Indian equity benchmarks erased most
of their initial gains but managed to end in green on Wednesday mostly because
of buying in index majors Nestle, HDFC and Reliance Industries. Key gauges made
positive start, as traders took some support with Icra Ratings' statement that
after rising steeply for a month, the cost of market borrowing for states
declined sharply on Tuesday with the weighted average cut-off falling by 11
basis points to 7.72 per cent from 7.83 per cent last week. Some optimism also
came after a Crisil Ratings' latest report stated that securitisation volumes
have jumped 48 per cent to over Rs 75,000 crore for the first half of the
fiscal (H1FY23). It said the long track record of stable performance of
securitised pools, despite several episodes of adversity, may have eased
investor concerns, but some investors continue to be apprehensive. Traders took
a note of report that Tuhin Kanta Pandey, secretary in the Department of
Investment and Public Asset Management, said the Indian government should focus
on privatisation of state-run companies instead of chasing high divestment
targets, pointing to market volatility and investors' shaky appetite for risk.
Sentiments remained positive in late afternoon deals, amid a private report
stating that freshers' hiring intentions have increased to 61 per cent for the
July-December 2022 period as employers across India look to hire due to the
accelerated rate of tech and digital advancements. However, key gauges trimmed
most of gains in final minutes of trade as traders were anxious with exchange
data showed foreign institutional investors (FIIs) remained net sellers in the
capital market on Tuesday as they offloaded shares worth Rs 153.40 crore.
Meanwhile, kick-starting stakeholder consultation for 2023-24 Budget, the
finance ministry has sought suggestions from industry and trade associations
regarding direct and indirect taxes. Along with the suggestions, the industry
has to submit justification for their demand which, if found with merit, could
become part of the Union Budget for 2023-24 (April-March), to be tabled in
Parliament on February 1, 2023. Finally, the BSE Sensex rose 146.59 points or
0.25% to 59,107.19 and the CNX Nifty was up by 25.30 points or 0.14% to
17,512.25.
The US markets ended lower on
Wednesday on profit booking as traders cashed in on the strong gains posted on
Monday and Tuesday. Lingering concerns about higher interest rates and the
impact on the global economy also continued to weigh on the markets along with
a jump in treasury yields. The yield on the benchmark ten-year note moved
sharply higher following a modest pullback on Tuesday, reaching its highest
levels in fourteen years. The weakness
on markets came despite a notable advance by shares of Netflix (NFLX), with the
streaming giant surging by 13.1 percent. However, downside remained capped
following the release of the Federal Reserve's Beige Book, a compilation of
anecdotal evidence on economic conditions in each of the twelve Fed districts.
The Beige Book said economic activity in the US has expanded modestly since
early September, although the report noted conditions varied across industries
and districts. The Fed said four districts saw flat activity and two cited
declines, with slowing or weak demand attributed to higher interest rates,
inflation, and supply disruptions. With regard to inflation, the Beige Book
noted price growth remained elevated but acknowledged some easing across
several districts. On the sectoal front, housing stocks moved sharply lower
over the course of the session, dragging the Philadelphia Housing Sector Index
down by 4.5 percent. The sell-off by housing stocks came after the Commerce
Department released a report showing housing starts tumbled by more than
expected in the month of September. Substantial weakness also emerged among
banking stocks, as reflected by the 3.6 percent nosedive by the KBW Bank Index.
Biotechnology stocks also showed a significant move to the downside on the day,
resulting in a 3.4 percent plunge by the NYSE Arca Biotechnology Index.
Crude oil futures ended sharply
higher on Wednesday as US government data showed declines in domestic crude and
gasoline supplies. Data from US Energy Information Administration (EIA) showed
crude inventories in the US dropped by 1.7 million barrels last week (October
14) versus expectations for an increase of 1.4 million barrels. Gasoline stocks
fell by 114,000 barrels last week compared to expectations for a 1.1
million-barrel drop. The American Petroleum Institute had on Tuesday reported
that crude oil stockpiles in the US unexpectedly fell by 1.3 million barrels in
the week ended October 14 compared to an increase of inventory by 7.05 million
barrels in the previous week. Markets were expecting inventories to rise by
1.55 million barrels. Benchmark crude oil futures for November delivery rose
$2.73 or 3.3 percent at $85.55 a barrel on the New York Mercantile Exchange.
Brent crude for December delivery surged $2.38 or about 2.6 percent to settle
at $92.41 a barrel on London's Intercontinental Exchange.
