Indian equity benchmarks snapped
their four-session gaining streak and ended lower on Wednesday weighed by
selling in Telecom, Realty and TECK stocks. Investors also remained cautious
ahead of the outcome of US Federal Reserve's rate announcement and guidance on
future rate hikes due later in the day. After a positive beginning, key gauges
failed to hold on to the gains and traded dull for whole day, as traders got
anxious with a private report stated that market borrowing cost for the states
remained high with the average yield hitting 7.83 per cent at the auctions held
on Tuesday, which is a paltry 1 basis points lower than the last auction of
state securities. Some concern also came with latest data released by the
Centre for Monitoring Indian Economy (CMIE) that after the unemployment rate
fell to a four year low in September, it rose to a four month high of 7.77 per
cent in October. Sentiments remained weak in late afternoon deals, amid a
private report stating that India's fast-depleting foreign exchange reserves
are likely to drop more than was predicted just a month ago by end-2022 as the
Reserve Bank of India will continue to shield the rupee from the dollar's
strength. However, losses remain capped as some support came with provisional
data available on the NSE showed that foreign institutional investors (FIIs)
have net bought shares worth Rs 2,609.94 crore on November 1, 2022. Meanwhile,
Finance Minister Nirmala Sitharaman said India will press for collective
efforts to deal with the spillovers of happenings in advanced economies as well
as global regulation of crypto assets to check terror funding under its G20
presidency. She outlined eight priority areas, including reforms in
multilateral institutions and food and energy security, for discussion under
its G20 presidency which will begin from December 1. Finally, the BSE Sensex
fell 215.26 points or 0.35% to 60,906.09 and the CNX Nifty was down by 62.55
points or 0.34% to 18,082.85.
The US markets ended sharply
lower on Wednesday as traders reacted to the Federal Reserve's monetary policy
announcement and subsequent comments by Fed Chair Jerome Powell. The Fed
announced its widely expected decision to raise interest rates by another 75
basis points. Citing efforts to achieve maximum employment and inflation at the
rate of 2 percent over the longer run, the Fed announced its decision to raise
the target range for the federal funds rate to 3.75 to 4 percent. The Fed also
said that ongoing increases in rates will be appropriate in order to attain a stance
of monetary policy that is sufficiently restrictive to return inflation to 2
percent over time. The central bank noted that future rate hikes will take into
account the cumulative tightening of monetary policy, the lags with which
monetary policy affects economic activity and inflation, and economic and
financial developments. The change in the language from the Fed comes following
recent reports some officials are becoming increasingly uneasy about the pace
of interest rate increases and the impact on the economy. Besides, comments
from Fed Chair Jerome Powell tamped down optimism about the outlook for
interest rates. Powell said it is very premature to be thinking about pausing.
People when they hear lags think about a pause. He added It is very premature,
in my view, to think about or be talking about pausing our rate hikes. We have
a ways to go. On the sectoral front, significant weakness emerged among steel
stocks, as reflected by the 4.8 percent plunge by the NYSE Arca Steel Index.
Retail stocks also saw considerable weakness on the day, dragging the Dow Jones
U.S. Retail Index down by 3.3 percent.
Crude oil futures ended higher on
Wednesday, magnifying their previous session's rally, after data showed declines
in crude and gasoline stockpiles in the US in the week ended October 28th. Data
released by the Energy Information Administration (EIA) showed crude oil
inventories in the US fell by about 3.1 million barrels last week. The EIA data
also said gasoline inventories dropped by 1.257 million barrels last week, as
against expectations for a draw of 1.358 million barrels. Meanwhile, distillate
stockpiles rose by 0.427 million barrels last week, as against forecasts for a
draw of 0.56 million barrels. Benchmark crude oil futures for December delivery
rose $1.63 or about 1.8 percent at $90.00 a barrel on the New York Mercantile
Exchange. Brent crude for January delivery surged $1.40 or about 1.5 percent to
settle at $96.05 (Provisional) a barrel on London's Intercontinental Exchange.
Indian rupee tumbled against
dollar on Wednesday, on account of sustained dollar demand from importers and
banks. Investors maintained cautious approach as a private report stated that
market borrowing cost for the states remained high with the average yield
hitting 7.83 per cent at the auctions held on Tuesday, which is a paltry 1
basis points lower than the last auction of state securities. Besides, another
private report stated that India's fast-depleting foreign exchange reserves are
likely to drop more than was predicted just a month ago by end-2022 as the
Reserve Bank of India will continue to shield the rupee from the dollar's
strength. On the global front, Sterling edged up against the dollar on
Wednesday as markets braced for policy decisions from the U.S. Federal Reserve
and Bank of England on benchmark interest rates aimed at curbing soaring
inflation. Finally, the rupee ended at 82.78 (Provisional), weaker by 19 paisa
from its previous close of 82.59 on Tuesday.
