Indian equity benchmarks ended in
red on Wednesday in line with tepid global markets as inflation and recession
fears continued to hurt sentiment. Markets made gap-down opening as continued
selling in FIIs weighted on market sentiments. Foreign institutional investors
(FIIs) sold shares worth a net Rs 1,244.44 crore on June 28. Some cautiousness
came in with a private report that after a gap, the prices of select varieties
of pulses have started rising for the past few days due to a delay in the onset
of the southwest monsoon over major growing regions of Madhya Pradesh,
Maharashtra, and Gujarat. Some concerns also came after the Reserve Bank of
India (RBI) in its latest data has showed that the growth in Scheduled
Commercial Banks (SCBs) deposits moderated to 10 per cent year-on-year in March
2022, compared to an increase of 11.9 per cent a year ago. During 2021-2022,
current, savings and term deposits rose by 10.9 per cent, 13.3 per cent and 7.9
per cent, respectively. However, key gauges trimmed most of their losses in
late afternoon deals, as traders took some support as Union Minister Bhanu
Pratap Singh Verma emphasised the Micro, Small & Medium Enterprise (MSME)
sector's important role in making India a $5-trillion economy and said that the
government will remove all the barriers in credit flow to this sector. He also
said that the government was also committed to develop a better system of
redressal and debt facilities. Some support also came as the GST Council
approved changes in tax rates on some goods and services while allowing states
to issue an e-way bill for intra-state movement of gold and precious stones.
Finally, the BSE Sensex fell 150.48 points or 0.28% to 53,026.97 and the CNX Nifty
was down by 51.10 points or 0.32% to 15,799.10.
The US markets ended mostly in
red on Wednesday as uncertainty about the near-term outlook for the markets
kept some traders on the sidelines following recent volatility. Traders also
kept an eye on remarks by Federal Reserve Chair Jerome Powell, who participated
in a panel discussion at the European Central Bank Forum on Central Banking
alongside ECB President Christine Lagarde and Bank of England Governor Andrew
Bailey. Powell reiterated his previously shared belief that the U.S. economy is
well positioned to withstand tighter monetary policy but cautioned there's no
guarantee the Fed can engineer a soft landing. Powell said we think that there
are pathways for us to achieve the path back to 2 percent inflation while still
retaining a strong labor market. We believe we can do that. It is obviously
something that's going to be quite challenging. The Fed chief once again
declared his commitment to fighting inflation, arguing that failing to restore
price stability poses a bigger risk to the economy than tightening monetary
policy too aggressively. On the sectoral front, significant weakness was
visible among semiconductor stocks, as reflected by the 2.2 percent slump by
the Philadelphia Semiconductor Index. On the economic data front, revised data
released by the Commerce Department showed US economic activity shrank by
slightly more than previously estimated in the first quarter of 2022. The
report showed the decrease in real gross domestic product in the first quarter
was revised to 1.6 percent from the previously reported 1.5 percent. Street had
expected the drop in GDP to be unrevised.
Crude oil futures ended lower on
Wednesday even as the Energy Information Administration (EIA) released data
showing declines in US crude supplies in the past two weeks, totaling more than
three 3 million barrels, excluding oil from Strategic Petroleum Reserve. Data
covering the week ended June 17, which the EIA had delayed due to systems
issues, revealed a fall to 418.3 million barrels in crude supplies, from 418.7
million barrels the week before, implying a decline of roughly 400,000 barrels.
Data for the week ended June 24 showed a fall of 2.8 million barrels to 415.6
million barrels, compared with an average decrease of 500,000 barrels forecast
by street. Benchmark crude oil futures for August delivery fell $1.98 or 1.8
percent to settle at $109.78 a barrel on the New York Mercantile Exchange.
Brent crude for August delivery dropped $1.72 or 1.5 percent to settle at
$116.26 a barrel on London's Intercontinental Exchange.
