Indian equity benchmarks ended at record
highs on Thursday after showing lacklustre trend in the previous two sessions,
as firm global cues, a consistent fall in daily Covid-19 cases, and a stronger
rupee kept market mood upbeat. The benchmarks staged a gap up opening, as
traders took support with Minister of State for Finance Anurag Thakur's
statement that Indian economy is resilient and will rebound in the times ahead
based on consistent reforms that have ensured strong fundamentals through these
difficult times. Thakur has pointed out that consistent reforms and strong
fundamentals have ensured that India had a swift rebound from a contraction of
24.4 percent in the first quarter to a growth of 1.6 percent in the fourth
quarter of FY 2020-21. Benchmarks cut some of their gains during afternoon
session after the survey report indicated that India's service sector fell into
contraction territory in the month of May, with the intensification of the COVID-19
crisis causing renewed declines in new business and output. As per the survey
report, the seasonally adjusted Nikkei Services Business Activity Index fell to
46.4 in May from 54.0 in April. Further, the Nikkei India Composite PMI Output
Index -- which measures both manufacturing and services - also eased to 48.1 in
May from 55.4 in April.
However, key gauges regained traction, taking support
from Credit ratings agency Crisil in its latest report stated that the expanded
Emergency Credit Line Guarantee Scheme (ECLGS) will help businesses like
hotels, civil aviation and tour operators, which are the hardest hit by the
second wave of COVID-19. It will also support build-up of healthcare
infrastructure, mainly oxygen availability, in tier-2 and beyond cities and the
hinterland. Traders took a note of Assocham's report in which it has
recommended the government to extend relief measures such as regulatory easing,
wage support, and interest subsidy for the Micro Small and Medium Enterprises
(MSMEs) which are reeling under the severe impact of COVID-19. As the states are in the process of easing
lockdowns, it said the trade and industry would need all-around support to pick
up their business thread again. Investors also eyed the Reserve Bank of India's
meeting on Friday where it is expected to keep its key rate at a record low but
reaffirm its commitment to provide adequate liquidity as the country grapples
with a deadly second wave of the COVID-19 pandemic. Finally, the BSE Sensex
rose 382.95 points or 0.74% to 52,232.43, while the CNX Nifty was up by 114.15
points or 0.73% to 15,690.35.
The US markets ended lower
on Thursday as a batch of upbeat jobs data led to renewed concerns about the
outlook for monetary policy. Payroll processor ADP released a report showing
private sector employment in the US spiked by much more than expected in the
month of May. ADP said private sector employment soared by 978,000 jobs in May
after surging by a downwardly revised 654,000 jobs in April. Street had
expected private sector employment to increase by 650,000 jobs compared to the
addition of 742,000 jobs originally reported for the previous month. Meanwhile,
a separate report from the Labor Department showed a modest decrease in
first-time claims for US unemployment benefits in the week ended May 29th. The
report said initial jobless claims dipped to 385,000, a decrease of 20,000 from
the previous week's revised level of 405,000. Street had expected jobless
claims to edge down to 395,000 from the 406,000 originally reported for the
previous week. On the sector front, significant weakness was visible among
airline stocks, as reflected by the 3.3 percent nosedive by the NYSE Arca
Airline Index. Housing, semiconductor and steel stocks also saw considerable
weakness on the day, while networking stocks bucked the downtrend.
Crude oil futures ended
marginally lower on Thursday after two straight days of strong gains, amid
traders reacted to inventory data and weighed energy demand prospects. The
Energy Information Administration reported that US crude inventories fell by
5.1 million barrels for the week ended May 28. The data showed gasoline inventories
increased by 1.5 million barrels last week, while distillate stockpiles went up
by 3.7 million barrels. As per data released by the American Petroleum
Institute, US crude oil stocks fell by 5.36 million barrels in the week ended
May 28th compared to a drop of 0.439 million in the previous week and much
higher than the market expectations of a 2.114 million barrels. Crude oil
futures for July lost 2 cents or 0.03 percent to settle at $68.81 barrel on the
New York Mercantile Exchange. August Brent crude fell 4 cents or 0.06 percent
to settle at 71.31 a barrel on London's Intercontinental Exchange.