The FIIs as per Wednesday's data
were net buyers in equity segment, while net sellers in debt segment. In equity
segment, the gross buying was of Rs 12736.80 crore against gross selling of Rs 6543.59
crore, while in the debt segment, the gross purchase was of Rs 168.74 crore
against gross selling of Rs 260.97 crore. Besides, in the hybrid segment, the
gross buying was of Rs 4.01 crore against gross selling of Rs 12.83 crore.
The US markets ended deeply in
red on Wednesday after Federal Reserve Chair Jerome Powell said inflation was
still too high and indicated that the central bank has more rate hiking ahead.
The Fed implemented another 0.75 percentage point rate increase, and Powell
said that its inflation fight was far from done. Asian markets were trading in
red on Thursday after the US Federal Reserve laid the groundwork for a
protracted tightening campaign that torpedoed market hopes for a pause, sank
bonds and lifted the dollar. Indian equity benchmarks halted 4-day gaining
streak on Wednesday ahead of Fed outcome. Today, markets are likely to make
gap-down opening tracking weak global cues after the Fed announced a
75-basis-point hike in benchmark interest rates. Traders will be eyeing on
Services PMI data for October and RBI Monetary Policy Committee meeting.
Monetary Policy Committee meeting today to discuss failure to curb inflation.
There may be some cautiousness as Shanaka Jayanath Peiris, Division Chief of
Regional Studies Division, Asia Pacific Department at the IMF, said the Asia
Pacific region is facing three main risks, including due to global financial
tightening and a slowdown in China. Peiris also said that currencies in the region
have depreciated sharply while public debt ratios have increased. However, some
support may come later in the day as Saket Dalmia, president, PHD Chamber of
Commerce and Industry, said the wholesale price index (WPI) inflation has
softened to 10.7 per cent in September 2022 from its peak of 16.2 per cent in
June 2022. Dalmia said deceleration in the WPI inflation will continue and it
will have a significant impact on the price corrections in the retail
inflation; CPI inflation is expected to soften below 6 per cent by December
2022. Traders may get some support as Prime Minister Narendra Modi said his
government has rolled out the red carpet for investors, instead of pushing them
into the web of red tape. He added building a new India is possible only with
bold reforms, big infrastructure, and best talent. The government's proactive
steps have led to a situation where India has been hailed as a bright spot amid
the current global turmoil by experts and agencies. Traders may take note of
report that Governor Shaktikanta has Das said the Reserve Bank of India wishes
to concentrate on inflation in the same way as Arjuna focussed on hitting the
eye of a revolving fish in the epic Mahabharata. The remarks come at a time
when inflation is ruling high and RBI will soon be explaining to the government
about the reasons for overshooting the inflation target for nine consecutive
months. There will be some buzz in aviation stocks as Civil Aviation Minister
Jyotiraditya Scindia said the country's civil aviation sector is likely to log
around 400 million passengers over the next 7 to 10 years. There may be some
reaction on fertilisers stocks as the government approved a subsidy of Rs
51,875 crore for phosphatic and potassic (P&K) fertilisers for second half
of 2022-23 as part of efforts to provide affordable soil nutrients to farmers.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
18,082.85
|
18,028.09
|
18,158.19
|
BSE
Sensex
|
60,906.09
|
60,730.43
|
61,145.69
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
423.36
|
101.15
|
100.30
|
102.50
|
NTPC
|
221.46
|
181.20
|
179.90
|
182.60
|
Oil & Natural Gas Corporation
|
211.17
|
136.50
|
134.84
|
138.69
|
ITC
|
167.81
|
354.00
|
349.59
|
357.34
|
Coal India
|
149.74
|
245.85
|
242.14
|
249.59
|
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Bharti Airtel has crossed the 1 million unique 5G user mark on its network.
Infosys and Microsoft have completed the migration of Spark's corporate functions to Microsoft Dynamics 365.
Grasim Industries has received approval to raise funds not exceeding Rs 1,000 crore through issue of NCDs on private placement basis in one or more tranches.