and Rs.561 respectively. So far 11,54,087 (NSE) shares were traded on the counter. The current market cap of the company is Rs.3,297.68 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.659 on 19-June-2018 & a 52 week low of Rs.396.55 on 11-August-2017.

FSL is currently trading at Rs.74.50, down by Rs.4.75 or 5.99% from its previous closing of Rs.79.25 on the NSE. The scrip opened at Rs.78.85 & has touched a high and low of Rs.78.85 & Rs.73.55 respectively. So far 82,17,321 (NSE) shares were traded on the counter. The current market cap of the company is Rs.5,125.39 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.83.90 on 13-June-2018 and a 52 week low of Rs.31.50 on 28-June-2017.

Share Market News –18-June-2018

Market Closed Lower Amid Trade War Concern, Nifty Below 10,800

The Benchmark indices opened mildly lower with Sensex slipped 17 points & Nifty hold 10,800 amid weakness in Asian peers. The equity market continued to consolidate as Sensex dropped 30 points while Nifty traded above 10,800 despite global weakness. Nifty metal index lost over 2% while OMCs, auto & banks capped losses. Midcap index also traded lower by 50 points.

In afternoon session market continued to be rangebound as Sensex was down 20 points while Nifty hold 10,800 despite weakness in global market. OMCs, Auto & some Pvt. bank supported market while metal fell over 2%. Nifty Midcap index underperformed frontliners was down 70 points.

In last hour of trade market remained lower as Sensex down 30 points while Nifty hold 10,800. The market ended mildly lower after consolidation even as global peers under pressure on escalated trade war between U.S. & China. Metal, technology stocks dragged the market while OMCs, some pvt. bank & auto stocks supported the market. Nifty midcap index fell 66 points. Sensex closed 73.88 points down at 35,548.26, Nifty down by 17.85 points at 10,799.85.

Top Gainers

HindPetro by 4.78% to Rs.321.00, ICICI Bank by 4.07% to Rs.294.00, IOC by 3.61% to Rs.173.80, Dr. Reddy by 2.27%to Rs.2,403.20, BPCL by 2.24% to Rs.441.50.

Top Losers

Hindalco by -2.97% to Rs.230.35, VEDL by -2.95% to Rs.231.55, Bharti Airtel by -2.31% to Rs.369.50, Kotak Bank by -2.01% to Rs.1,313, Bajaj Finance by -1.92% to Rs.2,239.65.

Analysis Of Top Gainer And Loser

HindPetro is the top gainer in today's market after crude oil price fell for second day in a row ahead of OPEC meet to discuss whether to relax oil output caps.

Hindalco is the top loser in today's market on escalated trade tariff war between the two of the biggest economic country in world U.S. & China.

Key Market News

President Donald Trump has approved tariffs on Chinese goods worth about $50 billion, said a person familiar with the decision, ratcheting up a confrontation on trade with Beijing and triggering losses in the domestic stock market. The U.S. is also nearing completion of a second list of products ordered by Trump, worth $100 billion, which would be subject to the same public hearing process as the first, Reuters reported on Friday. In reply China also threat to impose duties on U.S. oil imports will hit a business that has soared in the last two years, and which is now worth almost $1 billion per month.

In the wake of questionable credit discipline shown by Indian corporate borrowers, the RBI is leaving no stone unturned to instil some discipline through the banks it regulates. The latest proposal by the central bank through a draft guideline is to make all borrowers enjoying working capital limit in excess of Rs.150 crore to compulsorily borrow through the demand loan route for at least 40% of the limit before touching other modes like cash credit, overdraft, bill discounting etc.

Stocks To Watch

Indo Count Industries Ltd. is on the upside while Torrent Power Ltd. is on the downside.

Indo Count is currently trading at Rs.76.35, up by Rs.8.35 or 12.28% from its previous closing of Rs.68.00 on the NSE. The scrip opened at Rs.68.00 & has touched a high & low of Rs.78.75 and Rs.67.25 respectively. So far 35,65,131 (NSE) shares were traded on the counter. The current market cap of the company is Rs.1,517.02 Crore. The NSE/BSE group stock has touched a 52 week high of Rs.187.40 on 22-June-2017 & a 52 week low of Rs.67.20 on 06-June-2018.

Torrent Power is currently trading at Rs.239.75, down by Rs.13.85 or 5.46% from its previous closing of Rs.253.60 on the NSE. The scrip opened at Rs.253.00 & has touched a high and low of Rs.253.55 & Rs.239.25 respectively. So far 13,69,497 (NSE) shares were traded on the counter. The current market cap of the company is Rs.11,575.66 Crore. The BSE/NSE group stock has touched a 52 week high of Rs.307.35 on 22-January-2018 and a 52 week low of Rs.171.50 on 27-June-2017.

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