Rising for a second straight
session, Indian equity benchmarks ended on a buoyant note and gained nearly one
and a half percent on Monday, taking positive cues from Asian and global
markets. After the gap-up start, the benchmarks gradually inched higher, as
traders got encouragement with SBI Research in its latest report stated that
the income of farmers has grown in the range of 1.3-1.7 times in FY22 from the
FY18 levels on average while grain exports soared to over $50 billion. For
certain crops in some states (like soyabean in Maharashtra and cotton in
Karnataka) farmers' income more than doubled in FY22 from FY18 levels. Traders
were also getting support with Reserve Bank of India (RBI) in its article
stating that the impact of US Federal Reserve's announcement in November last
year to taper its asset purchases was moderate on Indian financial markets
largely due to the country's strong external position in 2021. Some support
also came after private report stated that India's real gross domestic product
(GDP) growth for the financial year 2022-23 is expected to be above 7 percent
despite global headwinds. Domestic
sentiments remained firm in second half of trading session, after the Reserve
Bank of India said in its latest monthly bulletin that the Indian economy
remains resilient despite formidable global headwinds and amidst fears of a
recession. The bulletin said that in spite of geopolitical spillovers, 'There
are sparks in the wind that ignite the innate strength of the economy and set
it on course to becoming the fastest growing economy in the world, though
besieged it might be by fears of recession'. Some support also came after
Agriculture Minister Narendra Singh Tomar expressed hope that monsoon rains,
which are crucial for Kharif sowing, will progress in the coming days and said
it is too early to comment on the paddy acreage. Traders also took a note of
the Reserve Bank of India (RBI) data showed that the RBI remained net buyer of
the US currency in May, after it purchased $2.001 billion on net basis from the
spot market. The RBI purchased $10.143 billion from the spot market and sold
$8.142 billion. Traders overlooked Credit Rating Agency ICRA's report stated
that states have budgeted 36 per cent higher capital expenditure during this
financial year (FY23), which may lead to a sharp rise in their fiscal deficit
to Rs 8.4 lakh crore. Finally, the BSE
Sensex rose 760.37 points or 1.41% to 54,521.15 and the CNX Nifty was up by
229.30 points or 1.43% to 16,278.50.
The US markets ended lower on
Monday as traders continued to worry about the economic outlook ahead of next
week's Federal Reserve meeting. Traders were also reluctant to make significant
bets ahead of the release of earnings news from a slew of big-name companies
later this week. However, the early strength on markets came as traders
continued to pick up stocks at relatively reduced levels after the rally seen
last Friday halted a recent downward trend. Positive sentiment was also
generated in reaction to upbeat earnings news from Goldman Sachs, with the
financial giant jumping by 2.5 percent. The advance by Goldman Sachs came after
the company reported second quarter results that exceeded street estimates on
both the top and bottom lines. On the economic data front, the National
Association of Home Builders released a report showing a substantial deterioration
in US homebuilder confidence in the month of July. The report showed the
NAHB/Wells Fargo Housing Market Index plunged to 55 in July from 67 in June.
Street had expected the index to edge down to 66. The HMI showed its second
biggest single-month drop after a 42-point nosedive in April 2020, tumbling to
its lowest level since May 2020. On the sectoral front, Healthcare stocks came
under pressure over the course of the session, dragging the Dow Jones US Health
Care Index down by 2.2 percent. Significant weakness also emerged among
biotechnology stocks, as reflected by the 2.1 percent slump by the NYSE Arca
Biotechnology Index.
Crude oil futures ended sharply
higher on Monday on concerns over gas supply from Russia. Further, a weak
dollar contributed significantly to the jump in oil prices. The dollar index
dropped to 106.89 before recovering to 107.30, but still remained firmly down
with a loss of more than 0.6%. Meanwhile, US President Joe Biden, who visited
the Middle East, returned without getting assurances from key producer Saudi
Arabia to boost oil supply. Saudi's foreign minister reportedly said that there
was no discussion on oil at the US-Arab summit and that OPEC+ would continue to
assess market conditions and what is necessary. Benchmark crude oil futures for
August delivery rose $5.01 or 5.1 percent to settle at $102.60 a barrel on the
New York Mercantile Exchange. Brent crude for September delivery surged $5.11
or 5 percent to settle at $106.27 a barrel on London's Intercontinental
Exchange.
