Indian equity
benchmarks took a breather after two days of solid rally and ended Wednesday's
volatile session with over half percent losses amid selling in the domestic
equity market. Weak global cues also dented the sentiments on Dalal Street.
Markets made negative start but soon wiped-out losses to trade in green, as
traders took some support with report that Union Finance Ministry, on the
recommendation of the Panchayati Raj Ministry, released Rs 8,923.8 crore to 25
states for providing grant to rural local bodies. The spread of COVID-19
pandemic in different parts of the country has recently assumed serious
proportions. The vulnerabilities of the rural communities need to be especially
addressed. But, buying proved short-lived as key gauges once again entered into
red terrain in morning deals, as traders were cautious, as smaller non-banking
finance companies (NBFCs) have written to the Reserve Bank requesting liquidity
support as they continue to face challenges in raising funds. In a letter
addressed to RBI Governor Shaktikanta Das, Finance Industry Development Council
(FIDC), a representative body of NBFCs, said the announcements made on May 5 by
the central bank have addressed liquidity needs of small microfinance
institutions MFIs, but NBFCs have missed out. Local equity markets have
extended their losses in late afternoon deals and hovered near the lowest point
of the day, even as UN data stated that India, China and South Africa have fared relatively better than other major economies in imports and exports in the
first quarter of this year as global trade recovery from the COVID-19 crisis
hit a record high during in the same period. Finally, the BSE Sensex lost
290.69 points or 0.58% to 49,902.64, while the CNX Nifty was down by 77.95
points or 0.52% to 15,030.15.
The US markets
ended lower on Wednesday, extending their previous session's losses as worries
about inflation and the bitcoin's sharp plunge weighed on the market. The
minutes from the Federal Reserve's April meeting that showed some of the
members were in favor of tapering the bank's asset buying program if the
economy continues to show signs of recovery and inflation keeps trending higher
weighed as well. Chairman Jerome Powell said that the recovery remains uneven
and far from complete and the economy was still not showing the substantial
further progress standard the committee has set before it will change policy. Besides,
Technology stocks, including Tesla, which have big exposure to bitcoin, tumbled
on selling pressure. Bitcoin, the world's largest crypto-currency, tanked by
close to 40% from its record high levels to $31,000 on Wednesday, hitting its
lowest level since February. Cisco Systems plunged more than 7 percent. Chevron
shed about 3 percent, while Amgen, Caterpillar, Goldman Sachs, Boeing, DuPont
and IBM lost 1 to 2 percent. However, the markets recovered after the bitcoin
rebounded from the session's lows.
Crude oil futures ended deeply in
red on Wednesday weighed down by data showing an increase in US crude
stockpiles, and on worries about outlook for energy demand from Asian
countries. Data released by Energy Information Administration (EIA) showed
crude oil inventories in the US increased by 1.321 million barrels last week
(May 14), less than an expected increase of 1.623 million barrels. The American
Petroleum Institute reported on Tuesday that crude inventories rose by 620,000
barrels for the week ended May 14. Besides, growing concerns about inflation
and fears that central banks might consider tightening their monetary policies
weighed as well on oil prices. The potential of Iranian supply returning also
weighed. Crude oil futures for June fell $2.13 or about 3.3 percent to settle
at $63.36 barrel on the New York Mercantile Exchange. July Brent crude dropped
$2.16 or 3.1 percent to settle at $66.55 a barrel on London's Intercontinental
Exchange.
Rupee ended substantially weaker
against dollar on Wednesday on account of continued dollar demand from
importers and banks. Besides, selloff in domestic equity markets also weighed
on the rupee sentiment. Traders were concerned from rising inflationary
pressure globally and increasing apprehension among investors about Federal
Reserve's soft monetary stance due to sharp rise in CPI inflation. Adding more
pessimism, private report stated that India's second wave of virus cases will
hit the economy by prompting consumers to save rather than spend, unlike last
year's contraction that was driven mainly by supply disruptions. On the global
front; pound traded flat to the dollar and hit its lowest in more than a week
against a broadly stronger euro on Wednesday, after data showed a doubling of
consumer price inflation in Britain in April. Finally, the rupee ended 73.18,
weaker by 13 paise from its previous close of 73.05 on Monday.
The FIIs as per Wednesday's data
were net buyer in equity segment, while net seller in debt segment. In equity
segment, the gross buying was of Rs 8843.86 crore against gross selling of Rs
7704.10 crore, while in the debt segment, the gross purchase was of Rs 287.84
crore with gross sales of Rs 583.44 crore. Besides, in the hybrid segment, the
gross buying was of Rs 4.92 crore against gross selling of Rs 15.49 crore.
The US markets ended in red on
Wednesday after minutes from an April Federal Reserve meeting showed
participants agreed the US economy remained far from the central bank's goals,
with some eyeing a future discussion of tapering its bond buying program. Asian
markets are trading mostly lower on Thursday after a jittery session on Wall as
a hint of tapering talk from the US Fed drove selling in the bond market and
lifted the safe-haven dollar. Indian markets ended lower on Wednesday after a
two-day rally, pressured by financial, auto and metal stocks. Today, the
markets are likely to continue their sluggish performance with flat-to-negative
start amid weakness in global markets. Traders will be concerned as India witnessed
276,261 fresh cases, with the new infection count remaining below the
300,000-mark for the fourth consecutive day. The total caseload stands at
25,771,405, Wordometer showed. There will be some cautiousness with ratings
agency ICRA's statement that sequential growth slackening driven by the second
wave of Covid-19 in India has emerged as a concern. ICRA also cautioned that
bruised sentiment, high healthcare and fuel expenses will limit discretionary
purchases in the immediate term. Furthermore, the agency expects a cut-back in
spending on contact-intensive services. However, traders may take note of
report that the Indian government claimed it has ramped up the production of
Remdesivir, an anti-viral drug prescribed for treating moderate-to-critical
Covid patients, by 10 times. From 1 million vials per month in April, the
Centre claims it will produce 10 million vials this month, as it has increased
the number of plants manufacturing Remdesivir from 20 to 60. Meanwhile, the
Income Tax department has issued over Rs 24,792 crore refunds to more than 15
lakh taxpayers so far this fiscal. Of this personal income tax refunds worth Rs
7,458 crore has been issued in over 14.98 lakh cases. Corporate tax refunds of
Rs 17,334 crore have been issued to 43,661 taxpayers. Banking stocks will be in
focus as RBI Governor Shaktikanta Das asked state-owned banks to quickly
implement measures announced by the central bank recently in the right earnest,
and to continue focussing on steps to enhance the resilience of their balance
sheets. There will be some reaction in fertilizer stocks as the Centre
increased its share of subsidy for di-ammonia phosphate (DAP) by 140 per cent
from Rs 500 to Rs 1,200 per bag, thereby rolling back the steep 58 per cent
hike in prices announced by companies since April. There will be some important
result announcements to keep the markets in action.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,030.15
|
14,981.54
|
15,106.09
|
BSE
Sensex
|
49,902.64
|
49,729.69
|
50,177.30
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Motors
|
1,194.07
|
314.45
|
310.05
|
320.90
|
Indian
Oil Corporation
|
741.74
|
107.20
|
104.55
|
109.40
|
State
Bank of India
|
481.89
|
384.40
|
380.56
|
388.86
|
Oil
& Natural Gas Corporation
|
252.95
|
114.90
|
113.60
|
116.00
|
ITC
|
244.05
|
207.75
|
206.40
|
210.25
|
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