Indian equity benchmarks halted a
three-day losing streak on Wednesday and ended with gains of around a percent
amid broad-based gains, shrugging off nervousness across global markets. After
making flat-to-positive start, key gauges gained traction as traders took some
support after Finance Minister Nirmala Sitharaman exuded confidence on India's
relative and absolute growth performance in the rest of the decade and forecast
the country's growth rate to be around 7% this financial year. Sentiments
remained positive as Krishnamurthy Subramanian, Executive Director (India) -
International Monetary Fund Designate, said India has emerged as a positive
spot in the world economy, due to the well-designed policy responses that were
implemented during the COVID crisis. However, key indices erased all the gains
to trade flat in late morning deals, as traders turned cautious with the International
Monetary Fund (IMF) in its annual World Economic Outlook report stating that
outlook for India is growth of 6.8 per cent in 2022 - a 0.6 percentage point
downgrade since the July forecast, reflecting a weaker-than-expected outturn in
the second quarter and more subdued external demand. But, markets regained
traction in late afternoon session to settle near day's high point. Traders
took note of S&P Global Ratings' statement that India is facing various
factors that may shake its sovereign credit metrics but strong economic growth
rate and external balance sheet are expected to neutralize the risks inherent
in the global environment. S&P has the lowest investment grade rating of BBB-
on India with a stable outlook. Some support also came as the Reserve Bank of
India (RBI) has raised the minimum capital requirement for setting up an asset
reconstruction company (ARC) to Rs 300 crore from the existing Rs 100 crore in
order to strengthen the securitisation sector which plays a vital role in the
management of distressed financial assets. Finally, the BSE Sensex rose 478.59
points or 0.84% to 57,625.91 and the CNX Nifty was up by 140.05 points or 0.82%
to 17,123.60.
The US markets ended marginally
lower on Wednesday as investors looked ahead to a key consumer report that will
inform the pace of the Federal Reserve's rate hikes going forward. Meanwhile,
the minutes from the Fed meeting showed policymakers pushed back on the idea of
a pivot, choosing to give priority to their commitment to take inflation. The
minutes showed that the policymakers felt slowing the pace of tightening would
be appropriate while assessing the effects of cumulative policy adjustments on
growth and inflation. The members lowered their projections for the economy and
expect GDP to grow at just a 0.2 percent annualized pace in 2022 and just 1.2
percent in 2023, well below trend and big drop from 2021, which saw the
strongest gains since 1984. The summary of economic projections at the meeting
pointed to a terminal rate, or end point of rate increases to be around 4.6
percent. Stock specific developments, Walgreens Boots Alliance, Walmart,
Verizon, Cisco Systems, Merck, Boeing and Honeywell International ended weak.
However, Shares of PepsiCo rallied 4.2 percent after the company raised its
annual guidance and reported stronger-than-expected quarterly earnings. Shares
of Moderna Inc. climbed more than 8 percent. The company announced that it
would team up with Merck to develop and sell a cancer drug. JP Morgain gained
about 1.7 percent. Coca-Cola, Intel and Nike gained 1 to 1.25 percent.
Crude oil futures ended lower on
Wednesday, magnifying their previous sessions' losses, amid concerns about
outlook for demand due to slowing global growth. The Organization of the
Petroleum Exporting Countries (OPEC) cut its outlook for demand growth this
year by between 460,000 bpd and 2.64 million barrels per day, citing the
resurgence of China's COVID-19 containment measures and high inflation. OPEC said
the world economy has entered into a time of heightened uncertainty and rising
challenges. Benchmark crude oil futures for November delivery fell $2.02 or
2.26 percent at $87.33 a barrel on the New York Mercantile Exchange. Brent
crude for December delivery dropped $1.62 or about 1.7 percent to settle at
$92.67 (Provisional) a barrel on London's Intercontinental Exchange.
Indian rupee tumbled against
dollar on Wednesday, on account of sustained dollar demand from importers and
banks. Investors maintained cautious approach after the International Monetary
Fund (IMF) in its annual World Economic Outlook report has cut its projection
of India's economic growth in 2022 to 6.8 per cent - a 0.6 percentage point
downgrade since the July forecast, reflecting a weaker-than-expected outturn in
the second quarter and more subdued external demand. On the global front,
British pound rebounded off a two-week low on Wednesday as investors cast doubt
on the Bank of England's commitment to ending emergency bond buys as scheduled,
amid reports signalling the BoE could extend purchases should market conditions
warrant. Finally, the rupee ended at 82.33 (Provisional), weaker by 12 paisa
from its previous close of 82.21 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in equity segment and net buyers in debt segment. In equity
segment, the gross buying was of Rs 19229.37 crore against gross selling of Rs
22990.54 crore, while in the debt segment, the gross purchase was of Rs 1632.90
crore against gross selling of Rs 1129.01 crore. Besides, in the hybrid
segment, the gross buying was of Rs 15.31 crore against gross selling of Rs
30.55 crore.
