Indian equity benchmarks snapped
their 3-day winning streak to end lower in a highly volatile session on
Tuesday, as investors are eyeing GDP numbers for the fourth quarter of the
previous fiscal year (2021-22) to be out later in the day. As per the
expectations, India's economy likely slowed in the fourth quarter and is
expected to grow between 3.5-5.5 percent. Markets made gap-down opening, as
traders were anxious with domestic ratings agency India Ratings stating that
the GST has not helped states achieve the key objective of boosting their tax
revenue. The rating agency said that the data does not point to any benefits to
the states in the last five years since the implementation of GST (Goods and Services
Tax). However, key indices managed to trim most of their losses in afternoon
deals, taking support from secretary at the department of economic affairs,
Ajay Seth's statement that India's inflation should ease in the coming months
following steps taken by the Union government and as global prices coming off
in May will have a salutary impact. Though, markets failed to hold on to
recovery mode and fell sharply in late afternoon deals, as some pessimism
remained among traders with private report stated that soaring prices and the
subsequent hit to consumer spending and investments are likely to further
dampen India's economy, as the central bank faces a finely balanced struggle to
tame inflation via rate hikes without hurting economic growth. Some concern
also came amid a private report stating that India's economy probably grew
slower than previously estimated last year, with virus curbs in the final
quarter seen as a drag on activity while the war in Europe has added a new
inflation hurdle to recovery. Meanwhile, Department of Financial Services (DFS)
secretary Sanjay Malhotra has said that advance action is underway for
privatisation of two public sector banks (PSBs) in pursuance of the
announcement made by finance minister Nirmala Sitharaman. Finally, the BSE
Sensex fell 359.33 points or 0.64% to 55,566.41 and the CNX Nifty was down by
76.85 points or 0.46% to 16,584.55.
The US markets ended lower on
Wednesday as concerns about soaring inflation and looming policy tightening by
the Federal Reserve rendered the mood bearish. Federal Reserve governor
Christopher Waller said that he favored 50 basis point hike at every meeting
until there is a substantial reduction in inflation. Further, sentiments were
weak after a report released by the Conference Board showed a modest decrease
in US consumer confidence in the month of May. The Conference Board said its
consumer confidence index dipped to 106.4 in May from an upwardly revised 108.6
in April. Streel had expected the consumer confidence index to drop to 104.0
from the 107.3 originally reported for the previous month. The report showed
the present situation index fell to 149.6 in May from 152.9 in April, while the
expectations index declined to 77.5 from 79.0. On the sectoral front, Energy
stocks shed ground after oil prices pared early gains and drifted lower on
reports some OPEC members are in favor of suspending Russia's participation in
the oil-production deal. In the stock specific developments, Johnson &
Johnson, Honeywell International, Boeing and 3M shed about 2 to 2.8 percent in
the session. Merck, Coca-Cola, Cisco Systems, American Express, JP Morgan
Chase, Visa, Caterpillar and McDonalds also ended notably lower.
Crude oil futures ended lower on
Tuesday after private report stated that some members of
the Organization of the Petroleum Exporting Countries were weighing exempting
Russia from oil-production targets, which would allow other countries to pump
more crude. However, a drop in coronavirus cases in Beijing and improved
Chinese PMI data raised hopes that energy demand in the world's second largest
economy will pick up and contributed significantly to the uptick in oil prices.
Benchmark crude oil futures for July delivery fell 40 cents or 0.35% percent to
settle at $114.67 a barrel on the New York Mercantile Exchange. However, Brent
crude for July delivery gained $1.17 or 1 percent to settle at $122.84 a barrel
on London's Intercontinental Exchange.
