Indian equity benchmarks closed
higher for the third straight day on Tuesday on gains in market heavyweights
Sun Pharma, Titan Company and ITC. Indian bourses started the day on a positive
note as traders took support with report that rains forecast for swathes of
India this month should limit the damage to crops after a delayed monsoon and
parched August, leaving the world's most populous nation with sufficient
supplies. Traders were also getting some encouragement on report that India is
on the path to become a solid global player due to robust financial
regulations. India was in a sweet spot to grow robustly, despite global turmoil
and monsoon risks to growth, and to do so, developing credit markets was
essential. However, key gauges trimmed some of their gains in afternoon session
amid a bearish trend in global equities. Some concern also came as India's
services sector growth eased in the month of August, but remained among the
best in 13 years, with a series-record increase in new export business inducing
another sharp expansion in total sales.
As per the survey report, the seasonally adjusted S&P Global India
Services PMI Business Activity Index fell at 60.1 in August from 62.3 in July.
Further, the S&P Global India Composite PMI Output Index -- which measures
both manufacturing and services -- eased to 60.9 in August as against 61.9 in
July. However, markets regained traction in final hour of trade and settled
higher. Finally, the BSE Sensex rose 152.12 points or 0.23% to 65,780.26 and
the CNX Nifty was up by 46.10 points or 0.24% to 19,574.90.
The US markets ended lower on
Tuesday. Concerns about the outlook for global economy following the release of
disappointing Chinese and European data weighed on the market. Chinese services
activity expanded at the slowest pace in eight months in August, a
private-sector survey showed. Business activity in the euro zone weakened
further in August as the economic downturn extended from manufacturing to the
services sector. HCOB's final Composite Purchasing Managers' Index (PMI),
compiled by S&P Global, dropped to 46.7 in August from July's 48.6, marking
the lowest level since November 2020. Besides, a firm dollar and higher
Treasury yields hurt as well. On the economic data front, the Commerce
Department released a report showing a significant pullback in factory orders
in the month of July. The Commerce Department said factory orders tumbled by
2.1 percent in July after surging by 2.3 percent in June. Street had expected
factory orders to plunge by 2.6 percent. The Institute for Supply Management is
scheduled to release its report on U.S. service sector activity in the month of
August on Wednesday. The ISM's services PMI is expected to edge down to 52.4 in
August from 52.7 in July, although a reading above 50 would still indicate
growth in the sector. on the sectoral front, the Energy sector saw some brisk
buying as oil prices climbed higher after Russia and Saudi Arabia decided to
extend their voluntary production cuts to the end of this year.
Crude oil futures ended sharply
higher on Tuesday, magnifying recent session's gains, as Saudi Arabia said that
it will extend its 1 million barrel per day voluntary oil production cut until
the end of 2023. The kingdom, which first applied the 1 million bpd reduction
in July, has been extending it on a monthly basis. This 1-million cut is in addition
to the reduction of 1.66 million barrels per day of other voluntary output
declines that some members of OPEC have put in place until the end of the year.
Both Russia and Saudi have stated that they would review the supply cuts on a
monthly basis, and modify them depending on market conditions. Benchmark crude
oil futures for October delivery rose $1.14 or 1.3 percent to settle at $86.69
a barrel on the New York Mercantile Exchange. Brent crude for November delivery
surged $1.04 or 1.2 percent to settle at $90.04 a barrel on London's Intercontinental
Exchange.
Indian rupee weakened
considerably against dollar on Tuesday amid a strong American currency and
higher crude oil prices. Foreign fund outflows from the domestic equity markets
also weakened the local currency. Traders were worried as India's services
purchasing managers' index (PMI) fell to 60.1 in August from 62.3 recorded in
July. On the global front, the dollar was firm on Tuesday and the Aussie under
a little pressure as traders watched out for the Reserve Bank of Australia's
interest rate decision with bets that rates may have peaked. Besides, a
deteriorating global growth picture sent the pound low against the dollar on
Tuesday after a survey showed business activity in Britain contracted last
month. Finally, the rupee ended at 83.06 (Provisional), weaker by 35 paise from
its previous close of 82.71 on Monday.
