Indian equity
benchmarks settled lower for a second straight session on Wednesday tracking
weakness across global markets against the backdrop of hawkish comments from US
Federal Reserve officials and further sanctions against Russia. Key gauges made
a gap-down opening and stayed in red for whole day, as traders got anxious with
a private report stating that the Reserve Bank of India will delay its first
interest rate rise by at least four months to August at the earliest, as the
central bank must now start worrying about inflation. Besides, continuous rise
in petrol and diesel prices weighed down on the market sentiments. Oil
companies increased the price of petrol and diesel in Delhi by 80 paise each,
marking the 14th such hike in two weeks. Petrol costs Rs 105.41 and diesel Rs
96.67 per litre after the hike. Some concern also came with private report
stated that foreign portfolio investors dumped Indian shares worth record Rs
1.4 lakh crore in the financial year 2021-22, after pumping in whopping Rs 2.7 lakh
crore in the preceding fiscal, mainly on account of sharp surge in coronavirus
cases, concerns over the risk to economic recovery and global turmoil triggered
by Russia-Ukraine war. Traders failed to get any sense of relief with a private
survey showed India's services sector expanded at its fastest pace so far this
year in March as an easing of COVID-19 restrictions boosted demand, but
elevated inflationary pressures clouded business confidence. The S&P Global
India Services Purchasing Managers' Index rose to 53.6 in March from 51.8 in
February. The index remained above the 50-mark separating growth from
contraction for an eighth straight month, input costs rose at the sharpest pace
in 11 years. Market participants
overlooked report Asian Development Bank projected a 7% collective growth for
South Asian economies in 2022 with the subregion's largest economy India
growing by 7.5% in the current fiscal year before picking up to 8% the next
year. Finally, the BSE Sensex fell 566.09 points or 0.94% to 59,610.41 and the
CNX Nifty was down by 149.75 points or 0.83% to 17,807.65.
The US markets ended lower on
Wednesday, extending the significant downward move seen in the previous
session, after the Federal Reserve gave more guidance on how fast it will
tighten monetary policy to fight inflation, raising concerns it may slow the
economy. The Fed's release of its meeting minutes indicated that officials
generally agreed it should shrink its balance sheet by $95 billion per month.
The minutes also showed central bank officials were considering larger rate
hikes than the usual 25-basis-point, or quarter-point, increments. The minutes
stated many participants noted that - with inflation well above the Committee's
objective, inflationary risks to the upside, and the federal funds rate well
below participants' estimates of its longer-run level - they would have
preferred a 50 basis point increase in the target range for the federal funds
rate at this meeting. The weakness on markets also comes amid concerns about
the impact of additional sanctions against Russia. Citing Russian atrocities in
Ukraine, the White House announced a ban on new investment in Russia, severe
financial sanctions on Russia's largest bank and sanctions on Russian elites
and their family members, including President Vladimir Putin's adult children.
On the sectoral front, Airline stocks turned some of the market's worst
performances on the day, resulting in a 3.5 percent nosedive by the NYSE Arca
Airline Index. Considerable weakness was also visible among brokerage stocks,
as reflected by the 3.1 percent slump by the NYSE Arca Broker/Dealer Index.
Semiconductor, housing and computer hardware stocks also saw notable weakness.
Crude oil futures ended deeply in
red on Wednesday, extedning their previous session's losses, following a
surprising rise in US crude stocks. Data
released by EIA showed crude inventories in the US rose by 2.421 million
barrels in the week ended April 1. Besides, oil prices also fell after news
that large consuming nations would also release oil from reserves in
conjunction with the United States to counter supply worries. Member states of
the IEA will release 120 million barrels from strategic reserves, including 60
million from the United States. That US 60 million commitment is part of
Washington's plans to release a million barrels a day for the next six months
for a rough total of 180 million barrels. Benchmark crude oil futures for May
delivery fell $5.73 or 5.6 percent to settle at $96.23 a barrel on the New York
Mercantile Exchange. Brent crude for June delivery dropped $4.70 or 4.5 percent
to settle at $101.94 a barrel on London's Intercontinental Exchange.
