Indian equity
benchmarks erased almost all their losses to end marginally in the red on
Wednesday as the regulatory crackdowns in China continued to impact investor
sentiment. Markets opened weak and saw panic selling, as the International
Monetary Fund (IMF) has cut India's gross domestic product (GDP) growth
forecast to 9.5 percent for the fiscal year to March 31, 2022 as the onset of a
severe second COVID-19 wave cut into recovery momentum. This forecast for
2021-22 is lower than the 12.5 per cent growth in GDP that IMF had projected in
April before the second wave took a grip. Some concern also came after
department-related Parliamentary Standing Committee observes that the stimulus
package announced by the government for the economic revival from the pandemic
hit economy has been found to be inadequate as the measures adopted were more
of loan offering and long-term measures instead of improving the cash flow to
generate demand as immediate relief. Traders also took a note of Finance
Minister Nirmala Sitharaman informed Parliament that the number of wilful
defaulters has increased from 2,208 to 2,494 at the end of March 31, 2021. As
per RBI data on global operations, during the last three financial years,
public sector banks (PSBs) have effected recovery of Rs 3,12,987 crore in
non-performing assets (NPAs) and written-off loans. Markets however recouped
most of its losses in late afternoon trade, as traders found some solace with
Minister of State for Finance Pankaj Chaudhary has said increased tax
collection in the first quarter this fiscal (Q1FY22) shows that the economy is
on the recovery path. Net direct tax collection in the April-June quarter of
the current fiscal is over Rs 2.46 lakh crore, as against more than Rs 1.17
lakh crore during the same period of the previous fiscal. Some support also
came as Union Minister of State for Finance Bhagwat Kisanrao Karad said that
the government has taken a number of steps to facilitate digital banking,
doorstep banking services and digital lending platforms. Finally, the BSE
Sensex fell 135.05 points or 0.26% to 52,443.71, while the CNX Nifty was down
by 37.05 points or 0.24% to 15,709.40.
The US markets ended mostly lower
on Wednesday after a somewhat volatile session as investors reacted to a slew
of corporate earnings updates, and the Federal Reserve's monetary policy
statement. The Federal Open Market Committee, which concluded its two-day
monetary policy meeting Wednesday, left the target range for its federal funds
rate unchanged at 0 to 0.25 percent as expected, and said it will continue with
its $120 billion-a-month bond-buying program. The bank, which said the economy
is strengthening despite concerns over the spread of the coronavirus, added
that risks to the economic outlook remain.
It noted the sectors most adversely affected by the pandemic have shown
improvement but have not fully recovered. Inflation has risen, largely
reflecting transitory factors. Overall financial conditions remain
accommodative, in part reflecting policy measures to support the economy and
the flow of credit to US households and businesses. Powell said there was more
ground to make up in the labor market to meet substantial further progress
threshold to taper bond purchases. Besides, shares of Alphabet Inc. climbed
more than 3 percent after the company reported a sharp jump in earnings in the
second quarter thanks to a near 70 percent increase in advertising revenue.
Facebook, Inc gained 1.5 percent after reporting a profit of $10.39 billion or
$3.61 per share for the second quarter, compared with $5.18 billion or $1.80
per share in the year-ago quarter. Boeing Company shares climbed more than 4
percent on strong results. The company reported net earnings of $587 million or
$1.00 per share compared to a loss of $2.38 billion or $4.20 per share in the
prior year.
Crude oil futures ended higher on
Wednesday lifted by data showing a larger-than-expected drop in US crude
inventories last week. Data released by Energy Information Administration (EIA)
showed crude inventories in the US fell by 4.089 million barrels last week
(July 23), over a million barrels up from an expected drop of about 2.9 million
barrels. A report released by the American Petroleum Institute (API) on Tuesday
showed US crude stocks fell by 4.7 million barrels for the week ended July 23,
compared with street expectations for a 2.9 million fall in crude stocks,
following a surprise rise in crude inventories the previous week. Crude oil
futures for September rose $0.74 or 1 percent to settle $72.39 barrel on the
New York Mercantile Exchange. September Brent crude gained $0.34 or 0.5 percent
to settle at $73.86 a barrel on London's Intercontinental Exchange.
