Indian equity benchmarks moved
from strength to strength throughout the day and finally settled with gains of
around a percent on Wednesday, a day ahead of Reserve Bank of India's monetary
policy decision. The major indices maintained their upward trend for the fourth
day in a row, with the Sensex rising by 582 points and the Nifty finishing 159
points higher. Key gauges opened higher as traders got encouragement after
gross direct tax collection in 2022-23 rose by around 20 per cent to Rs 19.68
lakh crore, exceeding the government's revised collection target. Sentiments
remained up-beat with Commerce and Industry Minister Piyush Goyal's statement
that the country's goods exports touched $447 billion till the last count for
2022-23 fiscal year as against $422 billion in 2021-22. Some support also came
with Credit rating agency Crisil's report stating that banks' gross non-performing
assets (NPAs) will reduce further to a decadal low of 3.8 per cent by end of
FY2023-24. The agency estimates NPAs to reduce to 4.2 per cent by end of the
just concluded FY23 as against 5.9 per cent in the year-ago period. It had
earlier estimated NPAs to come at 4 per cent by end of FY24. Markets extended
gains in late afternoon deals as sentiments remained optimistic, amid a private
report stating that the new Foreign Trade Policy (FTP) 2023, announced
recently, will help in promoting exports of sectors from e-commerce, batteries
for electric vehicles and farm equipment. Besides, another private report
stated that narrowing current account deficit will help the rupee strengthen
against the dollar and appreciate to around 79 by the second half of the current
fiscal. Foreign fund inflows also aided domestic sentiments. The National Stock
Exchange's provisional data showed foreign institutional investors (FII) bought
shares worth Rs 321.93 crore on April 3. Traders overlooked a private survey
report showing that growth in India's dominant services industry eased in the
month of March 2023 from February's 12-year high due to a softer expansion in
demand. The S&P Global India services Purchasing Managers' Index fell to
57.8 last month from 59.4 in February. But it stayed above the 50-mark
separating growth from contraction for a 20th consecutive month. Finally, the
BSE Sensex rose 582.87 points or 0.99% to 59,689.31 and the CNX Nifty was up by
159.00 points or 0.91% to 17,557.05.
The US markets ended mostly lower
on Wednesday with Nasdaq settling over one percent cut. Concerns about the
economic outlook weighed on the Nasdaq and the S&P 500 following the
release of disappointing data. Payroll processor ADP released a report showing
private sector employment increased by less than expected in the month of
March. ADP said private sector employment rose by 145,000 jobs in March after
climbing by an upwardly revised 261,000 jobs in February. Street had expected
private sector employment to advance by 200,000 jobs compared to the addition
of 242,000 jobs originally reported for the previous month. Meanwhile, a
separate report released by the Institute for Supply Management (ISM) showed
growth in U.S. service sector activity slowed by much more than expected in the
month of March. The ISM said its services PMI slid to 51.2 in March from 55.1
in February. While a reading above 50 still indicates growth in the sector,
street had expected the index to show a much more modest decrease to 54.5. On
the economic data front, brokerage stocks showed a significant move to the
downside on the day, dragging the NYSE Arca Broker/Dealer Index down by 1.9 percent.
Considerable weakness was also visible among semiconductor stocks, as reflected
by the 1.8 percent drop by the Philadelphia Semiconductor Index. The
semiconductor index continued to give back ground after ending last Friday's
trading at its best closing level in almost a year.
Crude oil futures ended marginally
lower on Wednesday despite a data showed a drop in crude inventories in the
U.S., and the production cut decision by the OPEC and allies. Data released by
Energy Information Administration (EIA) showed crude inventories fell by 3.7
million barrels in the week ended March 31. The data also showed gasoline and
distillate stockpiles dropped by 4.1 million barrels and 3.6 million barrels,
respectively last week. Benchmark crude oil futures for May delivery lost $0.10
or nearly 0.12 percent to settle at $80.61 a barrel on the New York Mercantile
Exchange. However, Brent crude for June delivery added $0.05 or 0.06 percent to
settle at $84.99 a barrel on London's Intercontinental Exchange.
