Indian equity benchmarks kept
swinging between the red and green zones throughout the choppy session and
closed flat with a negative bias on Thursday, amid weak global trends. Key
gauges made positive start, as traders took some support 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. Some support also came as Prime Minister Narendra Modi stating
that his government is taking measures to help micro, small and medium
enterprises (MSMEs) increase exports and is framing new policies that will help
the sector realize its potential. Traders also took a note of a report released
by Washington-based World Federation of Direct Selling Associations (WFDSA)
stated that the Indian direct selling industry has reported retail sales of
$3.25 billion in 2021 (around Rs 27,650 crore) and maintained its 12th place in
the global rankings. However, key gauges soon erased gains and turned volatile,
as exchange data showed that foreign institutional investors (FIIs) remained
net sellers in the capital market, as they sold shares worth Rs 851.06 crore on
Wednesday. Some concern also came amid reports that the Goods and Services Tax
(GST) Council's two-day meeting concluded without any decision on extending
compensation to states - for revenue loss on account of the regime's
implementation five years ago - beyond June 30. This was despite at least two
dozen states raising the issue. Adding to the pessimism, a private report
stated 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. Finally, the BSE Sensex
fell 8.03 points or 0.02% to 53,018.94 and the CNX Nifty was down by 18.85
points or 0.12% to 15,780.25.
The US markets ended lower on
Thursday amid lingering concerns about the global economic outlook and the
possibility of a recession. A report from the Commerce Department provided
further evidence of an economic slowdown, showing personal spending increased
by less than expected in the month of May. The Commerce Department personal
spending edged up by 0.2 percent in May after climbing by a downwardly revised
0.6 percent in April. Street had expected personal spending to increase by 0.5
percent compared to the 0.9 percent advance originally reported for the
previous month. Real personal spending, which excludes price changes, fell by
0.4 percent in May after rising by 0.3 percent in April. Meanwhile, MNI
Indicators released a report showing growth in Chicago-area business activity
slowed by more than expected in the month of June. The report showed the
Chicago business barometer slumped to 56.0 in June from 60.3 in May. While a
reading above 50 still indicates growth, street had expected the business
barometer to dip to 58.0. With the bigger than expected decrease, the Chicago
business barometer dropped to its lowest level since August of 2020. The
pullback by the business barometer came as the new orders index tumbled by 9.8
points to a two-year low of 49.9, while the production index slid by 5.7
points. On the sectoral front, Gold stocks moved sharply lower over the course
of the session, dragging the NYSE Arca Gold Bugs Index down by 4.3 percent to
its lowest closing level in over two years. The sell-off by gold stocks came
amid a decrease by the price of the precious metal, with gold for August
delivery falling $10.20 to $1,807.30 an ounce. Substantial weakness was also
visible among steel stocks, as reflected by the 2.4 percent slump by the NYSE
Arca Steel Index. Energy stocks also showed significant moves to the downside
as the price of crude oil for August delivery plunged $4.02 to $105.76 a
barrel.
Crude oil futures ended sharply
lower on Thursday, magnifying their previous session's losses, as a weekly
increase in U.S. gasoline and distillate supplies raised worries over
price-related demand destruction and major oil producers pledged to boost
production by 648,000 barrels a day in August, as expected. Further, oil prices
also fell as a report from the Commerce Department provided further evidence of
an economic slowdown, showing personal spending increased by less than expected
in the month of May. The Commerce Department personal spending edged up by 0.2
percent in May after climbing by a downwardly revised 0.6 percent in April. Benchmark
crude oil futures for August delivery fell $4.02 or 3.7 percent to settle at
$105.76 a barrel on the New York Mercantile Exchange. Brent crude for August
delivery dropped $1.45 or 1.3 percent to settle at $114.81 a barrel on London's
Intercontinental Exchange.
Indian rupee ended marginally
higher against dollar on Thursday, on persistent selling of the American
currency by exporters. Traders got some support, as amid the rupee declining
against the US dollar, Finance Minister Nirmala Sitharaman said the Indian
currency is relatively better placed than other global currencies against the
greenback. However, gains remain capped as some concern came with a private
report stated 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. On the global front, the
euro struggled to regain its footing on Thursday after tumbling overnight against
a resurgent U.S. dollar, which benefited from safe-haven demand on renewed
worries about higher rates and a global recession. Finally, the rupee ended at
78.97, stronger by 6 paise from its previous close of 79.03 on Wednesday.
