Indian equity benchmarks ended
lower in highly volatile trade on Tuesday due to selling pressure in metal,
utilities, power and realty stocks. The markets opened on a negative note amid
weak global cues and remained volatile through the day, oscillating between
gains and losses. Traders were concerned with a private report that Indian
retail inflation likely surged to an 18-month high in April, largely driven by
rising fuel and food prices and staying well above the Reserve Bank of India's
upper tolerance limit for a fourth consecutive month. There was some
cautiousness as Meghalaya Governor Satya Pal Malik said increasing inflation
and unemployment are going to create a situation of crisis in the country but
no leader is ready to speak on the issues. However, key gauges managed to trade
in green terrain in afternoon deals, taking support from Union Finance Minister
Nirmala Sitharaman's statement that with licence quota raj prevailing during
the 70 years of Congress regime, the policy change brought in by the central
government under Prime Minister Narendra Modi has created new opportunities for
the private sector by allowing them to manufacture products that were normally
made by public sector units (PSUs). Some support also came with private report
stated that improving business sentiment has boosted the overall hiring demand
which witnessed a 15 per cent year-on-year growth in April, led by banking,
financial services and insurance sector as well as recovery in the retail
sector. However, benchmarks failed to hold on to the green in volatile trade,
as traders are concerned that central banks of key developed economies could
resort to more rate hikes going ahead to temper rising inflation, which could
hurt growth and trigger more foreign fund outflows from emerging markets,
including India. Finally, the BSE Sensex fell 105.82 points or 0.19% to
54,364.85 and the CNX Nifty was down by 61.80 points or 0.38% to 16,240.05.
The US markets ended mostly
higher on Tuesday, after moving sharply lower over the three previous sessions.
Bargain hunting contributed to early strength on markets, as some traders
looked to pick up stocks at reduced levels. However, traders remained wary
about inflation, higher interest rates and the outlook for the global economy.
Stocks continued to fluctuate over the course of the session as traders looked
ahead to the release of key inflation data in the coming days. The Labor
Department is due to release its report on consumer price inflation on
Wednesday, with the annual rate of price growth expected to slow to 8.1 percent
in April from 8.5 percent in March. The latest snapshot of inflation could
impact expectations regarding how aggressively the Federal Reserve plans to
raise interest rates. On the sectoral front, biotechnology stocks showed a
substantial rebound following recent weakness, with the NYSE Arca Biotechnology
Index surging by 3.3 percent after ending the previous session at its lowest
closing level in over two years. Bargain hunting also contributed to a
bounceback by semiconductor stocks, resulting in a 2.5 percent jump by the
Philadelphia Semiconductor Index. The index also ended Monday's trading at a
two-year closing low. Meanwhile, tobacco stocks showed a significant move to
the downside on the day, dragging the NYSE Arca Tobacco Index down by 3.5
percent to its lowest closing level in well over a year.
Crude oil futures ended lower on
Tuesday, magnifying their previous session' losses, on concerns over a likely
drop in energy demand due to slowing global economic growth. Oil prices were weighed down by concerns over
demand from China due to the ongoing lockdowns in the country, and on Saudi
Arabia's decision to cut oil prices. Further, a stronger dollar weighed as well
on oil prices. Benchmark crude oil futures for June delivery fell $3.33 or 3.2%
percent to settle at $99.76 a barrel on the New York Mercantile Exchange. Brent
crude for July delivery drooped $3.14 or 2.98 percent to settle at $102.80
(Provisional) a barrel on London's Intercontinental Exchange.
Erasing previous session
drubbing, Indian rupee ended stronger against dollar on Tuesday, a day after
melting to its all-time low of 77.44. Traders got some support with private
report stating that the Confederation of British Industry (CBI), Britain's
largest business organisation, and its Indian counterpart, the Confederation of
Indian Industry (CII), have agreed to set up a new joint commission to increase
cross-industry collaboration and to push the trade deal over the line. However,
weak domestic equities and persistent foreign fund outflows restricted the
gains. On the global front, pound was little changed on Tuesday, pausing after
a slide to its lowest levels in nearly two years on signs that a weakening
economy will force the Bank of England to slow its interest-rate hiking cycle. Finally,
the rupee ended at 77.34 (Provisional), stronger by 10 paise from its previous
close of 77.44 on Monday.
The FIIs as per Tuesday's data
were net sellers in equity segment, while they were net buyers in debt segment.
In equity segment, the gross buying was of Rs 5377.39 crore against gross
selling of Rs 8268.71 crore, while in the debt segment, the gross purchase was
of Rs 413.05 crore with gross sales of Rs 139.63 crore. Besides, in the hybrid
segment, the gross buying was of Rs 2.85 crore against gross selling of Rs 8.33
crore.
The US markets ended mostly
higher on Tuesday with big growth shares rising after the previous day's
selloff as Treasury yields tumbled. Asian markets are trading mixed on
Wednesday as investors globally await a key US inflation reading to assess the
course of monetary policy action going forward. Indian markets ended a volatile
session in the red on Tuesday dragged by oil & gas, metal and IT shares
though gains in select financial and FMCG names limited the downside. Today,
markets are likely to make cautious start amid concerns of a global economic
slowdown. Traders will be concerned as data released by the RBI showed that
India's outward foreign direct investment (OFDI) nearly halved to $3.39 billion
in April on an annual basis. The OFDI stood at $6.71 billion in April 2021. On
sequential basis too, the outward investment from India in April was lower
compared to USD 3.44 billion in March 2022. There will be some cautiousness
with a private report that the goods and services tax (GST) council is mulling
a 28 per cent tax on crypto currencies, at par with the current GST on casinos,
betting and lottery. Traders may take note of a report that Commerce and
industry ministers of India and Oman will hold a meeting on May 11, 2022 to
discuss ways to further boost economic ties between the two countries. The
bilateral trade between the two countries has risen by 82 per cent to $9.94
billion in 2021-22. Meanwhile, Finance Minister Nirmala Sitharaman has asked
states to build infrastructure and do energy planning thereby ensuring
uninterrupted, quality supply of power is made available to industries at
reasonable rates, enabling them to grow their businesses. Oil & gas
industry stocks will be in focus with report that India's fuel consumption
moderated and slipped 4% in April from the previous month, as elevated domestic
prices slowed activity in the world's third biggest oil consumer. There will be
some reaction in edible oil industry stocks with report that India's edible oil
imports are set to fall for the third year in a row on a rise in local oilseed
supplies and as a rally in vegetable oil prices to a record high dented demand.
Insurance industry stocks will be in limelight with a private report that the
life insurance business this fiscal will face some pressure owing to a
combination of factors like reversing interest rate cycle, volatility in the
stock markets, high inflation and the return of postponed discretionary
consumption hitting the middle class savings. There will be some earnings
announcements too to keep the markets buzzing. In the primary market, logistics
services giant Delhivery's Rs 5,235 crore IPO will open for subscription today.
Stainless steel pipes and tubes manufacturer Venus Pipes & Tubes' IPO will also
open for subscription today and close on Friday.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
16,240.05
|
16,156.71
|
16,363.96
|
BSE
Sensex
|
54,364.85
|
54,108.44
|
54,739.13
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Power Grid Corporation of India
|
232.48
|
242.60
|
240.61
|
246.46
|
Oil & Natural Gas Corporation
|
226.02
|
153.15
|
150.15
|
158.90
|
NTPC
|
203.22
|
155.10
|
152.65
|
159.40
|
Coal India
|
199.65
|
169.25
|
164.09
|
179.14
|
ITC
|
180.33
|
259.50
|
256.80
|
264.50
|
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