Indian rupee ended at new record
low against dollar on Wednesday, as surging US treasury yields forced a rally
in the greenback. Investors maintained cautious approach even after Crisil
Ratings' latest report stated that securitisation volumes have jumped 48 per
cent to over Rs 75,000 crore for the first half of the fiscal (H1FY23). It said
the long track record of stable performance of securitised pools, despite
several episodes of adversity, may have eased investor concerns, but some
investors continue to be apprehensive. On the global front, Dollar held close
to a 32-year peak versus the yen on Wednesday while edging up from a two-week
trough against a basket of major peers, underpinned by the prospect of
aggressive U.S. Federal Reserve interest rate hikes. Finally, the rupee ended
at 83.02 (Provisional), weaker by 62 paisa from its previous close of 82.40 on
Tuesday.
The FIIs as per Wednesday's data
were net buyer in both equity and debt segment. In equity segment, the gross
buying was of Rs 9144.77 crore against gross selling of Rs 8286.71 crore, while
in the debt segment, the gross purchase was of Rs 714.74 crore against gross
selling of Rs 405.44 crore. Besides, in the hybrid segment, the gross buying
was of Rs 5.63 crore against gross selling of Rs 14.21 crore.
The US markets ended lower on
Wednesday as weakness in shares of Abbott Laboratories and a rise in Treasury
yields sapped momentum from the current earnings season and outweighed a surge
in Netflix Inc shares. Asian markets are trading mostly in red on Thursday as
economic fears weigh, and US stocks fell as Treasury yields climbed overnight
stateside. Indian markets extended their gains for fourth straight session and
ended higher on Wednesday with investors focusing on quarterly earnings
updates. Today, markets are likely to get negative start amid downbeat global
cues and a sharp decline in the rupee. There will be some cautiousness as
foreign institutional investors (FIIs) net offloaded shares worth Rs 453.91
crore on Wednesday (October 19), according to the provisional data available on
the NSE. However, some respite may come later in the day as RBI Monetary Policy
Committee (MPC) member Ashima Goyal said that the efforts of the Reserve Bank
to contain price rise by repeatedly increasing interest rates will help in
containing inflation, which is likely to fall below 6 per cent next year. Goyal
further said that the policy rate hikes have largely reversed pandemic-time
cuts but the real rate remains low enough not to hurt the growth recovery.
Besides, the finance ministry has released Rs 1,764 crore grant to four states.
The states to which grants were released are Andhra Pradesh (Rs 136 crore),
Chhattisgarh (Rs 109 crore), Maharashtra (Rs 799 crore) and Uttar Pradesh (Rs
720 crore). Meanwhile, the GST Council is likely to meet in the first half of
November to discuss the reports of the panel of ministers on setting up GST
appellate tribunal and levy of tax casinos and online gaming. There will be
some buzz in aviation industry stocks as data released by aviation safety
regulator Directorate General of Civil Aviation (DGCA) showing that domestic
air passenger volume grew 64.61 per cent to 10.35 million in September over the
same period last year. Diagnostic companies' stocks will be in focus as rating
agency Crisil said a fall in Covid-19 tests will lead to an up to 7 per cent
dent in diagnostic companies' toplines in FY23. It added that the fall in
revenues in FY23 will come after a handsome 30 per cent growth in FY22 on
higher testing, attributed the fall in Covid testing in the ongoing fiscal to
the waning intensity of the pandemic and also a preference for self-test kits.
There will be some reaction in metal stocks as the World Steel Association
(WSA) said global steel demand will erode this year by 2.3% due to surging
inflation and climbing interest rates, downgrading their forecast. Mineral
industry stocks will be in limelight as the country's mineral output registered
a cumulative growth of 4.2 per cent in the first five months of this fiscal
compared to the year-ago period. Investors await more of financial results from
India Inc for domestic cues, with Bajaj Finance, Axis Bank, Asian Paints and
ITC due to post their earnings later in the day. Moreover, private market
intelligence platform Tracxn Technologies will debut in the market on October
20.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,512.25
|
17,454.20
|
17,588.95
|
BSE
Sensex
|
59,107.19
|
58,912.75
|
59,350.67
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
3,87.64
|
100.05
|
99.41
|
100.96
|
ITC
|
1,62.96
|
346.35
|
341.61
|
349.26
|
Coal India
|
1,38.86
|
238.20
|
235.80
|
241.80
|
Axis Bank
|
1,08.68
|
829.85
|
818.35
|
839.90
|
State Bank of India
|
95.40
|
553.40
|
548.81
|
560.71
|
ITC has entered into an agreement to acquire further 1000 Compulsorily Convertible Preference Shares of Rs 10 each of Mother Sparsh Baby Care.
Reliance Industries' telecom arm -- Reliance Jio Infocomm has added 32,81,699 customers in August 2022.
Tata Motors has received an order for 200 electric buses which will be deployed in Jammu and Srinagar.
Tech Mahindra has inked a MoU with the Government of Gujarat under its IT/ITeS policy.