Indian equity benchmarks snapped
two-day losing streak and ended higher on Tuesday aided by market heavyweight
Mahindra & Mahindra, Bajaj Finserv and Titan Company. After making cautious
start, key gauges traded in green terrain, as the finance ministry has notified
the consolidated rules for overseas investment by Indian entities to promote
ease of doing business. The Foreign Exchange Management (Overseas Investment)
Rules, 2022 will subsume extant regulations pertaining to Overseas Investments
and Acquisition and Transfer of Immovable Property Outside India Regulations,
2015. Some support also came with a private report stating that the Centre may
release about Rs 30,000 crore soon as GST (goods and services tax) compensation
for June 2022, the last month of the five-year guaranteed compensation pledged
by the Union government. However, key gauges slipped into red terrain in
afternoon deals, as foreign institutional investors sold Rs 453.77 crore in the
Indian markets on August 22. Some cautiousness also came in as a recent study
by the Reserve Bank of India (RBI) shows project loan demand by Indian
companies for capex in 2021-22 (FY22) did not pick up like it did in the
preceding years. Domestic sentiments remained pessimistic, as the government
introduced new set of rules for domestic entities, including companies and
large family offices and start-ups, opting for overseas direct investment route
(ODI), which could impact their acquisition decisions in a big way. But, key
gauges erased losses to end higher, taking support from private report stating
that The Reserve Bank's rate setting panel is likely to opt for slowing down
the pace of hikes and increase the repo rate by 0.25 per cent in September. The
central bank has already hiked the repo rate by 1.40 per cent in three
consecutive actions since May this year, in response to the uncomfortably high
inflation which has been consistently breaching upper end of the tolerance band
set by the government to the RBI. Finally, the BSE Sensex rose 257.43 points or
0.44% to 59,031.30 and the CNX Nifty was up by 86.80 points or 0.50% to
17,577.50.
The US markets ended in red on
Tuesday as worries about economic slowdown and tighter monetary policy weighed
on sentiment. Data showing US business activity dropping for a second straight
month and at the fastest pace as well since May 2020 weighed. Data from Markit
Economics showed the S&P Global US Composite PMI came in with a score of 45
for August, down from a reading of 47.7 in July. The Manufacturing PMI fell to
51.3 in August from 52.2 a month earlier, while the Services PMI dropped to
44.1 in the month from 47.3 in July. Data from the Commerce Department showed
new home sales in the U.S. dropped 12.6% month-over-month to a seasonally
adjusted 511,000 in July, the lowest reading since January 2016. According to a
report from the Federal Reserve Bank of Richmond, the Richmond Fed composite
manufacturing index fell to -8 in August from 0 in the previous month.
Meanwhile, Redbook Research Inc. said that the Redbook index increased by 13.5
percent in the week ending August 20, 2022 over the same week in the previous
year. Besides, investors also looked ahead to Fed Chair Jerome Powell's speech
at the central bank's annual Jackson Hole economic symposium later this week
for clues about the bank's outlook for the economy and interest rates.
Crude oil futures ended sharply
higher with rally over three and half percent on Tuesday. Traders weighed the
prospects of the Organization of the Petroleum Exporting Countries and allies
(OPEC+) cutting output to support prices in the event of Iranian crude entering
the market. Saudi Arabia has warned that
OPEC could cut output to correct the recent oil price fall. Saudi's oil
minister Prince Abdulaziz bin Salman said that the Organization of the
Petroleum Exporting Countries stands ready to reduce production as future
prices don't reflect the underlying fundamentals of supply and demand. Benchmark
crude oil futures for September delivery surged $3.38 or about 3.7 percent to
settle at $93.74 a barrel on the New York Mercantile Exchange. Brent crude for
October delivery rose $3.74 or 3.87 percent to settle at $96.48 a barrel on
London's Intercontinental Exchange.
Rupee ended weaker against dollar
on Tuesday on account of continued dollar demand from importers and banks.
Traders were worried as foreign institutional investors (FIIs) were net sellers
in the capital market as they offloaded shares worth Rs 453.77 crore on Monday,
exchange data showed. However, downfall remain capped with private report
stating that The Reserve Bank's rate setting panel is likely to opt for slowing
down the pace of hikes and increase the repo rate by 0.25 per cent in
September. On the global front, euro hit a fresh two-decade low on Tuesday,
dealt a fresh blow by renewed concern that an energy shock will keep inflation
elevated and makes a recession in Europe all but certain. Finally, the rupee
ended at 79.87 (Provisional), weaker by 3 paisa from its previous close of
79.84 on Monday.