Indian rupee depreciated significantly
against dollar on Tuesday, on account of sustained dollar demand from importers
and banks. Traders were anxious with private report stated that soaring prices
and the subsequent hit to consumer spending and investments are likely to
further dampen India's economy, as the central bank faces a finely balanced
struggle to tame inflation via rate hikes without hurting economic growth. Some
concern also came amid a private report stating that India's economy probably
grew slower than previously estimated last year, with virus curbs in the final
quarter seen as a drag on activity while the war in Europe has added a new
inflation hurdle to recovery. On the global front, euro's losses deepened on
Tuesday after data showing eurozone inflation hit a record high in May, but
expectations the European Central Bank will soon hike rates kept the single
currency on track for its best monthly performance in a year. Finally, the
rupee ended at 77.68 (Provisional), weaker by 14 paise from its previous close
of 77.54 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 9252.95 crore against gross selling of Rs 6971.74 crore, while
in the debt segment, the gross purchase was of Rs 758.26 crore against gross
selling of Rs 383.33 crore. Besides, in the hybrid segment, the gross buying
was of Rs 16.55 crore against gross selling of Rs 13.08 crore.
The US markets ended lower on
Tuesday as volatile oil markets kept soaring inflation in focus and investors
reacted to hawkish comments from a Federal Reserve official. Asian markets are
trading mixed on Wednesday with investors watching for market reaction to the
release of a private survey on Chinese factory activity for May. Indian markets
snapped a three-day gaining streak on Tuesday amid tepid global mood. Today,
the start of session is likely to be negative amid lackluster global cues.
Investors will closely monitor the manufacturing PMI data for May, which will
be released later in the day. Traders will be concerned as the government data
showed that India's economic growth hit a four-quarter low of 4.1%, partly
driven by base effect. The growth was 20.1%, 8.4%, and 5.4%, in the first,
second and third quarters, respectively. Some cautiousness may be come as foreign
Institutional Investors (FII) were once again net sellers of domestic stocks.
FIIs pulled out Rs 1,003 crore from Dalal Street. However, some support may
come later in the day as chief economic adviser (CEA) V Anantha Nageswaran said
the Indian economy is better placed than other countries and the fear of
stagflation is exaggerated. Traders may be taking encouragement as production
growth of eight infrastructure sectors rose to a six-month high of 8.4 per cent
in April on the back of better performance by coal, refinery products and
electricity segments. Traders may take note of India Meteorological Department
Director General Mrutyunjay Mohapatra's statement that the average rainfall
this monsoon season is expected to be 103% of the long period average. India
can expect more rainfall this monsoon season than predicted earlier. In April,
the IMD had said the country would receive normal rainfall -- 99% of the long
period average. Besides, Fiscal deficit for 2021-22 improved to 6.71 per cent
of the GDP over the revised budget estimate of 6.9 per cent mainly on account
of higher tax realisation. Sugar stocks will be in focus as the data released
by cooperative body NFCSFL showed that sugar production in India, the world's
largest producer and second-largest exporter, rose 15 per cent to a record
35.24 million tonne till May 30 in the ongoing 2021-22 marketing year on higher
output in Maharashtra and Karnataka. There will be some reaction in edible oil
industry stocks as the government said India has slashed the base import prices
of crude and refined palm oil, while raising the price of crude soyoil. Textile
industry stocks will be in limelight as the government said India recorded its
highest-ever textiles and apparel exports in the financial year 2021-22 at
$44.4 billion.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
16,584.55
|
16,507.39
|
16,676.24
|
BSE
Sensex
|
55,566.41
|
55,315.16
|
55,871.64
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
NTPC
|
1,246.65
|
157.60
|
152.64
|
160.29
|
Oil & Gas corporation of India
|
576.75
|
151.55
|
146.96
|
154.56
|
Bharti Airtel
|
445.93
|
704.90
|
696.14
|
710.14
|
Hindalco Industries
|
391.15
|
427.00
|
416.50
|
433.00
|
Reliance Industries
|
325.91
|
2,623.60
|
2,599.94
|
2,663.04
|
M&M has planned the sale of its 2.76 percent stake in TVS Automobile Solutions.
Power Grid Corporation of India has acquired Mohanlalganj Transmission, the Project SPV to establish Intra State Transmission System.
The government has allocated a project worth Rs 847.95 crore to Bharti Airtel for providing 4G mobile services in uncovered villages of aspirational districts.
Sun Pharmaceutical Industries is eyeing high single-digit top-line growth in the current financial year with all its business verticals well placed to lead the charge.