Indian equity benchmarks ended
Friday's session near intraday lows, with Sensex and Nifty breaching their
crucial 54,350 and 16,250 levels, respectively, following weakness in global
counterparts and fear of faster policy tightening to combat inflation. The
bourses started the session in red and remained under pressure for whole day,
as investors got cautious with External Affairs Minister S Jaishankar stating
that the Russia-Ukraine war has thrown up a crisis of fuel, food and fertiliser
that will lead to hunger situations and have a very significant inflationary
impact. Some anxiety spread among investors with India Ratings stated that the
country's current account deficit is likely to hit a three-year high of 1.8 per
cent or $43.81 billion in FY22, as against a surplus of 0.9 per cent or $23.91
billion in FY21. Besides, persistent capital outflows also weighted down on the
domestic sentiments. Foreign Institutional Investors (FII) continued to be net
sellers of domestic equities, pulling out Rs 1,512 crore from stocks on
Thursday. Further, in the last hours of the trade, selling got intensified on
the counters, as domestic sentiments weakened further as the United Nations
said Foreign Direct Investment inflows to India declined $19 billion to $45
billion in 2021 but the country still remained among the top 10 global
economies for FDI last year. Traders also remained cautious as basket of crude
oil that India buys has hit a decade high of $121 per barrel, but retail
selling prices of petrol and diesel continue to remain frozen. The Indian
basket on June 9, 2022 touched $121.28, matching levels seen in February/March
2012. Market participants overlooked Assocham's statement that the Reserve
Bank's decision to raise the benchmark lending rate by 50 basis points to 4.9
per cent will help the Indian economy in the medium term. Finally, the BSE
Sensex fell 1016.84 points or 1.84% to 54,303.44 and the CNX Nifty was down by
276.30 points or 1.68% to 16,201.80.
Extending their previous
session's losses, the US markets settled lower on Friday with sharp cut amid
concerns over consumer price inflation. The Labor Department released a report
showing consumer prices in the U.S. shot up by more than expected in the month
of May, raising concerns about the outlook for interest rates. The Labor
Department said its consumer price index jumped by 1.0 percent in May after
rising by 0.3 percent in April. Street had expected consumer prices to increase
by 0.7 percent. With the bigger than expected monthly increase, the annual rate
of consumer price growth accelerated to 8.6 percent in May from 8.3 percent in
April, showing the biggest surge since December 1981. The annual growth was
expected to be unchanged. Excluding food and energy prices, core consumer
prices climbed by 0.6 percent in May, matching the growth seen in the previous
month. Core prices were expected to rise by 0.5 percent. Meanwhile, the annual
rate of core consumer price growth slowed to 6.0 percent in May from 6.2
percent in April. Street had expected the pace of growth to decelerate to 5.9
percent. The bigger than expected increase in consumer prices is likely to
convince the Federal Reserve to follow through on its plans to aggressively
raise interest rates in an effort to combat inflation. The Fed is scheduled to
announce its latest monetary policy decision next Wednesday, with the central
bank widely expected to raise interest rates by another 50 basis points. Adding
more pessimism on the Street, a separate report released by the University of
Michigan showed consumer sentiment in the U.S. has tumbled to its lowest level
on record in the month of June. The preliminary data showed the consumer
sentiment index plunged to 50.2 in June from 58.4 in May. Street had expected
the index to edge down to 58.0.
Crude oil futures ended lower for
second straight session on Friday on concerns about outlook for oil demand amid
reports that Shanghai has imposed fresh Covid-related restrictions in several
parts due to a surge in new cases. China said it will reimpose Covid-19
lockdowns in eight out of 16 of Shanghai's districts after the country's
largest economic hub recorded a cluster outbreak of COVID-19. Also, stronger
dollar after data showing a steep acceleration in U.S. inflation raised fears
of more aggressive rate hikes by the Federal Reserve weighted on pol prices. Benchmark
crude oil futures for July delivery fell 84 cents or 0.7 percent to settle at
$120.67 a barrel on the New York Mercantile Exchange. Brent crude for August
delivery declined $1.06 or 0.9 percent to settle at $122.01 (Provisional) a
barrel on London's Intercontinental Exchange.
