Indian equity benchmarks extended
their gains for the sixth consecutive session and ended over half a percent
higher on Friday led by gains in Banking, Basic Materials and FMCG stocks. Key gauges made positive start and stayed in
green for whole day, as provisional data available on the NSE showed that
Foreign institutional investors (FIIs) have net purchased shares worth Rs
1,799.32 crore, continuing buying for the fourth consecutive session on July 21.
Traders also took note of Commerce Secretary BVR Subrahmanyam's statement that
the negotiations for the India-UK free trade agreement will be concluded by
August 31 and ready for signing by Diwali in October. However, key gauges
trimmed some gains in late morning deals, as traders turned cautious with the
FICCI's quarterly survey showed that the Indian economy is expected to expand
7% in fiscal 2022/23, slower than a previous estimate of 7.4% and the central
bank's 7.2% projection. The survey said the war in Ukraine is likely to keep
inflation high and dent consumer demand. Also, the Asian Development Bank has
slashed its growth forecast for India to 7.2 per cent for FY23 from 7.5 per
cent estimated earlier citing higher than anticipated inflation since April and
subsequent monetary tightening by the central bank. But, markets gained
traction in late afternoon deals, as some optimism remained among traders with
Reserve Bank Governor Shaktikanta Das' statement that the RBI was confident of
achieving its growth-inflation aim of ensuring a soft landing for the economy,
where inflation is brought down closer to the target of 4 percent over a period
of time. At the same time, the growth sacrifice is within manageable limits.
Meanwhile, capital markets regulator Sebi has proposed a regulatory framework
for the online bond platforms that are selling listed debt securities. Under
the proposal, bond platforms should register as stock brokers (debt segment)
with the Securities and Exchange Board of India (Sebi) or be run by
Sebi-registered brokers. Finally, the BSE Sensex rose 390.28 points or 0.70% to
56,072.23 and the CNX Nifty was up by 114.20 points or 0.69% to 16,719.45.
The US markets settled lower on
Friday with tech-heavy Nasdaq losing over a percent. A steep drop by shares of
Snap Inc. (SNAP) weighed on the tech-heavy Nasdaq, with the Snapchat parent
plunging by 39.1 percent to a two-year closing low. The nosedive by Snap came
after the company reported disappointing second quarter results and declined to
provide guidance due amid incredibly challenging conditions. Snap also
announced plans to substantially slow its rate of hiring. Social media giant
Twitter (TWTR) also reported second quarter results that missed analyst
estimates, citing advertising industry headwinds and uncertainty related to the
pending acquisition by Elon Musk. Computer hardware stocks also showed a
substantial move to the downside on the day, dragging the NYSE Arca Computer
Hardware Index down by 3.1 percent. The index ended Thursday's trading at its
best closing level in over a month. Significant weakness was also visible among
semiconductor stocks, as reflected by the 2.6 percent slump by the Philadelphia
Semiconductor Index. The index also pulled back off a one-month closing high.
Outside of the tech sector, airline stocks extended the sell-off seen during
trading on Thursday, resulting in a 2.8 percent nosedive by the NYSE Arca
Airline Index. Traders remained sidelined as they looked ahead to next week's
highly anticipated monetary policy decision by the Federal Reserve. The Fed is
widely expected to raise interest rates by at least 75 basis points as part of
its ongoing efforts to combat elevated inflation. Investors are eyeing reports
on consumer confidence, new home sales, durable goods orders, second quarter
GDP and personal income and spending.
Crude oil futures ended lower on
Friday on concerns about outlook for energy demand. Also, easing concerns about
supply following resumption of oil exports from Libya, and the Russian supply
of natural gas to Europe through the Nord Stream pipeline weighed on oil
prices. A report from Energy Information Administration shows gasoline demand
has dropped almost 8% from the previous year. According to the report from
Baker Hughes, the oil and gas rig count in the U.S. rose by two to 758 in the
week, the highest level since March 2020. The Baker Hughes has warned that the
demand outlook for the next 12 to 18 months was deteriorating. Benchmark crude
oil futures for September delivery fell $1.65 or about 1.7 percent to settle at
$94.70 a barrel on the New York Mercantile Exchange. Brent crude for September
delivery lost $0.65 or 0.64 percent to settle at $103.21 a barrel on London's
Intercontinental Exchange.
