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NSE Intra-day chart (06 April 2022)
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Market Commentary 07 April 2022
Benchmarks likely to get negative start amid weak global cues


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.


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  • Tata Steel has reported year-on-year fall of about 3 per cent in its consolidated steel output at 7.57 MT for Q4 of FY22, as compared to 7.80 MT of steel during Q4 FY21.
  • Larsen & Toubro's Buildings & Factories Business has secured various orders from prestigious clients. 
  • NTPC has taken up an initiative of blending of green hydrogen in Piped Natural Gas network of GGL at NTPC Kawas. 
  • Tata Motors has showcased its Electric SUV Concept - CURVV.
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