Erasing previous session gains,
Indian rupee ended considerably lower against dollar on Wednesday on emergence
of demand for the greenback from importers. Prospects of aggressive rate hikes
by the U.S. Federal Reserve weighed on investors' sentiment. Federal Reserve
Governor Lael Brainard stated that the central bank can raise interest rates
more aggressively to dampen the high rate of inflation felt by Americans. FOMC
minutes from the March meeting will be released today. Also, oil marketing
companies in India continued to increase pump prices on the back of higher
global crude prices, sparking worries of an acceleration in inflation also
dented traders' sentiment. On the global front, euro fell on Wednesday to its
lowest level in one month against a strengthening dollar as the prospect of new
Western sanctions on Russia added pressure to the European currency. Finally,
the rupee ended at 75.82 (Provisional), weaker by 53 paise from its previous
close of 75.29 on Tuesday.
The FIIs as per Wednesday's data
were net buyers in both equity and debt segment. In equity segment, the gross
buying was of Rs 10352.79 crore against gross selling of Rs 6866.08 crore,
while in the debt segment, the gross purchase was of Rs 1085.23 crore against
gross selling of Rs 873.67 crore. Besides, in the hybrid segment, the gross
buying was of Rs 3.59 crore against gross selling of Rs 8.52 crore.
The US markets ended lower on
Wednesday after FOMC minutes bring back focus on aggressive tightening of
COVID-era monetary policy. Asian markets are trading mostly in red on Thursday
following weakness on Wall Street, fuelled by tech and other growth stocks.
Indian markets continued to decline for a second straight day on Wednesday,
dragged by the HDFC twins and other private sector financial stocks. Today,
markets are likely to start session on a negative note mirroring weak global
cues. There will be some cautiousness with a private report that the yield on
the 10-year government bond inched up to nearly 7 per cent ahead of the Reserve
Bank of India's (RBI) monetary policy review scheduled for Friday on fears that
the central bank may raise the inflation forecast. However, some support may
come later in the day as a working paper by the International Monetary Fund
(IMF) stated that extreme poverty in India was as low as 0.8% in 2019 and the
country managed to keep it at that level in 2020 despite the unprecedented
Covid-19 outbreak, by resorting to food transfers through the Pradhan Mantri
Garib Kalyan Yojana (PMGKY). Traders may take note of report that the Centre's
gross tax receipts (GTR) grew by as much as a third on year in 2021-22, the
sharpest growth in any year in recent decades if not in recorded history,
representing an impressive tax buoyancy of 1.6. Meanwhile, Commerce and
Industry Minister Piyush Goyal said that India and Australia should look at
boosting the bilateral trade to $100 billion by 2030 from the current level of
around $27.5 billion. Besides, Capital markets regulator Sebi has issued fresh
guidelines for KYC Registration Agencies (KRAs) whereby such agencies will have
to independently validate KYC records of all clients from July 1. Agriculture
industry stocks will be in focus with report that India's exports of
agricultural products, including marine and plantation products, for 2021-22
hit a record at $50 billion. That was up 20% on year. As per the provisional
figures released by DGCIS, the export growth has been achieved mostly because
of a surge in shipments of rice, marine products, sugar, buffalo meat, raw
cotton and wheat. There will be some reaction in power stocks amid reports of
rising electricity consumption in the country. An early onset of summer coupled
with rising demand from businesses with Covid-led restrictions being withdrawn
across the board also raised the demand for power.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,807.65
|
17,758.00
|
17,879.15
|
BSE
Sensex
|
59,610.41
|
59,432.97
|
59,864.70
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
NTPC
|
527.37
|
153.00
|
149.10
|
156.10
|
Coal India
|
461.57
|
193.80
|
189.06
|
197.76
|
Tata Motors
|
249.74
|
456.50
|
451.84
|
461.94
|
ITC
|
195.97
|
260.00
|
257.09
|
263.14
|
State Bank of India
|
137.38
|
512.75
|
507.44
|
516.64
|
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