Indian equity
benchmarks snapped a two-day winning run and ended over half percent lower on
Tuesday amid cautious gains across most global markets. Investor focus returned
to the Russia-Ukraine war and rising oil prices. Markets made a cautious start
and soon slipped into red as traders got anxious with the Ministry of Commerce
and Industry in its latest data has stated that India's trade deficit rose 87.5
per cent to $192.41 billion in 2021-22 as against $102.63 billion in the
previous year. The trade deficit in March 2022 was $18.69 billion. It showed
that while total exports during last fiscal year increased to a record high of
$417.81 billion, imports too soared to $610.22 billion, leaving a trade gap of
$192.41 billion. Some concern also came as a private report stated that petrol
and diesel prices have been hiked by 80 paise a litre each on April 05, taking
the total increase in the last two weeks to Rs 9.20 per litre. However, markets
erased all the losses and were trading marginally higher in afternoon deals, as
traders took some support with Finance Minister Nirmala Sitaraman's statement
that Foreign Direct Investment (FDI) staying in the country and creating jobs
and prospects, and not the outflow of Foreign Institute Investors (FIIs) and
Foreign Portfolio Investors (FPIs), should be assessed to measure robustness of
the Indian economy. Some support also came with a report that the government is
committed to supplying fertilisers at affordable prices to farmers with
required subsidies despite rising international market rates due to the
Russia-Ukraine conflict, huge procurements by China and other global factors,
which may push the annual fertiliser subsidy to up to Rs 2 lakh crore in the
current financial year. But, buying proved short-lived as markets once again
fell into negative terrain in late afternoon deals, as some pessimism remained
among traders with a private report stating that Indian manufacturers are
running out of capacity to absorb rising input costs, with an increasing number
passing it along to consumers in an economy already grappling with Asia's third-fastest
inflation and an uneven recovery. Finally, the BSE Sensex fell 435.24 points or
0.72% to 60,176.50 and the CNX Nifty was down by 96.00 points or 0.53% to
17,957.40.
The US markets ended lower on
Tuesday as Federal Reserve Governor Lael Brainard indicated the central bank
could take a more aggressive approach to its tightening policy. Brainard
described inflation as much too high and predicted the Fed would start reducing
its balance sheet at a rapid pace as soon as the May meeting. She added the
reduction in the balance sheet will contribute to monetary policy tightening
over and above the expected increases in the policy rate reflected in market
pricing and the Committee's Summary of Economic Projections. On the sectoral
front, Semiconductor stocks pulled back sharply after turning in a strong
performance in the previous session, resulting in a 4.5 percent nosedive by the
Philadelphia Semiconductor Index. On the economic data front, after reporting a
slowdown in the pace of growth in US service sector activity over the past few
months, the Institute for Supply Management (ISM) released a report showing
growth in the sector reaccelerated in the month of March. The ISM said its
services PMI rose to 58.3 in March from 56.5 in February, with a reading above
50 indicating growth in the sector. Street had expected the index to rebound to
58.0. Meanwhile, a report released by the Commerce Department showed the US
trade deficit was nearly unchanged in February, as imports and exports both
increased. The Commerce Department said the trade deficit narrowed by less than
$0.1 billion to $89.2 billion in February. Street had expected the deficit to
narrow to $88.5 billion from the $89.7 billion originally reported for the
previous month.
Crude oil futures ended lower on
Tuesday on concerns about the outlook for energy demand due to a surge in
coronavirus cases in China. According to private report, lockdown has been
extended in Shanghai, where asymptomatic coronavirus cases rose by a record
13,086 on Monday, up from 8,581 cases a day earlier. Meanwhile, Traders looked
ahead to weekly inventory reports from US Energy Information Administration
(EIA), due on Wednesday. Benchmark crude oil futures for May delivery fell
$1.32 or 1.3 percent to settle at $101.96 a barrel on the New York Mercantile
Exchange. Brent crude for June delivery dropped $1.59 or 1.48 percent to settle
at $105.94 a barrel on London's Intercontinental Exchange.
