Indian equity benchmarks traded
volatile and ended lower for the second consecutive session on Wednesday, amid
worsening geopolitical situation in Europe. Moreover, rising bond yields in the
debt market also soured markets mood. Benchmark indices made a cautious start,
as traders were concerned with 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. However, markets entered green terrain in the late morning
session, taking support from chief economic adviser (CEA) V Anantha Nageswaran
said the Indian economy is better placed than other countries and the fear of
stagflation is exaggerated. Some support also came with government data showing
that 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. Key gauges managed to trade in green in
afternoon deals, as a monthly survey said that India's manufacturing sector
growth steadied in May, with new orders and production increasing at similar
rates to those registered in the previous month, while demand showed signs of
resilience and improved further despite another uptick in selling prices. The
seasonally adjusted S&P Global India Manufacturing Purchasing Managers'
Index (PMI) stood at 54.6 in May, little changed from 54.7 in April, pointing
to a sustained recovery across the sector. But, after the initial uptick, the
benchmark drifted gradually lower, amid reports that India's annual per capita
income at constant prices remained below the pre-COVID level at Rs 91,481 in
2021-22. However, the per capita income based on Net National Income (NNI) at
constant price grew by 7.5 per cent in FY22 over the previous year. Traders
overlooked the Finance Ministry stating that GST revenues bucked the two-month
rising trend in May and stood at nearly Rs 1.41 lakh crore, registering a
year-on-year increase of 44 percent. Finally, the BSE Sensex fell 185.24 points
or 0.33% to 55,381.17 and the CNX Nifty was down by 61.80 points or 0.37% to
16,522.75.
The US markets ended lower on
Wednesday after Construction spending in the US increased by less than expected
in the month of April, according to a report released by the Commerce
Department. The report showed construction spending edged up by 0.2 percent to
an annual rate of $1.745 trillion in April after rising by 0.3 percent to a
revised rate of $1.741 trillion in March. Street had expected construction
spending to climb by 0.5 percent compared to the 0.1 percent uptick originally
reported for the previous month. The modest increase in construction spending
came as spending on private construction rose by 0.5 percent to an annual rate
of $1.395 trillion. A 0.9 percent advance in spending on residential
construction was partly offset by a 0.2 percent dip in spending on
non-residential construction. Meanwhile, the report showed spending on public
construction slid by 0.7 percent to an annual rate of $350.1 billion. Meanwhile,
a majority of the twelve Federal Reserve districts have recently experienced
slight or modest economic growth, according to the central bank's Beige Book.
The Beige Book, a compilation of anecdotal evidence on economic conditions in
each of the twelve Fed districts, said four districts explicitly noted that the
pace of growth had slowed since the prior period. The slower growth comes as
retail contacts noted some softening as consumers faced higher prices, and
residential real estate contacts observed weakness as buyers faced high prices
and rising interest rates. On the sectoral front, Airline stocks turned in some
of the market's worst performances on the day, resulting in a 4.3 percent
nosedive by the NYSE Arca Airline Index. Considerable weakness was also visible
among financial stocks, with the KBW Bank Index and the NYSE Arca Broker/Dealer
Index falling by 2 percent and 1.6 percent, respectively.
Crude oil futures ended higher on
Wednesday lifted by the European Union's decision to impose a phased ban on
Russian oil, and hopes about increased energy demand from China following
easing of coronavirus restrictions in Shanghai. Meanwhile, the Organization of
the Petroleum Exporting Countries and their allies led by Russia, collectively
known as OPEC+, is scheduled to meet on Thursday to set policy. Benchmark crude
oil futures for July delivery rose 59 cents or 0.5% percent to settle at
$115.26 a barrel on the New York Mercantile Exchange. Brent crude for August
delivery gained 69 cents or 0.6 percent to settle at $116.29 a barrel on
London's Intercontinental Exchange.
