Oscillating
between minor gains and losses, Indian equity benchmarks once again closed flat
but with marginal gains on Thursday as weekly index futures and options
contracts expired. Markets started the session slightly in red tracking
negative cues from global markets. Traders remained cautious with a report by
India Ratings and Research stating that India Inc resorted to salary cuts to
protect their profits in the June quarter, as revenues came under pressure due
to the second pandemic wave that affected nearly the entire country. It added
the weak wage growth will prove to be a drag on the overall economic recovery
in the medium term as it will affect household consumption. Sentiments remained
in lackluster mood amid reports that with goods and services tax (GST) officers
under pressure to exceed the Rs 1-trillion collection mark per month, industry
has faced a barrage of recovery notices and summons issued over the last one
month across sectors. Industry bodies have claimed harassment by field
officers, blocking of input tax credit, cancellation of GST registration,
threats of arrest and steep penalties, impacting their working capital and
operations. Traders took note of report that Mumbai has recorded 530 new cases
of Covid-19: the highest since mid-July. However, last minute buying helped
benchmark indices eke out gains and close mildly higher. Traders found some
solace as S&P Global Ratings said India is expected to post strong economic
growth in the coming quarters, even as inflation, led by food prices, is likely
to remain elevated. It said the economy is expected to clock 9.5 per cent
growth in the current fiscal year, followed by 7 per cent expansion in the next
year. Some support also came with private survey stating that India Inc's
business sentiments are drawing closer to pre-pandemic levels, hinting at a
more robust performance in the next quarter. A survey, with over 3,700
respondents across digital platforms, found that transparent taxation has been
one of the most significant initiatives of the government followed by the
production-linked incentives (PLI) scheme, equalisation levy and new labour
codes. Finally, the BSE Sensex rose 54.81 points or 0.09% to 58,305.07 and the
CNX Nifty was up by 15.75 points or 0.09% to 17,369.25.
The US markets ended
significantly lower on Friday after slightly positive start. The initial
strength on Wall Street came as traders looked to pick up stocks at somewhat
reduced levels following the recent downward trend. Buying interest waned
shortly after the start of trading, however, as traders continued to express
concerns about the economic impact of the delta variant. Traders may also have
been wary of buying stocks ahead of the Federal Reserve's next monetary policy
meeting later this month. The Fed may provide an update on the plans for its
asset purchase program, although recent signs of slowing economic momentum
could lead the central bank to push back tapering. On the economic data front,
the Labor Department released a report showing producer prices increased by
slightly more than expected in the month of August. The Labor Department said
its producer price index for final demand climbed by 0.7 percent in August
after jumping by 1.0 percent for two straight months. Street had expected
producer prices to increase by 0.6 percent. Excluding prices for food, energy
and trade services, core producer prices rose by 0.3 percent in August
following a 0.9 percent advance in July. Core prices were expected to rise by
0.4 percent.
Crude oil futures settled sharply
higher on Friday as traders assessed China's decision to release crude from its
strategic reserve and continued to monitor the slow return of production in the
Gulf of Mexico following Hurricane Ida. The latest data from Energy Information
Administration showing declines in crude oil, gasoline and distillate
stockpiles in the U.S. last week continued to support oil's advance. Oil's rise
was also due to reports indicating a warmer relationship between the U.S. and
China following a call between the presidents of the two nations. Crude oil
futures for October rose $1.58 or 2.3 percent to settle $69.72 barrel on the
New York Mercantile Exchange. November Brent crude surged $1.47 or 2.1 percent
to settle at $72.92 a barrel on London's Intercontinental Exchange.
Reversing previous session
losses, Indian rupee ended significantly higher against dollar on Thursday,
owing to dollar sale by exporters and banks. Traders took some solace with report
that V-shaped recovery in the first quarter of 2021-22, despite the brutal
second wave of the coronavirus pandemic, is a testimony to India's strong
macroeconomic fundamentals. However, upside remain capped with India Ratings
and Research's (IndRa) report states that India Inc resorted to salary cuts to
protect their profits in the June quarter, as revenues came under pressure due
to the second pandemic wave that affected nearly the entire country. The weak
wage growth will prove to be a drag on the overall economic recovery in the
medium term as it will affect household consumption. On the global front,
sterling ticked higher on Thursday after British lawmakers backed Prime
Minister Boris Johnson's tax hikes and was set to end three straight days of losses.
