Indian equity benchmarks bounced
back on Wednesday after a two-day decline and ended with gains of around a
percent, led by strong buying support in healthcare, Capital Goods and IT
stocks. Benchmarks made cautious start, as the International Monetary Fund
(IMF) in its World Economic Outlook update July 2022 has cut India's growth
rate by 0.8 percentage point to 7.4 per cent for fiscal year 2022, reflecting
mainly less favourable external conditions and more rapid policy tightening.
In April, the IMF had projected a fairly robust growth of 8.2 per cent for
India in 2022. Some concern also came amid a private report stating that the
global economy is in the grips of a serious slowdown, with some key economies
at high risk of recession and only sparse meaningful cooling in inflation over
the next year. However, key gauges erased initial losses to enter in green
terrain in morning deals, as traders found some solace with Minister of State
for Finance Bhagwad Karad stated that the amount involved in fraud cases
reported by public sector banks (PSBs) has come down to Rs 3,204 crore in the last
fiscal from Rs 28,884 crore in 2017-18. Sentiments remained up-beat as ECGC has
introduced a new scheme to provide enhanced export credit risk insurance cover
to the extent of 90% to support small exporters under the Export Credit
Insurance for Banks Whole Turnover Packaging Credit and Post Shipment (ECIB-
WTPC & PS). The scheme is expected
to benefit a number of small-scale exporters availing of export credit with
banks which hold the ECGC WT-ECIB covers. Finally, the BSE Sensex rose 547.83
points or 0.99% to 55,816.32 and the CNX Nifty was up by 157.95 points or 0.96%
to 16,641.80.
The US markets ended higher with
Nasdaq settling over four percent on Wednesday following the Federal Reserve's
monetary policy decision. The Federal
Reserve raised interest rates by 75 basis points, as expected. The hike follows
the 75 basis point increase in rates last month, and marks the fourth straight
central bank meeting that has resulted in a rate hike. Powell said as the
stance of monetary policy tightens further, it likely will become appropriate
to slow the pace of increases while we assess how our cumulative policy
adjustments are affecting the economy and inflation. The Fed's next monetary
policy meeting is scheduled for September 20-21, with CME Group's FedWatch tool
currently indicating a 59.2 percent chance of a 50 basis point rate hike and a
36.7 percent chance of another 75 basis points rate hike. On the economic data
front, reflecting a sharp increase in orders for transportation equipment, the
Commerce Department released a report showing an unexpected surge in new orders
for US manufactured durable goods in the month of June. The Commerce Department
said durable goods orders shot up by 1.9 percent in June after climbing by 0.8
percent in May. The continued increase surprised participants, who had expected
durable goods orders to dip by 0.4 percent. However, pending home sales in the
US pulled back sharply in the month of June, according to a report released by
the National Association of Realtors (NAR). NAR said its pending home sales
index plunged by 8.6 percent to 91.0 in June after rising by 0.4 percent to a
revised 99.6 in May. Street had expected pending home sales to slump by 1.5
percent compared to the 0.7 percent increase originally reported for the
previous month.
Crude oil futures ended sharply
higher with rally over two percent on Wednesday as data showed a drop in crude
inventories in the US in the week ended July 22nd. Data from US Energy
Information Administration (EIA) showed crude stockpiles in the US dropped 4.52
million barrels last week. The EIA data also showed that distillate stockpiles
fell by 784,000 barrels last week, as against an expected drop of about 500,000
barrels. Besides, data from the American Petroleum Institute showed US crude
stocks dropped by about 4 million barrels last week, nearly four times the fall
expected by market participants. Benchmark crude oil futures for September
delivery surged $2.28 or about 2.4 percent to settle at $97.26 a barrel on the
New York Mercantile Exchange. Brent crude for September delivery rose $2.22 or
2.1 percent to settle at $106.62 a barrel on London's Intercontinental
Exchange.
Indian rupee ended weaker against
dollar on Wednesday due to increased demand for American currency from
importers and banks. The sentiments were under pressure as the International
Monetary Fund (IMF) in its World Economic Outlook update July 2022 has cut
India's growth rate by 0.8 percentage point to 7.4 per cent for fiscal year
2022, reflecting mainly less favourable external conditions and more rapid
policy tightening. Renewed outflows by FIIs also put pressure on the rupee.