Erasing previous session losses,
Indian Rupee ended fairly higher against US dollar on Wednesday. Sentiments
were upbeat with data showing that India's fiscal deficit stood at 6.7 percent
of GDP in 2021-22 on higher tax receipts and prudent expenditure, lower than
6.9 percent estimated in the national budget tabled in February. The improved
fiscal performance will reduce the extent of fiscal roll back required in the
current fiscal year compared to the last. On the global front, euro edged
further away from a one-month high on Wednesday and the U.S. dollar nudged up,
lifted by higher Treasury yields as global inflation worries flared anew. Finally,
the rupee ended at 77.52 (Provisional), stronger by 19 paise from its previous
close of 77.71 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in equity segment and net buyers in debt segment. In equity
segment, the gross buying was of Rs 45140.04 crore against gross selling of Rs 46134.71
crore, while in the debt segment, the gross purchase was of Rs 832.80 crore
against gross selling of Rs 427.50 crore. Besides, in the hybrid segment, the
gross buying was of Rs 77.85 crore against gross selling of Rs 41.77 crore.
The US markets ended lower on
Wednesday as investors bet that the latest economic data would do nothing to
push the Federal Reserve off track from its aggressive interest rate hiking
cycle aimed at taming run-away inflation. Asian markets are trading mostly in
red on Thursday tracking overnight losses on Wall Street. Indian markets
finished a volatile session in the red on Wednesday, dragged by IT and FMCG
shares though gains in financial shares limited the downside. Today, markets
are likely to open in red tracking weakness across global markets amid concerns
that latest economic data might do nothing to push the Fed off track from its
aggressive interest rate hiking cycle. Investors will also watch out for OPEC+
meeting today, to see if any likely ease in oil prices could come if the group
decides to increase production than its previous levels. Traders will be
concerned as the Ministry of Finance said the gross GST (Goods and Services
Tax) revenue for the month of May crossed over Rs 1.40 lakh crore, a 16.6 per
cent drop in comparison to April when GST collections were at a record high.
There will be some cautiousness with a private report that even as the
government is planning to put a leash on wasteful revenue spending to rein in
fiscal deficit, it has decided against trimming the record budgetary capital
expenditure target for FY23, betting big on its high multiplier effect to spur
growth. The finance ministry has asked various infrastructure ministries to
ensure they realise their capex goals and create durable assets. Meanwhile,
NITI Aayog Chief Executive Officer Amitabh Kant has said that Aadhaar has
become the bedrock for the government's welfare schemes and has saved over Rs 2
lakh crore to the government by eliminating fake and duplicate identities.
There will be some buzz in the insurance industry stocks as in a bid to improve
ease of doing business, regulator Irdai has allowed insurers to offer health
and most of the general insurance products to customers without its prior
approval. Aviation industry and hotel industry stocks will be in focus as Jet
fuel prices were cut by 1.3 per cent -- the first reduction after 10 rounds of
price hikes -- on softening international crude oil rates. Simultaneously,
prices of commercial LPG - used by business establishments such as hotels and
restaurants - were reduced by Rs 135 per 19-kg cylinder. There will be some
reaction in FMCG industry stocks with a private report that the FMCG industry
saw decline in volume in the January-March period as consumption was impacted
by price increases, especially in the food and essentials categories. Railways
stocks will be in limelight with report that fuelled by demand for coal and
cement, the railways ferried 131.7 million tonnes (mt) of raw materials and
goods in May, earning a revenue of Rs 14,113 crore. The revenue earned is 22
per cent higher than the corresponding period last year.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
16,522.75
|
16,424.66
|
16,635.01
|
BSE
Sensex
|
55,381.17
|
55,051.23
|
55,751.29
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Coal India
|
308.67
|
196.80
|
194.24
|
198.34
|
Oil & Gas corporation of India
|
227.80
|
150.10
|
148.26
|
152.41
|
NTPC
|
160.84
|
157.05
|
155.46
|
159.41
|
ITC
|
146.99
|
271.50
|
269.76
|
273.66
|
Hindalco Industries
|
125.51
|
410.40
|
403.74
|
419.54
|
Coal India's coal production has increased by 30% to 54.7 million tonnes in May 2022 as against 42.1 MT in May 2021.
Oil and Natural Gas Corporation is eyeing 11% rise in crude oil production and 25% jump in natural gas output after newer discoveries in the western and eastern offshore start producing.
NTPC has come out with its biodiversity policy 2022 for conservation and restoration of a balanced ecosystem.
HCL Technologies' wholly owned subsidiary -- HCL Technologies UK has completed the acquisition of 100% stake in Confinale AG.