Indian rupee ended stronger against dollar on Thursday due to fresh
selling of the American currency by banks and exporters. The rupee also derived
its strength from strong gains in the local equity markets. Sentiments got
boost as India's COVID cases are beginning to decline and several states are
announcing a gradual easing of restrictions. Some support also came in as
Minister of State for Finance Anurag Thakur said the Indian economy is
resilient, and will rebound based on reforms that have ensured strong
fundamentals. Traders seem to have overlooked report that India's services
sector activities slumped into contraction territory for the first time in eight
months, amid renewed decline in new work intakes due to the escalation of the
pandemic and the reintroduction of restrictions. The seasonally adjusted India
Services Business Activity Index fell to 46.4 in May, down from 54.0 in April.
On the global front; dollar rose on Thursday as traders awaited a batch of U.S.
economic data that could set the tone at central bank meetings later this
month. Finally, the rupee ended 72.91, stronger by 18 paise from its
previous close of 73.09 on Wednesday.
The FIIs as per Thursday's data were net buyer in equity segment,
while net seller in debt segment. In equity segment, the gross buying was of Rs
11634.78 crore against gross selling of Rs 10542.34 crore, while in the debt
segment, the gross purchase was of Rs 415.72 crore with gross sales of Rs
758.03 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.25
crore against gross selling of Rs 29.06 crore.
The US markets ended lower
on Thursday on wary about the Federal Reserve potentially shifting monetary
policy. Asian markets are trading lower in early deals on Friday following the
negative cues overnight from Wall Street as signs of a strengthening US
recovery boosted bets for higher inflation and an earlier tapering of Federal
Reserve stimulus. Indian equity markets ended with strong gains on Thursday as
fall in daily coronavirus cases. Today, the markets are likely to make
pessimistic start following negative cues from global markets. Traders will be
eyeing the RBI's monetary policy outcome that will be announced today. The
Reserve Bank of India's Monetary Policy Committee began its bi-monthly
deliberations on June 2, amid expectations of keeping a status quo on repo and
reverse repo rates due to uncertainty over the impact of the second COVID-19
wave. However, some support may come later in the day as union Minister Anurag
Singh Thakur said financial inclusion is a top priority for the government and
that promoting financial education would help in realising the collective
potential. Traders may also get some encouragement with Commerce Secretary Anup
Wadhawan's statement the time frame to resume negotiations for the stalled free
trade agreement with the European Union (EU) and to initiate fresh talks for a
pact with the UK will be very early and the talks will start soon after
completion of the preparatory work. He expressed hope that within this year, or
close to the end of the year, the negotiations with both the regions should
start. Meanwhile, Chief Economic Advisor KV Subramanian said that the second
wave of COVID-19 has affected the momentum of economic recovery. However, he
also pointed that he expects a recovery in the economy from July onwards. There
will be some buzz in banking industry stocks as public sector banks have been
at the forefront for advancing loans under the PM Street Vendors Atmanirbhar
Nidhi (PM SVANidhi), and have sanctioned 2.316 million loans, about 95% of
total loans sanctioned under this scheme as on May 31. Aviation stocks will be
in focus as Domestic air traffic nosedived to 19.20 lakh passengers in May from
around 57.3 lakh in April, registering a sharp 65-67 per cent month-on-month
contraction on account of the second wave of the pandemic. With such a sharp
fall, the domestic passenger traffic reached lower than the June-July 2020
levels.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
15,690.35
|
15,632.53
|
15,726.63
|
BSE Sensex
|
52,232.43
|
52,025.34
|
52,356.37
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Oil & Natural Gas Corporation
|
642.41
|
122.50
|
119.36
|
124.71
|
ITC
|
466.57
|
209.05
|
208.25
|
210.30
|
State Bank of India
|
389.09
|
439.65
|
434.78
|
443.23
|
Adani Ports And Special Economic Zone
|
241.05
|
825.30
|
807.66
|
845.96
|
Tata Motors
|
214.08
|
325.65
|
323.63
|
327.68
|
Wipro has sold its entire stake in Denim Group for a consideration of $22.42 million (about Rs 160 crore). Consequent to the sale, Wipro does not hold any stake in Denim Group.
Reliance Industries' telecom arm -- Jio is accelerating the rollout of digital platforms and indigenously-developed next-generation 5G stack.
ICICI Bank has tied up with SWIFT to offer a facility that helps overseas partner banks to send instant remittances on behalf of their customers to the beneficiary in India.
HDFC Bank has declared the availability of Mobile Automated Teller Machines in 50 cities across India to assist customers during the lockdown.