Indian rupee ended higher against
dollar on Wednesday, on persistent selling of the American currency by
exporters. Traders took some solace with Minister of State for Finance Pankaj
Chaudhary's statement that increased tax collection in the first quarter this
fiscal shows that the economy is on the recovery path. Traders overlooked IMF's
report in which it has sharply scaled down India's economic growth projection
by 300 basis points to 9.5 per cent for the current financial year from 12.5
per cent estimated earlier in April. IMF said the downward revision is owing to
lack of access to vaccines and possibility of renewed waves of coronavirus. On
the global front, dollar made marginal gains on Wednesday with investors
holding off on placing major bets ahead of the outcome of a U.S. Federal
Reserve meeting. Finally, the rupee ended 74.38, stronger by 9 paise from its
previous close of 74.47 on Tuesday.
The FIIs as per Wednesday's data
were net seller in both equity and debt segment. In equity segment, the gross
buying was of Rs 8608.55 crore against gross selling of Rs 9166.73 crore, while
in the debt segment, the gross purchase was of Rs 136.45 crore against gross
selling of Rs 394.06 crore. Besides, in the hybrid segment, the gross buying
was of Rs 6.39 crore against gross selling of Rs 13.95 crore.
The US markets ended mostly lower
on Wednesday in listless trade after the Federal Reserve gave no clue about
when it might start reducing its purchases of government bonds, even as it said
the economic recovery is on track. Asian markets are trading in green on
Thursday after US Federal Reserve left the benchmark interest rates near zero.
Indian markets closed lower amid weak global cues Wednesday even though they
recovered half of their intraday losses in late afternoon deals. Today, the
start of the F&O series expiry session is likely to be mildly positive
tailing the gains in other Asian markets. Some support will come as the Reserve
Bank of India (RBI) allowed payment system providers, prepaid card issuers,
card networks and white label ATM operators access to its Centralised Payment
Systems (CPS), such as real time gross settlement (RTGS) and National
Electronic Fund Transfer (NEFT) systems in the first phase of its plan bring
non-banks in the same platform. However, there may be some cautiousness with a
private report that the Indian economy is expected to face some pressure in the
current financial year due to the second wave of the pandemic, coupled with
weaker consumer sentiment, but a large capex by the government can be a saving
grace for the economy. Traders may take note of report that continuing efforts
to foster ease of doing business as well as encourage startups ecosystem, the
government has approved amendments to the Limited Liability Partnership (LLP)
Act, including decriminalising 12 offences under the law. There will be some reaction
in MSME stocks with a private report stating that non-performing assets in the
micro, small and medium enterprises grew in the March quarter to 12.6 per cent
against 12 per cent at the end of the preceding December quarter. The Rs
500-crore Tatva Chintan Pharma Chem IPO shares are scheduled to make their
stock market debut on Thursday. The public issue was sold during July 16-20,
and received the second-highest subscription of 185.23 times among IPOs in
2021. There will be lots of earnings reaction based on the performance of the
companies.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,709.40
|
15,559.40
|
15,813.45
|
BSE
Sensex
|
52,443.71
|
51,939.73
|
52,810.69
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
361.39
|
284.45
|
281.74
|
289.04
|
Bharti Airtel
|
319.32
|
567.90
|
546.94
|
579.79
|
ICICI Bank
|
183.67
|
685.05
|
674.40
|
691.35
|
State Bank of India
|
176.36
|
425.50
|
420.86
|
430.31
|
ITC
|
147.36
|
209.10
|
207.70
|
210.25
|
Larsen & Toubro's board has approved the amalgamation of the company's wholly-owned arm L&T Hydrocarbon Engineering with the parent firm.
Dr Reddy's Laboratories is anticipating the locally manufactured Russia's COVID-19 vaccine Sputnik V to be available from September-October period.
Tata Motors is looking to increase the prices of its entire range of passenger vehicles from next week as it aims to offset the steep rise in procurement cost of essential materials like steel and precious metals.
HDFC Bank has launched an overdraft facility for small retailers in partnership with CSC SPV.