Indian rupee ended considerably
weak against dollar on Monday due to a surge in crude oil prices and
unrelenting foreign fund outflows. Foreign investors continue to be cautious
about the Indian equity market and have pulled out over Rs 7,400 crore this
month so far amid sustained strengthening of the dollar and increasing concerns
over a recession in the US. This comes following a net withdrawal of Rs 50,203
crore from equities in June. Meanwhile, RBI remained net buyer of the US
currency in May, after it purchased $2.001 billion on net basis from the spot
market. The RBI purchased $10.143 billion from the spot market and sold $8.142
billion. On the global front, euro firmed to a one-week high on Monday,
benefiting from the dollar's retreat after several Federal Reserve officials
signaled they did not favor stepping up the rate hiking pace. Finally, the
rupee ended at 79.98 (provisional), weaker by 16 paisa from its previous close
of 79.82 on Friday.
The FIIs as per Monday's data
were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs
5297.86 crore against gross selling of Rs 6932.38 crore, while in the debt
segment, the gross purchase was of Rs 118.77 crore against gross selling of Rs
130.84 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.85
crore against gross selling of Rs 8.68 crore. Thus, FIIs stood as net sellers
of Rs 7.83 crore in hybrid segment.
The US markets ended lower on
Monday after bank stocks erased earlier gains and Apple shares fell on a report
saying the company plans to slow hiring and spending growth next year. Asian
markets are trading mostly lower on Tuesday on the back of negative cues
markets US markets. Indian equity markets ended sharply higher on Monday on the
back of positive global cues. Today, the markets are likely to make negative
start on weak cues from US markets amid rising crude oil prices. There may be
cautiousness in the markets as a private report said that it has cut its FY23
real GDP expansion estimate for India by 0.40 per cent to 7.2 per cent on
slower global growth. It said the GDP growth will slow down to 6.4 per cent in
FY24, adding that this is lower by 0.30 per cent compared to the earlier
estimate. Further, traders may be concerned as the ministry of food and public
distribution has said that rice stocks in the central pool are likely to plunge
below the buffer norm by 2.2 million tonne (MT) or 16%, if the free ration
scheme - Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) - is extended to the
whole of the second half of the current financial year. The ministry said
running the scheme for October-March FY23 with the current grain composition
will cost the exchequer a massive Rs 90,000 crore if not higher. However, some
respite may come later in the day on report that retirement fund body EPFO is
likely to approve this month a proposal to enhance its investments in equities
to up to 20 percent of the investible deposits from the current limit of 15
percent. At present, EPFO can invest 5 to 15 percent of the investible deposits
in equity or equity-related schemes. Traders may get some encouragement as
Minister of State for Finance Pankaj Chaudhary said the government has taken
several supply-side measures to tame rising inflation. There may be some buzz
in road and construction sector stocks as rating agency Crisil said India's
national highway construction will likely reach only 32-34 km per day during
the current financial year as input prices are expected to remain elevated. It
expects the pace of highway construction to pick up post monsoon.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
16,278.50
|
16,184.48
|
16,330.23
|
BSE Sensex
|
54,521.15
|
54,185.19
|
54,706.88
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
211.86
|
450.50
|
444.53
|
455.13
|
ONGC
|
210.10
|
130.00
|
127.73
|
131.48
|
Hindalco Industries
|
138.63
|
367.20
|
358.23
|
372.13
|
Axis Bank
|
124.65
|
683.50
|
668.63
|
693.18
|
Power Grid
|
113.67
|
210.45
|
208.77
|
212.27
|
Titan Company's flagship brand -- Tanishq has opened new store at Velachery, Chennai, in Tamil Nadu. As part of inauguration, the brand is extending special offers on jewellery purchase.
Coal India (CIL) has awarded the contract to PT Bara Daya Energy consortium to import 7.91 lakh tonnes of coal for supplying to gencos during August and September.
Maruti Suzuki India has launched new S-Presso with Next Gen K-Series 1.0L Dual Jet, Dual VVT engine with Idle-Start-Stop technology.
L&T Realty, the real-estate development arm of Larsen & Toubro (L&T), is all set to expand its footprint in Mumbai market to drive growth.