The US markets ended lower on
Wednesday after minutes from the last Federal Reserve meeting showed
policymakers agreed they needed to maintain a more restrictive policy stance.
Asian markets are trading mostly in red on Thursday as investors await
inflation data from the U.S. due later stateside. Indian markets rebounded and
ended higher on Wednesday as value buying in energy, banking, IT, and FMCG
shares helped the Indian indices cut short a three-day losing run. Today,
markets are likely to start session in red tracking lackluster trade in global
peers. Weak set of macro-economic data likely to dampen sentiments in domestic
markets. India's retail inflation spiked to 7.41 per cent in September, mainly
due to costlier food items. For the ninth month in a row, retail inflation has
remained above the Reserve Bank of India's tolerance level of 6 per cent. Also,
India's industrial growth, as per the Index of Industrial Production (IIP),
slid to an 18-month low of -0.8 percent in August from 2.2 percent in July.
Traders will be concerned as rating agency Crisil's research wing said India
Inc is expected to report a three per cent year-on-year decline in profits for
the July-September period. It added that this fall in profitability will be the
fourth straight quarter of the decline in profits for the listed companies.
Also, foreign institutional investors (FIIs) net sold shares worth Rs 542.36
crore on October 12, as per provisional data available on the NSE. However,
some respite may come later in the day as industry chamber PHDCCI said going by
the current trend, it is expecting the Indian economy to grow at 6-7 per cent
during current fiscal year. Chamber's new president Saket Dalmia said
production has bounced back and there is a big demand in the country. Traders
may take note of the International Monetary Fund (IMF) report stating that
India's combined fiscal deficit (Centre + states) is likely to return to the
pre-pandemic level (FY20) of 7.5 per cent of gross domestic product (GDP) only
by FY27. Some support may also come with a private report stating that a combination
of factors like wider opening, improving labour market and terms of trade for
the rural sector will result in rural demand to rebound in India. There will be
some buzz in coal industry stocks as Union Minister Pralhad Joshi said Coal
India, accounts for over 80 per cent of the domestic coal output, will achieve
1 billion tonne coal production target by 2025-26 as against the earlier
timeline of 2023-24 in view of the COVID-19 pandemic. Sugar industry stocks
will be in focus the Directorate General of Foreign Trade (DGFT) said the
validity for export of raw sugar to the US under Tariff-Rate Quota (TRQ) has
been extended from September 30, 2022 to December 31, 2022. There will be some
reaction in banking stocks as Moody's Investors Service said the Reserve Bank
of India's slew of rate hikes this year to combat surging inflation will help
lift banks' net interest margins, but the increase will be limited as funding
costs will rise faster than loan rates. IT stocks will continue to hog
limelight as they report their second quarter earnings of FY23. Infosys and
Mindtree are likely to deliver their Q2FY23 performance on later in the day.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,123.60
|
17,008.31
|
17,190.61
|
BSE
Sensex
|
57,625.91
|
57,245.34
|
57,847.06
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
413.57
|
100.65
|
99.36
|
101.56
|
Power Grid Corporation of India
|
264.66
|
215.60
|
211.31
|
217.91
|
Axis Bank
|
212.28
|
807.80
|
790.56
|
817.91
|
ICICI Bank
|
145.57
|
867.85
|
862.34
|
872.54
|
Tata Motors
|
142.87
|
396.75
|
392.50
|
399.60
|
Tata Motors' all new Tiago.ev has received an electrifying response from the market and has surged past the 10,000 booking mark on first day.
Bajaj Finance is extending a list of lucrative benefits to its customers during the Amazon Great Indian Festival, which started from September 23, 2022.
M&M and Jio-bp have entered into agreement for setting up charging network for the upcoming electric SUVs of the company.
Adani Enterprises' unit -- Adani Data Networks has been granted unified licence for access services, which enables it to provide all telecom services in the country.