Snapping previous day's gaining
streak, Indian rupee ended weaker against dollar on Friday with fresh dollar
demand by banks and importers. Traders were worried as FICCI's quarterly survey
showed that the Indian economy is expected to expand 7% in fiscal 2022/23,
slower than a previous estimate of 7.4% and the central bank's 7.2% projection.
The survey said the war in Ukraine is likely to keep inflation high and dent
consumer demand. Also, the Asian Development Bank has slashed its growth
forecast for India to 7.2 per cent for FY23 from 7.5 per cent estimated earlier
citing higher than anticipated inflation since April and subsequent monetary
tightening by the central bank. On the global front, euro continued its retreat
on Friday from a more-than-two-week high as disappointing activity data from
France and Germany pushed the single currency lower, a day after the European
Central Bank raised interest rates for the first time since 2011. Finally, the
rupee ended at 79.90 (provisional), weaker by 5 paisa from its previous close
of 79.85 on Thursday.
The FIIs as per Friday's data
were net buyers in both equity and debt segment. In equity segment, the gross
buying was of Rs 8274.08 crore against gross selling of Rs 6399.10 crore, while
in the debt segment, the gross purchase was of Rs 1422.33 crore against gross
selling of Rs 925.75 crore. Besides, in the hybrid segment, the gross buying
was of Rs 0.74 crore against gross selling of Rs 12.18 crore.
The US markets ended lower on
Friday as disappointing earnings from Snap spooked investors, triggering
selling pressure in social media and ad tech stocks. Asian markets are trading
mixed on Monday as worries about a global economic downturn sapped investors'
risk appetite. Indian markets clocked their highest closing levels in nearly
three months on Friday, continuing a winning streak for the sixth session in a
row, boosted by gains in financial stocks. Today, the start of the crucial
F&O series expiry week is likely to be a bit cautious tailing the weakness
in other global markets. There will be some cautiousness with a private report
that Indian rupee may further depreciate to 82 to a dollar in the near term due
to widening of trade deficit and expected aggressive rate hike by the US Fed
later this week to tame record high inflation. However, some support may come
as Finance Minister Nirmala Sitharaman said that the trust-based taxation
system introduced by the government has resulted in improved collections and
increase in the number of return filings. Direct tax collections surged to Rs
14.09 lakh crore in 2021-22, registering a year-on-year growth of 49.02 per
cent on the back of strong growth in mop-up from individual and corporation
tax. Traders may take note of Reserve Bank of India Governor Shaktikanta Das'
statement that the central bank will ensure that the economy has a soft landing
wherein inflation is closer to 4 per cent, with minimal impact on growth.
Meanwhile, GST on pre-packaged goods/ food packets was levied after some states
gave feedback of losing revenues they previously earned from levy of VAT on
food items. The decision to levy the tax, which came into effect from July 18,
is not that of the Union government but of the GST Council. It was considered
by the Fitment Committee that has officers of some states and the centre. Sugar
industry stocks were in focus as Indian Sugar Mills Association (ISMA) in its
latest report stated that India's sugar production may fall slightly to 355
lakh tonnes in the 2022-23 marketing year starting October, due to diversion of
sugarcane towards ethanol manufacturing. There will be some reaction in
fertilizer industry stocks with a private report that the government may revise
the budget estimate (BE) for fertiliser subsidy in the current fiscal year by
around 140% to Rs 2.5 trillion, as elevated global prices of fertilisers and
natural gas, the key feedstock, have inflated costs. Banking stocks will be in
limelight with India ratings report that banks are unlikely to take a big hit
on profitability this quarter due to rising bond yields, which may eat up 5.3
per cent (Rs 11,790 crore) of their net income in the worst-case scenario.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
16,719.45
|
16,636.15
|
16,777.50
|
BSE
Sensex
|
56,072.23
|
55,776.43
|
56,277.03
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
146.99
|
513.70
|
509.86
|
518.86
|
ICICI Bank
|
122.67
|
800.05
|
791.46
|
806.26
|
Oil and Natural Gas Corporation
|
116.30
|
132.45
|
131.40
|
133.65
|
Tata Motors
|
103.40
|
454.90
|
451.49
|
459.14
|
ITC
|
99.67
|
300.55
|
298.26
|
302.66
|
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