Finally, the rupee ended 73.50, stronger by 10 paise from its previous close of
73.60 on Wednesday.
The FIIs as per Thursday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 8690.02 crore against gross selling of Rs 9519.87 crore, while
in the debt segment, the gross purchase was of Rs 1015.99 crore with gross
sales of Rs 1331.69 crore. Besides, in the hybrid segment, the gross buying was
of Rs 38.72 crore against gross selling of Rs 31.48 crore.
The US markets ended lower on
Friday as Technology stocks did the most to weigh down the market. Asian
markets are trading mostly in red on Monday as investors monitored Chinese tech
stocks in Hong Kong. Indian markets ended marginally higher on Thursday despite
weak global cues. Markets remained shut on Friday on account of Ganesh
Chaturthi. Today, the start of new week is likely to be pessimistic amid
weakness in the global peers and rising crude prices. Traders will be concerned
as a periodic labour force survey by the National Statistical Office (NSO) showed
that unemployment rate for all ages in urban areas rose to 10.3 per cent in
October-December 2020 as compared to 7.9 per cent in the corresponding months a
year ago. Some cautiousness may come as India Ratings and Research (Ind-Ra)
said that salaried and wages earners will be a drag on overall economic
recovery in medium term due to tepid recovery of household consumption.
However, some respite may come later in the day as Industrial production surged
11.5 per cent in July mainly due to a low-base effect and good performance by
manufacturing, mining and power sectors but the output remained slightly below
the pre-pandemic level. Traders may be getting encouragement as a survey by
industry chamber FICCI said the outlook for increased manufacturing activities
in the second quarter of this fiscal has been significantly improved, though
the cost of doing business and production is rising. Sentiments may get
optimism as RBI Governor Shaktikanta Das said many fast indicators are showing
an uptick in economic activity and the Reserve Bank is quite optimistic about
its 9.5 per cent GDP growth estimate for FY2021-22 at present. Some support
will come as India Exim Bank said the country's merchandise exports will grow
33 per cent to amount to $98.45 billion in the second quarter of FY 2021-22.
Additionally, as per NSDL data, foreign portfolio investors (FPI) have so far
made a total net investment of Rs 7,575 crore in India so far in September.
Meanwhile, the commerce ministry's investigation arm DGTR has recommended the
imposition of anti-dumping duty on certain aluminium products from China to
guard domestic manufacturers from cheap imports. There will be some buzz in
power stocks as power ministry data showed that India's power consumption grew
5.45 per cent in the first week of September to 27.41 billion units (BU),
showing consistent recovery after easing of lockdown curbs by states. Banking
stocks will be in focus as Fitch Ratings said Indian banks' improved
performance for the financial year ended March 2021 (FY21) is in contrast to
the stress evident from extension of Covid-19-related relief measures to
borrowers. There will be some reaction in sugar industry stocks as industry
body ISMA said India, the world's second largest sugar producer, can export 6
million tonne of the sweetener in the 2021-22 season commencing next month,
taking advantage of the firm global market.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,369.25
|
17,321.41
|
17,398.36
|
BSE
Sensex
|
58,305.07
|
58,148.51
|
58,398.11
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Motors
|
340.20
|
298.95
|
293.84
|
303.79
|
Oil
& Natural Gas Corporation
|
272.42
|
122.15
|
118.96
|
124.56
|
Bharti
Airtel
|
194.19
|
686.15
|
672.74
|
693.89
|
ITC
|
190.51
|
212.65
|
210.84
|
214.19
|
Indian
Oil Corporation
|
133.22
|
112.80
|
111.91
|
114.16
|
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