Continuing previous session
gains, Indian rupee ended substantially stronger on fresh selling of American
currency by banks and exporters. Investors took support with Finance Minister
Nirmala Sitaraman's statement that Foreign Direct Investment (FDI) staying in
the country and creating jobs and prospects, and not the outflow of Foreign Institute
Investors (FIIs) and Foreign Portfolio Investors (FPIs), should be assessed to
measure robustness of the Indian economy. She added that India continues to
remain the highest receiver of the FDI. On the global front, sterling
strengthened marginally against the euro on Tuesday, clinging to gains made on
Monday while pulling away from a three-month low hit last week. Finally, the
rupee ended at 75.29 (Provisional), stronger by 24 paise from its previous
close of 75.53 on Monday.
The FIIs as per Tuesday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 7821.67 crore against gross selling of Rs 6371.01 crore, while
in the debt segment, the gross purchase was of Rs 1180.44 crore against gross
sales of Rs 833.98 crore. Besides, in the hybrid segment, the gross buying was
of Rs 4.56 crore against gross selling of Rs 8.00 crore.
The US markets ended lower on
Tuesday as investors faced up to the possibility of aggressive monetary
tightening by the U.S. Federal Reserve to fight inflation. Asian markets are
trading in red on Wednesday following weakness over Wall Street overnight.
Indian markets put an end to a two-day winning run on Tuesday, retreating from
11-week peaks scaled in the previous session, amid weakness across financial
stocks as HDFC Bank and HDFC took a breather. Today, markets are likely to make
gap-down opening tracking losses in global peers. Continuous rise in petrol and
diesel prices likely weighed down on the market sentiments. Oil companies
increased the price of petrol and diesel in Delhi by 80 paise each, marking the
14th such hike in two weeks. Petrol costs Rs 105.41 and diesel Rs 96.67 per
litre after the hike. There will be some cautiousness with a private report
that the Reserve Bank of India will delay its first interest rate rise by at
least four months to August at the earliest, as the central bank must now start
worrying about inflation. However, some respite may come later in the day as
Asian Development Bank projected a seven per cent collective growth for South
Asian economies in 2022 with the subregion's largest economy India growing by
7.5 per cent in the current fiscal year before picking up to eight per cent the
next year. Traders may take note of report that India and the EU are set to
soon expedite formal negotiations for a free trade agreement (FTA), with
commerce secretary BVR Subrahmanyam visiting Brussels this week to set the
stage for the talks. Besides, the government has extended the timeline for
disbursement of loan for ethanol projects under different schemes till
September 30 this year, as part of its efforts to boost domestic production and
achieve ethanol blending of 20 per cent by 2025. There will be some buzz in
banking stocks as rating agency Icra Ratings said the outlook for banks is
expected to be stable amid improvement in credit growth of 8.9-10.2 per cent and
decline in provisions in the current fiscal. Auto industry stocks will be in
focus as automobile dealers' body FADA said domestic passenger vehicle retail
sales in March declined by 4.87 per cent to 2,71,358 units, as compared to the
same month last year. There will be some reaction in real estate industry
stocks with a private report stating that the residential housing industry
showed robust growth in January-March 2022 as demand rose 4.6 per cent
quarter-on-quarter (QoQ) across 13 Indian cities. Aviation industry stocks will
be in limelight as the government has started discussions with airlines on the
removal of price bands for passenger fares.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,957.40
|
17,887.49
|
18,061.39
|
BSE
Sensex
|
60,176.50
|
59,900.43
|
60,619.32
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
285.30
|
457.30
|
449.76
|
463.36
|
ITC
|
271.83
|
259.00
|
255.45
|
262.20
|
NTPC
|
239.58
|
148.40
|
145.24
|
151.09
|
Adani Ports and Special Economic Zone
|
210.90
|
844.05
|
826.40
|
861.30
|
Oil & Natural Gas Corporation
|
200.54
|
171.35
|
169.51
|
172.96
|
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