Indian rupee ended substantially
lower against the US dollar on Friday amid sell-off in domestic equities and
stronger greenback overseas weighed on investor sentiment. Persistent foreign
capital outflows, elevated global crude oil prices, and risk-averse sentiments
also impacted the domestic unit. Sentiments were fragile as India Ratings
stated that the country's current account deficit is likely to hit a three-year
high of 1.8 per cent or $43.81 billion in FY22, as against a surplus of 0.9 per
cent or $23.91 billion in FY21. Additional pressure came as United Nations said
Foreign Direct Investment inflows to India declined $19 billion to $45 billion
in 2021 but the country still remained among the top 10 global economies for
FDI last year. On the global front, yen jumped on Friday after the government
and the central bank in a rare joint statement expressed concern about the
yen's recent slide to hit two-decade lows. Finally, the rupee ended at 77.88
(Provisional), weaker by 14 paise from its previous close of 77.74 on
Wednesday.
The FIIs as per Friday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 6003.90 crore against gross selling of Rs 7404.89 crore, while
in the debt segment, the gross purchase was of Rs 600.18 crore with gross sales
of Rs 604.87 crore. Besides, in the hybrid segment, the gross buying was of Rs
118.82 crore against gross selling of Rs 7.42 crore.
The US markets ended sharply
lower on Friday as a steeper-than-expected rise in US consumer prices in May
fueled fears of more aggressive interest rate hikes by the Fed. Asian markets
are trading deeply in red on Monday as tracking sell-off on the Wall Street.
Indian markets fell on Friday amid weakness across sectors, suffering their
worst single-day fall in three weeks, as investors globally feared aggressive
hikes in COVID-era interest rates will hamper economic growth. Today, start of
new week is likely to be gap-down tracking losses across global markets.
Investors will be eyeing India's retail inflation figures for May to be out
later in the day. Some cautiousness will come as RBI data showed that after
rising for two consecutive weeks, the country's foreign exchange reserves
declined by $306 million to $601.057 billion in the week ended June 3. However,
some respite may come later in the day as the National Statistical Office said
India's factory output growth accelerated to an eight-month high at 7.1 per
cent in April on the back of a lower base. Some support may come as Fitch
Ratings revised up its outlook for India's long-term foreign currency Issuer
Default Rating (IDR) to stable from negative after a gap of two years. Traders
may take note of Chief Economic Advisor (CEA) Anantha Nageswaran's statement
that India has shown an exemplary resilience in recovering from a crisis due to
the COVID-19 pandemic. He added all major activities and parameters of the
economy have crossed their pre-COVID levels, and it is now enjoying
macroeconomic tailwinds. There will be some buzz in the power stocks as, Power
Minister RK Singh said India's power demand this year has jumped by a record
40,000-45,000 MW per day as an intense heat wave sweeps through northern parts
of the country, the economy expands, and electricity reaches millions of
unelectrified homes. Defence stocks will be in focus with a private report that
the Indian Air Force plans to acquire 114 fighter jets of which 96 would be
built in India and rest 18 would be imported from a foreign vendor chosen for
the project, giving impetus to India's Make in India initiative. There will be
some reaction in media stocks ahead of Indian Premier League's media rights
auction. The final day of bidding process will declare the winner from
shortlisted candidates - Sony, Zee, Disney Star, and Viacom18. Day 1 of the
media bidding process saw bids hike up to Rs 43,000 crore for digital and
television.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
16,201.80
|
16,141.36
|
16,293.46
|
BSE
Sensex
|
54,303.44
|
54,079.36
|
54,654.15
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Oil & Natural Gas corporation of India
|
178.12
|
164.65
|
163.11
|
166.41
|
Hindalco Industries
|
145.41
|
385.75
|
381.74
|
390.79
|
Tata Motors
|
119.14
|
427.40
|
423.31
|
430.16
|
Tata Steel
|
95.22
|
1,023.00
|
1,011.96
|
1,032.71
|
Wipro
|
87.26
|
461.20
|
455.94
|
466.84
|
Dr. Reddy's Laboratories' wholly owned subsidiary -- Aurigene and Olema have entered into exclusive global license agreement to research, develop and commercialize novel small molecule inhibitors of an undisclosed oncology target.
UltraTech Cement has signed a MoU with Coolbrook, a transformational technology and engineering company, to explore possibilities on reduction of CO2 emissions from its cement manufacturing operations.
HDFC Bank has launched full value outward remittance service in US Dollar Euro and the Pound Sterling for trade and retail customers.
Grasim Industries has raised Rs 1,000 crore and allotted 10,000-7.50% Rated, Listed, Unsecured, Redeemable NCDs of Rs 10 lakh each (Series 22-23 I, 7.50% GIL 2027) on private placement basis.