Indian equity
benchmarks snapped their three-day winning streak and ended lower on Friday
tracking losses in index heavyweights Reliance Industries, Ultratech Cement and
SBI amid weak global cues. Markets made slightly positive start, as traders
took some support with industry chamber PHDCCI's statement that the economy is
recovering at a fast pace from the recent lows of April and May on the back of
declining new coronavirus cases, continued unlocking in various parts of the
country and calibrated economic reforms announced by the government. However,
the domestic markets soon fell into the red after the Reserve Bank of India
(RBI) kept repo rate unchanged for seventh time straight and continued with an
accommodative stance, citing the need to support ongoing growth recovery amid
continued uncertainty and global financial market volatility. The central kept
the repo rate unchanged at 4% and the reverse repo rate, the borrowing rate,
unchanged at 3.35%. Markets continued their sluggish trade in late afternoon
session, as traders remain worried with Nobel laureate economist Abhijit
Vinayak Banerjee apprehended that the impending third wave of the COVID-19
pandemic might adversely impact the GDP, and its growth rate might go down to 7
percent, even below the IMF's recent projection of 9.5 percent. Adding more
pessimism, foreign institutional investors (FIIs) stood as net sellers in the
capital market as they offloaded shares worth Rs 719.88 crore on Thursday, as
per provisional exchange data. However, losses remain capped as some optimism
remained among traders with Revenue Secretary Tarun Bajaj's statement that
Retro tax withdrawal bill will give
confidence to the investor community regarding India's stable tax regime.
Finance Minister Nirmala Sitharaman introduced The Taxation Laws (Amendment)
Bill, 2021 in the Lok Sabha that seeks to withdraw tax demands made using a
2012 retrospective legislation to tax the indirect transfer of Indian assets.
Besides, RBI retained the real GDP growth projection at 9.5 per cent for
2021-22 as domestic economic activity has started normalising with the ebbing
of the second wave of the virus and the phased reopening of the economy. In the
June monetary policy, the RBI had lowered the growth projection for 2021-22 to
9.5 per cent from 10.5 per cent estimated earlier. Finally, the BSE Sensex fell
215.12 points or 0.39% to 54,277.72, while the CNX Nifty was down by 56.40
points or 0.35% to 16,238.20.
The US markets ended mostly
higher on Friday as better than expected jobs data added to economic optimism
but also raised concerns about the outlook for monetary policy. Nasdaq pulled
back of Yesterday's record closing high, the Dow and S&P 500 reached new
record closing highs. The Labor Department released a report showing non-farm
payroll employment spiked by 943,000 jobs in July after surging by an upwardly
revised 938,000 jobs in June. Street had expected employment to jump by 870,000
jobs compared to the addition of 850,000 jobs originally reported for the
previous month. The stronger than expected job growth was partly due to sharp
increases in employment in leisure and hospitality and local government
education, which shot up by 380,000 jobs and 221,000 jobs, respectively.
Reflecting the strong job growth, the unemployment rate slid to 5.4 percent in
July from 5.9 percent in June, falling to its lowest level since March of 2020.
Street had expected the unemployment rate to dip to 5.7 percent. Meanwhile,
banking stocks moved sharply higher in morning trading, with the KBW Bank Index
surging up by 2.6 percent to its best closing level in almost two months.
Significant strength was also visible among oil service stocks, as reflected by
the 2.4 percent jump by the Philadelphia Oil Service Index. The strength in the
oil service sector came despite a decrease by the price of crude oil. Brokerage
stocks also showed a considerable move to the upside, driving the NYSE Arca
Broker/Dealer Index up by 1.7 percent On the other hand, gold stocks showed
substantial move to the downside on the day, dragging the NYSE Arca Gold Bugs
Index down by 3.8 percent. The sell-off by gold stocks comes amid a nosedive by
the price of the precious metal, with gold for December delivery plunging
$45.80 to $1,763.10 an ounce.
Crude oil futures ended sharply
lower on Friday with the commodity staging a turnaround from earlier gains
after a better-than-expected report on U.S. employment helped to deliver a
fillip to the U.S. dollar, weighing on assets priced in the currency. Headwind
in the crude oil prices came amid concerns about the outlook for global demand
amid a surge in coronavirus infections overshadowed upbeat U.S. jobs data. In
the United States, daily new COVID-19 cases have climbed to a six-month high,
with more than 100,000 infections reported nationwide. Meanwhile, the Labor
Department released a report showing non-farm payroll employment spiked by
943,000 jobs in July after surging by an upwardly revised 938,000 jobs in June.
Crude oil futures for September lost 81 cents or 1.2 percent to settle $68.28
barrel on the New York Mercantile Exchange. October Brent crude fell 59 cents
or 0.8 percent to settle at $70.70 a barrel on London's Intercontinental
Exchange.