Indian rupee continued to slide
against the American currency for the fourth day and hit yet another record
closing low on Wednesday, as worries about elevated oil prices and inflation
returned to the forefront. The sentiment remained feeble for the rupee amid
foreign fund outflows. As per stock exchange data, foreign institutional
investors (FIIs) were net sellers in the capital market on Tuesday as they
offloaded shares worth Rs 1,244.44 crore. Traders also remained anxious with a
private report that after a gap, the prices of select varieties of pulses have
started rising for the past few days due to a delay in the onset of the
southwest monsoon over major growing regions of Madhya Pradesh, Maharashtra,
and Gujarat. On the global front, dollar edged higher on Wednesday, keeping its
index against major peers nestled below a two-decade high struck two weeks ago,
with investors seeking safety in U.S. assets as stocks declined globally due to
the mounting risk of a recession. Finally, the rupee ended at 79.03
(provisional), weaker by 18 paise from its previous close of 78.85 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in both equity and debt segments. In equity segment, the gross
buying was of Rs 5334.28 crore against gross selling of Rs 6186.94 crore, while
in the debt segment, the gross purchase was of Rs 141.91 crore against gross
selling of Rs 1200.91 crore. Besides, in the hybrid segment, the gross buying
was of Rs 7.50 crore against gross selling of Rs 24.85 crore.
The US markets ended mostly lower
on Wednesday after the Federal Reserve Chairman Jerome Powell emphasized on the
central banks' hawkish stance to tame high inflation. Asian markets are trading
mostly in red on Thursday following a choppy session on Wall Street. Indian markets
halted a four-day winning streak on Wednesday, as weakness in financial and IT
shares outweighed strength in oil & gas stocks in a choppy session. Today,
domestic equity markets are likely to get flat-to-negative start tailing
weakness in global peers. Trading may remain volatile in today's session ahead
of the monthly expiry of derivative contracts. Traders will be concerned with a
private report that Inflationary pressures are likely to continue and force the
RBI to further hike interest rates during the course of the current fiscal but
the tighter financial conditions can impact growth. The report said there are
reasons to be optimistic on the growth front but factors like tighter financial
conditions can have an impact on the GDP expansion. There will be some
cautiousness with Finance Minister Nirmala Sitharaman's statement that any
increase in GST rates under the rate rationalisation exercise is intended to
make up for the inefficiencies in the value chain. Stating that all states
are aware of the potential impact of rate rationalisation on inflation,
Sitharaman said any increase in tax rates will also make up for the tax burden,
which is being borne by some other activities in that value chain. Traders may
take note of report that RBI Governor Shaktikanta Das emphasised the need for
proper interpretation of data to facilitate more informed decision making as it
will bring clarity in communication from decision makers as well as formation
of rational expectations from market participants. Meanwhile, the Securities
and Exchange Board of India's (Sebi's) board allowed foreign portfolio
investors (FPIs) to trade in exchange-traded commodity derivatives. The move,
it said, will enhance liquidity and market depth, as well as promote efficient
price discovery. There will be some buzz in the metal stocks with a private
report that after back-to-back downward corrections, steel prices are expected
to rise from July due to high input costs. Oil & gas sector stocks will be
in focus as the Union Cabinet decided to give marketing freedom to domestic
crude oil producers, allowing them to sell petroleum to any company in the
local market. There will be some reaction in coal industry stocks as India's
coal ministry said it sought assistance from the World Bank and other global
institutions for re-purposing its abandoned coal mines to make them
environmentally stable and suitable for commercial purpose.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,799.10
|
15,704.06
|
15,877.86
|
BSE
Sensex
|
53,026.97
|
52,678.16
|
53,310.32
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Oil and Natural Gas Corporation
|
1,658.60
|
153.60
|
147.40
|
158.60
|
NTPC
|
534.87
|
141.30
|
137.70
|
144.00
|
Power Grid Corporation of India
|
311.27
|
210.40
|
207.56
|
214.11
|
Coal India
|
168.56
|
188.40
|
184.61
|
191.21
|
ITC
|
160.18
|
273.35
|
270.00
|
275.85
|
Tata Steel is planning to boost the operation of Neelachal Ispat Nigam after completing acquisition, to rated capacity of 1.1 million tonne per annum within the next one year.
State Bank of India has entered into an agreement in relation to an Investment of Rs 4.03 crore in the equity shares of Perfios Account Aggregation Services.
Bajaj Finserv's subsidiary -- Bajaj Allianz General Insurance has launched Global Health Care product that aims to provide health insurance coverage to its policy holders across the world.
Renesas Electronics Company has entered into strategic partnership with Tata Motors and Tejas Networks for enhancing innovation across electronics systems for the Indian, emerging markets.