However, the positive tone in domestic equities cushioned the downside. On the
global front, the dollar edged further away from recent 20-year highs on
Wednesday ahead of the U.S. Federal Reserve policy meeting, at which the
central bank is expected to raise rates by another 75 basis points to tame
soaring inflation. Finally, the rupee ended at 79.91 (provisional), weaker by
13 paisa from its previous close of 79.78 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in equity, while net buyers in debt segment. In equity
segment, the gross buying was of Rs 4034.03 crore against gross selling of Rs
5311.75 crore, while in the debt segment, the gross purchase was of Rs 1122.07
1122.07 crore against gross selling of Rs 941.38 crore. Besides, in the hybrid
segment, the gross buying was of Rs 5.85 crore against gross selling of Rs
22.74 crore.
The US markets ended higher on
Wednesday after Fed announced another 75 basis point interest rate, as widely
expected, and Powell hinted at a slowdown in the pace of rate hikes at future
meetings. Asian markets are trading mostly in green on Thursday following the
broadly positive cues from Wall Street overnight. Indian markets bounced back
on Wednesday after a two-day decline, with the Sensex and Nifty climbing nearly
1 percent each, tracking heavy buying in IT and banking stocks. Today, markets
likely to start session on optimistic note mirroring positive cues from global
markets. There will be some volatility ahead of the expiry of monthly
derivative (futures and options) contracts due by the end of the session.
However, some cautiousness may come as Moody's Analytics, the research arm of
the rating agency Moody's Investor Services, warned that the decade-long dream
run of low inflation for emerging economies in Asia is about to end and there
will be consequences. Traders may take note of a private report that the
Reserve Bank of India's rate-setting panel will go for a 0.35 per cent hike in
the key repo rate at its meeting next week. Meanwhile, capital markets
regulator Sebi has come out with new guidelines on settlement of running
accounts of clients' funds lying with stock brokers, to be applicable from
October 1. Under the guidelines, the settlement of the running account of funds
of the client will be done by the trading member after considering the End of
the day (EOD) obligation of funds as on the date of settlement across all the
exchanges on the first Friday of the quarter for all the clients. Also, Sebi
has extended the deadline by three months to November 1, for commencing the
validation of all KYC records by KYC Registration Agencies (KRAs). Telecom
industry stocks will be in action as India's first 5G auction received bids
worth Rs 1.49 trillion on day two, as aggressive bidding across bands by
players like Reliance Jio and Bharti Airtel pushed the sale over to the third
day. There will be some reaction in gold related stocks as the World Gold
Council said a sharp fall in purchases by investors pulled global gold demand
down 8% in the second quarter compared to the same period in 2021. IT industry
stocks will be in limelight with a private report that after a big jump in the
margins and profits in the quarters immediately after the break-out of the
Covid-19 pandemic in March 2020, the export-driven IT services companies are
now facing their biggest earnings challenge in more than a decade. Investors
will be eyeing a slew of companies to report their June quarter results
(Q1FY23) later in the day.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
16,641.80
|
16,502.55
|
16,717.25
|
BSE
Sensex
|
55,816.32
|
55,365.17
|
56,060.27
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Oil and Natural Gas Corporation
|
201.87
|
128.60
|
127.54
|
129.94
|
State Bank of India
|
151.01
|
528.20
|
516.99
|
534.69
|
Tata Motors
|
100.81
|
444.05
|
438.44
|
447.34
|
ICICI Bank
|
95.36
|
800.50
|
795.50
|
804.65
|
ITC
|
93.46
|
304.15
|
301.50
|
305.90
|
ONGC has signed a MoU with Greenko ZeroC to jointly pursue opportunities in Renewables, Green Hydrogen, Green Ammonia and other derivatives of green hydrogen.
Tata Motors has tied up with Indian Bank to facilitate easy financing for its passenger vehicles customers.
Wipro has extended five-year strategic engagement with Nokia, the world's leading multinational, networking, telecommunications and consumer electronics company.
Dr. Reddy's Laboratories has launched Bortezomib for Injection 3.5 mg, the generic equivalent of Velcade (bortezomib) Injection, in the U.S. market approved by the USFDA.