The FIIs as per Thursday's data
were net sellers in both equity and debt segments. In equity segment, the gross
buying was of Rs 5971.77 crore against gross selling of Rs 6280.59 crore, while
in the debt segment, the gross purchase was of Rs 53.50 crore against gross
selling of Rs 113.47 crore. Besides, in the hybrid segment, the gross buying
was of Rs 11.21 crore against gross selling of Rs 10.12 crore.
The US markets ended lower on
Thursday after data showed U.S. household spending slowed in May amid
historically high inflation and elevated interest rates. Asian markets are
trading mostly in red on Friday on recession fears. Indian markets closed flat
with marginal losses on Thursday as fag-end selling wiped out intra-day gains
amid weak global trends. Today, markets are likely to get flat-to-negative
start amid weakness in global markets. Traders will be concerned as the latest
public debt management report showed that the government's total liabilities
rose 3.74 per cent to Rs 133.22 lakh crore in the March quarter from Rs 128.41
lakh crore in the three months ended December 2021. There will be some
cautiousness as the Reserve Bank said India's external debt increased by $47.1
billion to $620.7 billion in the financial year ended March 2022. More
pessimism may come as retail inflation for industrial workers rose to 6.97 per
cent in May from 6.33 per cent in April this year, mainly due to higher prices
of certain food items. Besides, the central government's fiscal deficit at the
end of May stood at 12.3 per cent of the annual budget target for 2022-23,
mainly due to higher expenditure. However, some respite may come later in the
day as the government data showed that the growth of eight core infrastructure
sectors expanded by 18.1 per cent in May against 16.4 per cent in the year-ago
period and 9.3 per cent in April 2022. Traders may take note of the Reserve
Bank of India's (RBI) statement that the Indian economy is well on the path of
recovery even though inflationary pressures and geopolitical risks warrant
careful handling and close monitoring of the situation. Besides, Finance
Minister Nirmala Sitharaman said the Indian currency is relatively better
placed than other global currencies against the greenback. Meanwhile, with an
aim to provide further clarity and transparency in the disclosure of
shareholding pattern to investors, Sebi came out with a new format for
disclosing shareholding pattern of the public shareholders. There will be some
buzz in the coffee industry stocks as Coffee Board said coffee shipments from
India, Asia's third-largest producer and exporter, rose 19 per cent to 2,24,293
tonne in the first half of the current calendar year. The country had exported 1,88,736 tonnes in
the year-ago period. India ships both robusta and Arabica varieties, besides
instant coffee. Baking stocks will be in focus as the Reserve Bank of India in
its Financial Stability Report for June said that in March 2022, the gross net
performing assets' ratio fell to a six-year low of 5.9%. Investors will watch
out monthly auto sales figures due later in the day amid hopes of revival from
chip crunch and supply disruptions to aid demand.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,780.25
|
15,709.40
|
15,870.55
|
BSE
Sensex
|
53,018.94
|
52,808.94
|
53,303.23
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Oil and Natural Gas Corporation
|
387.25
|
150.90
|
148.61
|
153.81
|
Hindalco Industries
|
212.25
|
337.70
|
333.20
|
346.05
|
Tata Motors
|
201.21
|
411.00
|
406.00
|
420.00
|
NTPC
|
192.70
|
142.60
|
141.19
|
143.99
|
ITC
|
192.62
|
272.15
|
271.20
|
273.90
|
Tata Motors' subsidiary -- Tata Technologies has joined the Foxconn-initiated MIH Consortium to promote development of sustainable mobility solutions and encourage collaboration within the industry.
UPL and Bunge have entered into a new partnership to increase productivity, profitability and sustainability for farmers in Brazil.
Tata Steel is planning to spend around Rs 1,200 crore on new technology development over the next three to four years.
Axis Bank and Airtel Payments Bank have entered into the partnership which aims to digitise the cash collection system in small cities and semi-urban regions.