Indian Rupee ended higher against
the US dollar on Wednesday as heavy buying in domestic equities bolstered
investor sentiment. Traders got support with finance ministry's statement that
gross direct tax collection in 2022-23 rose by around 20 per cent to Rs 19.68
lakh crore, buoyed by personal income tax collection. The gross tax collection
exceeded the revised estimates (RE), set on February 1, by Rs 2.41 lakh crore
or by 16.97 per cent. On the global front, dollar wallowed near two-month lows
on Wednesday after weak data supported the view that the Federal Reserve may
not need to raise rates much further, while the New Zealand dollar hit two-month
highs after a larger-than expected rate hike. Finally, the rupee ended at 82.02
(Provisional), stronger by 30 paise from its previous close of 82.32 on Monday.
The FIIs as per Wednesday's data
were net buyers in equity segment, while net sellers in debt segment. In equity
segment, the gross buying was of Rs 5009.30 crore against gross selling of Rs 4451.16
crore, while in the debt segment, the gross purchase was of Rs 1216.96 crore
against gross selling of Rs 1793.70 crore. Besides, in the hybrid segment, the
gross buying was of Rs 0.84 crore against gross selling of Rs 4.41 crore.
The US markets ended mostly in
red on Wednesday on worries of a recession triggered by contraction in services
PMI data. Asian markets are trading mostly lower on Thursday as investors await
the release of key U.S. non-farm payroll report later in the day for
directional cues. Indian markets ended higher with gains of around a percent
each on Wednesday as weak U.S. economic data curbed expectations for further
Fed tightening. Today, markets are likely to get cautious start amid lackluster
global cues and ahead of the outcome of the Monetary Policy Committee (MPC) of
the Reserve Bank of India (RBI) at around 10 A.M., followed by a press
conference at noon. There are expectations that the RBI likely to raise its
benchmark rate for the seventh consecutive meeting and leave the door open for
more increases to bring inflation back within its target range. As per a
private report, the central bank should focus on combating inflation until it
is within the tolerance level of 6 per cent, even if it pares (down) growth.
Besides, Finance ministry officials are of the view that the RBI should
prioritise bringing inflation down within the mandated range of 2-6 per cent,
even if economic growth is adversely impacted in the process. There will be
some volatility in the markets ahead of weekly F&O expiry. However, some
support may come later in the day as leading industry bodies said the Foreign
Trade Policy (FTP) for 2023 announced recently will further boost business sentiments
to reach the aspirational target of India becoming a leader in exports.
Chairman of CII national committee on exports and imports Sanjay Budhia said
that reduction in export performance threshold in the new FTP will enable
exporters to achieve reduction in transaction costs for outbound cargo.
Meanwhile, Finance Ministry has called a meeting of heads of Public Sector
Banks (PSBs) on April 13 to review progress of various financial inclusion
schemes, including Jan Suraksha and Mudra Yojana. The meeting is scheduled to
be chaired by Financial Services Secretary Vivek Joshi. Sugar industry stocks
will be in focus as industry body ISMA said India's sugar production fell 3 per
cent to 299.6 lakh tonnes in the first six months of the 2022-23 marketing year
ending September. Sugar output stood at 309.9 lakh tonnes in the corresponding
period of the previous year. There will be some buzz in the banking stocks as
RBI data showed that bank credit rose by 15 per cent year-on-year (YoY) in
2022-23 (FY23), against 9.6 per cent YoY in 2021-22 (FY22). FY23 credit growth
is highest since 2011-12, when it was 19.3 per cent.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,557.05
|
17,449.65
|
17,617.50
|
BSE
Sensex
|
59,689.31
|
59,273.44
|
59,926.16
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Steel
|
251.95
|
104.80
|
103.66
|
105.46
|
HDFC
Bank
|
216.83
|
1654.00
|
1628.00
|
1668.00
|
ICICI
Bank
|
210.69
|
885.00
|
876.75
|
890.50
|
Oil
& Natural Gas Corporation
|
158.80
|
153.15
|
151.35
|
156.15
|
State
Bank of India
|
135.75
|
523.50
|
519.16
|
527.71
|
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