Indian rupee ended marginally
higher against dollar on Friday, on persistent selling of the American currency
by exporters. Traders remained positive with industry chamber PHDCCI's
statement that the economy is recovering at a fast pace from the recent lows of
April and May on the back of declining new coronavirus cases, continued
unlocking in various parts of the country and calibrated economic reforms
announced by the government. Meanwhile, the RBI kept the monetary policy rate
unchanged at 4 per cent and continued with the accommodative policy stance. The
central bank pegged real GDP growth forecast for FY22 at 9.5 per cent and at
17.2 per cent for FY23. On the global front, dollar crept higher on Friday, lifted
by a rise in U.S. inflation-adjusted bond yields to one-week highs and
expectations of a strong set of employment data that could make the case for
faster U.S. policy tightening. Finally, the rupee ended 74.15, stronger by 2
paise from its previous close of 74.17 on Thursday.
The FIIs as per Friday's data
were net seller in equity segment, while net buyer in debt segment. In equity
segment, the gross buying was of Rs 8763.58 crore against gross selling of Rs
9306.55 crore, while in the debt segment, the gross purchase was of Rs 551.84
crore with gross sales of Rs 491.12 crore. Besides, in the hybrid segment, the
gross buying was of Rs 6.39 crore against gross selling of Rs 11.49 crore.
The US markets ended mostly
higher on Friday amid a positive jobs report. Asian markets are trading mostly
in green on Monday amid sharp losses in gold and oil prices, while the dollar
held near four-month highs after an upbeat US jobs report lifted bond yields.
Indian markets ended lower Friday after the Reserve Bank of India (RBI) kept
the policy rates unchanged. Today, the markets are likely to make slightly
positive start tracking gains in global markets. This week, the specifics on
important economic indicators like Industrial Production for June and CPI
inflation for July will keep markets on their feet. Both the numbers are slated
to be out on August 12. Traders will be taking encouragement as referring to
Prime Minister Narendra Modi's target of $400 billion in exports this year, the
Confederation of Indian Industry (CII) called it attainable, given the current
global situation of post-pandemic economic recovery and rising competitiveness
of Indian goods. Some support will come as Niti Aayog CEO Amitabh Kant said
India needs low-cost capital to help domestic entrepreneurs execute global
scale projects in areas like green hydrogen, solar energy, electric vehicles
and battery manufacturing, and added that there is a need to build a sustainable
country. Also, easing more Covid-19 restrictions, Maharashtra Chief Minister
Uddhav Thackeray said Mumbai's local trains will be open from August 15 to
fully vaccinated people 14 days after their second jab. Besides, seeking
incentives from the government, the Services Export Promotion Council (SEPC)
said services exports have been recording healthy growth rate consistently and
are expected to grow by 28 per cent in 2021-22 to take the exports to nearly $
266 billion. Traders may take note of Governor Shaktikanta Das' statement that
the Reserve Bank of India has to manage many conflicting objectives while
determining monetary policy, and hence its action has to be nuanced and cannot
be unidirectional. Power stocks will be in focus as according to power ministry
data India's power consumption grew 9.3 per cent in the first week of August to
28.08 billion units (BU) due to improved economic activities after easing of
lockdown curbs by states. There will be some buzz in the oil & gas sector
as the Ministry of Petroleum and Natural Gas launched the sixth round of bids
under the Open Acreage Licensing Programme (OALP). As per the report, 21
blocks, with an area of approximately 35,346 sq km are on offer to investors.
There will be some reaction in real estate industry stocks as several industry
experts said that the Reserve Bank of India's (RBI's) decision to keep key
interest rates on hold augurs well for the real estate sector as it will
further improve consumer sentiment. Meanwhile, Nuvoco Vistas Corporation, part
of the Nirma Group, and online auto classified platform CarTrade Tech will
launch their initial share-sales on Monday, August 9 while that of Aptus Value
Housing Finance and Chemplast Sanmar will be open for public subscription on
Tuesday, August 10. Markets will also enter in the last leg of earnings season,
with some 1900 companies slated to post their numbers.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
16,238.20
|
16,195.41
|
16,308.86
|
BSE
Sensex
|
54,277.72
|
54,114.18
|
54,537.43
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State Bank of India
|
382.36
|
435.65
|
430.76
|
443.76
|
Bharti Airtel
|
285.20
|
607.90
|
591.95
|
620.40
|
ITC
|
235.81
|
214.25
|
212.56
|
215.96
|
Hindalco Industries
|
180.59
|
442.15
|
435.69
|
452.24
|
Adani Port & Special Economic Zone
|
175.04
|
710.70
|
694.80
|
723.25
|
Tata Motors has signed a MoU with Common Service Centre Scheme e-Governance Services India in order to expand sales of its CV in the rural areas.
ITC's hospitality arm -- ITC Hotels has entered into partnership with the Confederation of Indian Industry.
Britannia Industries has re-launched its Milk Bikis Classic in Tamil Nadu, following an overwhelming demand from consumers.
Hindalco Industries has received approval from board of directors for downstream Flat Rolled Project at existing facilities at Hirakud and Aditya.