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NSE Intra-day chart (23 May 2023)
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Market Commentary 24 May 2023
Benchmarks to get pessimistic start on weak global cues

 

Indian equity benchmarks ended flat with positive bias in the volatile session on Tuesday amid weak trend in global markets. After initial up move, key gauges remained in a narrow range as traders took encouragement with a Reserve Bank of India (RBI) article stating that India's growth in the April-June quarter is likely to be driven by private consumption, supported by reviving rural demand, and renewed buoyancy in manufacturing. Some support also came as the federal finance ministry in its monthly economic review said that domestic demand will aid India's economy and help lay the foundation for the capex cycle, despite global headwinds that pose a downside risk to growth. Foreign fund inflows also aided to the markets. Foreign institutional investors (FIIs) bought shares worth Rs 922.89 crore on May 22, provisional data from the National Stock Exchange showed. However, profit booking by investors towards the end capped gains. Traders turned anxious with the finance ministry in its report stating that there are downside risks to growth and upside risks to inflation, partly channelled through the external sector and partially originating from weather uncertainties. It said consumption has shown steady and broad-based growth, while investment in capacity creation and real estate is finding traction. Traders failed to get support with Reserve Bank of India (RBI) governor Shaktikanta Das' statement that the central bank's announcement of withdrawal of Rs 2,000 notes will have very marginal impact on the economy because it constitutes only 10.8 per cent of the currency in circulation. Finally, the BSE Sensex rose 18.11 points or 0.03% to 61,981.79 and the CNX Nifty was up by 33.60 points or 0.18% to 18,348.00.

 

The US markets ended lower on Tuesday, with Nasdaq settling over one percent. A lack of significant progress in U.S. debt ceiling negotiations weighed on sentiment. U.S. President Joe Biden and House Speaker Kevin McCarthy said they held productive talks on Monday but there was no agreement on how to raise the government's $31.4 trillion debt ceiling. Traders largely shrugged off economic reports that new home sales in the U.S. unexpectedly spiked to their highest level in a year in the month of April, the Commerce Department revealed in a report released. The report said new home sales jumped by 4.1 percent to an annual rate of 683,000 in April after surging by 4.0 percent to a revised rate of 656,000 in March. Street had expected new home sales to decrease to an annual rate of 670,000 from the 683,000 originally reported for the previous month. The S&P Global US Composite PMI rose to 54.5 in May 2023, up from 53.4 the month before, a preliminary estimate showed. The latest reading signaled the fastest pace of expansion in the country's private sector since April 2022. However, the S&P Global Flash US Manufacturing PMI declined to 48.5 in May of 2023 from 50.2 in April, well below forecasts of 50, preliminary estimates showed. The S&P Global US Services PMI increased to 55.1 in May 2023, up from 53.6 the month before and well above market expectations of 52.6, a preliminary estimate showed.

 

Crude oil futures ended higher, extending previous session' gains, on warning from Saudi Arabia's energy minister that oil prices may not continue to decline and some speculation that OPEC and allies might consider another cut in production next month. Besides, hopes about U.S. lawmakers agreeing on a debt ceiling deal soon, and data showing an unexpected rise in U.S. private sector activity contributed as well to the rise in oil prices. The S&P Global US Composite PMI rose to 54.5 in May 2023, up from 53.4 the month before, a preliminary estimate showed. Benchmark crude oil futures for June delivery gained $0.86 or about 1.2 percent to settle at $72.91 a barrel on the New York Mercantile Exchange. Brent crude for July delivery rose $0. 85 or 1.1 percent to settle at $76.84 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended higher against the American currency on Tuesday. Traders got support with a Reserve Bank of India's (RBI) article stating that India's growth in the April-June quarter is likely to be driven by private consumption, supported by reviving rural demand, and renewed buoyancy in manufacturing. Some support also came as the federal finance ministry in its monthly economic review said that domestic demand will aid India's economy and help lay the foundation for the capex cycle, despite global headwinds that pose a downside risk to growth. On the global front, U.S. dollar rose for a second day on Tuesday, briefly touching a six-month peak against Japan's yen, on expectations that U.S. interest rates will remain higher for longer, while ongoing debt ceiling negotiations kept investors on edge. Among a slew of Federal Reserve heavyweights who spoke on Monday, some hinted that the central bank had further to go in tightening monetary policy. Finally, the rupee ended at 82.82 (Provisional), marginally higher by 2 paise from its previous close of 82.84 on Monday.

 

The FIIs as per Tuesday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 6960.16 crore against gross selling of Rs 5670.58 crore, while in the debt segment, the gross purchase was of Rs 503.75 crore against gross selling of Rs 236.93 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.85 crore against gross selling of Rs 20.35 crore.

 

The US markets ended lower on Tuesday as debt-ceiling negotiations saw no progress. Asian markets are trading in red on Wednesday tracking overnight losses on Wall Street. Indian markets came off highs in fag-end of the session and ended flat with positive bias on Tuesday. Today, domestic indices are likely to get pessimistic start following subdued cues from the overseas market as representatives of President Joe Biden and congressional Republicans ended another round of debt ceiling talks on Tuesday with no signs of progress. Traders will be concerned with a private report that foreign direct investment (FDI) inflows into the country fell 16% to $71 billion (on a gross basis) during 2022-23 on the back of a weak global economic situation, marking the first decline in a decade. There will be some cautiousness as Moody's said India's GDP has crossed $3.5 trillion in 2022 and will be the fastest-growing G-20 economy over the next few years, but reform and policy barriers could hamper investment. In a research report, it said bureaucracy could slow approval processes in obtaining licences and setting up businesses, prolonging project gestation. However, foreign fund inflows likely to aid domestic sentiments. Foreign institutional investors (FII) bought shares worth net Rs 182.51 crore on May 23, according to the provisional data available on the NSE. Banking stocks will be in focus with a private report that a key metric of profitability for Indian banks, lending margins, is set to get a boost as the nation's decision to withdraw its highest-value currency note bolsters bank deposits. There will be some reaction in agriculture related stocks as the Centre ruled out lifting the ban on wheat exports but said the shipments of the foodgrain through diplomatic channels will be considered on a case-to-case basis. India, the world's second-largest wheat producer, banned wheat exports in May 2022 as part of measures to control rising domestic prices. Meanwhile, Adani Group Shares are likely to remain in focus following a report that US-based GQG Partners has hiked its exposure and willingness to back any of the Adani group's new offerings. Besides, LIC, Adani Green, Nykaa, Oil India, Hindalco, Phoenix Mills, Brigade Enterprises, NALCO, are some of the prominent companies that will announce the March quarter results later in the day.

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

18,348.00

18,308.21

18,403.76

BSE Sensex

61,981.79

61,849.07

62,179.86

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support (Rs)

Resistance (Rs)

(in Lacs)

Adani Ports and Special Economic Zone

394.98

735.00

714.79

770.44

Adani Enterprises

284.33

2639.95

2440.15

2799.60

Tata Steel

213.04

105.60

105.05

106.10

ICICI Bank

165.80

951.00

944.39

958.24

State Bank of India

161.21

580.30

576.84

583.74

 

  • Tata Motors has bagged a prestigious order for 50 Magna 13.5-metre buses from Vijayanand Travels.
  • ITC has inaugurated its consumer goods manufacturing and logistics facility at Khurda, Odisha. 
  • Maruti Suzuki India has partnered with Cholamandalam Investment and Finance Company (Chola) for inventory financing for its dealer partners. 
  • Wipro has expanded partnership with Google Cloud to bring its advanced generative artificial intelligence capabilities to clients across the globe.
News Analysis