The FIIs as per Tuesday's data
were net sellers in equity and net buyers in debt segment. In equity segment,
the gross buying was of Rs 6651.39 crore against gross selling of Rs 6997.73
crore, while in the debt segment, the gross purchase was of Rs 335.65 crore
against gross selling of Rs 257.28 crore. Besides, in the hybrid segment, the
gross buying was of Rs 8.51 crore against gross selling of Rs 6.43 crore.
The US markets ended lower on
Tuesday as investors focused on data showing a slowing economy ahead of a US
Federal Reserve gathering later this week in Jackson Hole, Wyoming. Asian
markets are trading mostly in red on Wednesday following overnight losses on
Wall Street. Indian markets snapped their two-day losing streak and managed to
close a volatile trading session with gains on Tuesday tracking gains in
European markets. Today, domestic equity markets likely to get flat-to-negative
start amid weakness in global markets. There will be some cautiousness as
Standard and Poor's (S&P) said credit profiles could deteriorate for up to
$114 billion of debt in the books of Indian companies tackling rising interest
rates and inflation. Besides, the Securities and Exchange Board of India (Sebi)
has imposed prudential limits on investments by portfolio managers in their own
associates or related parties. However, some respite may come as Commerce
Secretary BVR Subrahmanyam said India's merchandise exports are likely to be
around $470-480 billion in the current fiscal against $420 billion in 2021-22.
The secretary also said the trade deficit, which crossed $100 billion in the
first four months of the current fiscal, is not going to cross a discomfort
level. Traders may take encouragement with SBI Ecowrap report stating that
India's GDP is expected to be much higher in Q1FY23 and growth is expected
around 15.7 per cent with a large possibility of an upward bias because several
indicators have shown good progress in the Indian economy. Also, Icra in its
report said India's GDP growth in the first quarter of the current fiscal is
expected to grow in double digits at 13% owing to a low base and robust
recovery in the contact-intensive sectors following the widening vaccination
coverage. Some support may come with a private report that Reserve Bank of
India Governor Shaktikanta Das seeks to slow India's inflation to 4 per cent
within two years after hitting its peak in the last few months. There will be
some buzz in metal stocks after Union Minister Jyotiraditya M Scindia exuded
confidence that India will become the number one producer of steel in the world
in the days to come. Oil & gas sector stocks will be in focus with
government data showing that India's crude oil production fell 3.8 per cent in
July on lower output from fields operated by state-owned ONGC and private
sector firms. Production of crude oil, which is refined to produce fuels such
as petrol and diesel, fell to 2.45 million tonnes in July from 2.54 million
tonnes a year back. There will be some reaction in aviation industry stocks as
Jyotiraditya Scindia, Union Minister for Civil Aviation said Growth
opportunities for airlines are tremendous as passenger volume will double from
200 million currently to 400 million over the next seven to 10 years. Electric
vehicle restated companies stocks will be in limelight as India Energy Storage
Alliance (IESA) in its report said India's electric vehicle market is expected
to expand at a compounded annual growth rate of 49 per cent between 2021-2030,
with the segment's volumes set to cross annual sales of 17 million by 2030.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,577.50
|
17,406.61
|
17,686.96
|
BSE
Sensex
|
59,031.30
|
58,402.81
|
59,429.44
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
705.31
|
107.90
|
104.85
|
109.60
|
Oil & Natural Gas Corporation
|
242.68
|
134.00
|
131.34
|
135.44
|
Tata Motors
|
177.79
|
461.20
|
451.84
|
466.34
|
NTPC
|
143.62
|
158.90
|
156.64
|
160.19
|
Adani Port & Special Economic Zone
|
135.15
|
836.00
|
809.00
|
860.10
|
NTPC has started Commercial Operation of first part capacity of 10 MW out of 20 MW Gandhar Solar PV Project at Gandhar, Gujarat, with effect from August 23, 2022.
Bajaj Finance's subsidiary -- Bajaj Housing Finance has hiked its lending rate by 0.50% and the lowest priced product for the salaried and professional applicants will be 7.70% now.
IndusInd Bank has launched two Digital Banking Units at Jalandhar (Punjab), and Chengalpattu (Tamil Nadu) to commemorate the 75th Year of India's Independence.
Infosys scaled back average variable payout of employees to around 70 per cent for the June quarter amid margin squeeze and high employee costs.