The FIIs as per Tuesday's data
were net sellers in both equity and debt segments. In equity segment, the gross
buying was of Rs 8237.22 crore against gross selling of Rs 10612.86 crore,
while in the debt segment, the gross purchase was of Rs 207.11 crore with gross
sales of Rs 233.75 crore. Besides, in the hybrid segment, the gross buying was of
Rs 52.73 crore against gross selling of Rs 53.35 crore.
The US markets ended lower on
Tuesday as Treasury yields rose along with oil prices and investors assessed
prospects for the Federal Reserve's interest rate path. Asian markets are
trading mostly in red on Wednesday after Saudi Arabia and Russia extended
voluntary oil production cuts to the end of the year. Indian markets ended
higher for the third consecutive session on Tuesday with healthy buying in
FMCG, IT, pharma, realty, metals, and oil and gas stocks. Today, domestic
equity indices are likely to get flat-to-positive start amid weakness in global
markets. Some support will come as Union Finance Minister Nirmala Sitharaman
said there has been a threefold increase in income tax filing in each bracket,
an indication of significant improvement in the formalisation of the economy.
She said each tax bracket, that is, the tax slabs, has seen a minimum threefold
increase in tax filing. Some even achieved a nearly fourfold surge. More
optimism will come as the RBI Deputy Governor said India was in a sweet spot to
grow robustly, despite global turmoil and monsoon risks to growth, and to do
so, developing credit markets was essential. Traders may take note of RBI
Governor Shaktikanta Das' statement that the Reserve Bank of India (RBI) is
determined to bringing down inflation to 4 per cent and will remain watchful of
risks as more frequent global supply shocks can have profound implications on
the management of the price situation. However, some cautiousness may come as
S&P Global Ratings Economist (Asia Pacific) Vishrut Rana said inflation in
India is likely to remain elevated in the near terms but government policies
will prevent it from rising further. In July, the consumer price index based
retail inflation spiked to 15-month high of 7.44 per cent in July, with
specific food commodities mainly driving the increase. Also, foreign fund
outflows may dent domestic sentiments. Provisional data from the National Stock
Exchange (NSE) showed foreign institutional investors (FII) sold shares worth
Rs 1,725.11 crore on September 5. There will be some buzz in shipping sector
stocks as the union government is looking to make India as the refuelling hub
of green hydrogen, ammonia and methanol for the shipping sector. The union
minister for power, new and renewable energy R K Singh said India will provide
these green fuels at the cheapest rates. Banking stocks will be in focus with
RBI Governor Shaktikanta Das' statement that our banking system remains
resilient and healthy with improved capital ratios, asset quality and
profitability.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
19,574.90
|
19,538.09
|
19,599.39
|
BSE
Sensex
|
65,780.26
|
65,643.92
|
65,874.15
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Jio Financial Services
|
471.27
|
255.30
|
252.20
|
259.20
|
Tata Steel
|
364.67
|
131.75
|
129.59
|
133.19
|
Coal India
|
196.54
|
255.40
|
249.96
|
258.36
|
HDFC Bank
|
193.56
|
1575.00
|
1567.60
|
1585.40
|
ICICI Bank
|
166.23
|
969.50
|
964.50
|
972.25
|
Hero MotoCorp has received approval for investment of up to Rs 550 crore, in the Rights issue of Ather Energy.
Hindalco Industries and Ayana Renewable Power have entered into Power Purchase agreement for the supply of 100 MW of Round-the-Clock renewable energy to Hindalco's smelter plants in Odisha.
Tata Consultancy Services has been selected as a strategic partner by Lantmannen Ekonomisk Forening, a leader in agriculture, machinery, bioenergy and food products.
Cipla's 100% owned subsidiary -- Cipla South Africa has signed a binding term sheet with Actor Holdings (Pty) to acquire 100% of the issued ordinary shares of Actor Pharma (Pty).