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NSE Intra-day chart (09 May 2022)
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Market Commentary 10 May 2022
Benchmarks to make gap-down opening tracking weak global cues


Indian equity benchmarks ended lower by over half percent on Monday following the downtrend in global equities. Markets opened in the negative territory and stayed in red for whole day, as traders were concerned with a private report that foreign funds' ownership in domestic equities fell to pre-COVID lows and hit a multi-year low of 19.5 per cent in March this year in NSE500 companies valued at $619 billion. Investors were also cautious ahead of crucial macro-economic data such as industrial output and retail inflation reading to be out later this week. However, markets erased most of their initial losses in late afternoon deals, taking support from a periodic labour force survey by the National Statistical Office (NSO) showing that the unemployment rate for persons of 15 years and above in urban areas slipped to 8.7 per cent in October-December 2021 from 10.3 per cent in the year-ago quarter. Some solace also came with Finance Minister Nirmala Sitharaman's statement that the recent interest rate hike by the Reserve Bank was not surprising for her but the timing was, asserting that the rising cost of funds will not impact the government's planned infrastructure investments. Meanwhile, a private report stated that with the e-way bills generated for inter-state trade in goods under the Goods and Services Tax (GST) regime in April turning out to be the second highest so far, the monthly GST collections may hit Rs 1.5 trillion benchmark again in May (April transactions). Finally, the BSE Sensex fell 364.91 points or 0.67% to 54,470.67 and the CNX Nifty was down by 109.40 points or 0.67% to 16,301.85.


The US markets ended deeply lower on Monday with S&P 500 tumbling below 4,000 to the lowest level in a year, amid concerns about the outlook for the global economy. Traders seem worried aggressive moves by global central banks to contain inflation could lead to a period of stagflation or an outright recession. The extended sell-off on markets also came as traders looked ahead to the release of key inflation data in the coming days. The latest snapshot of inflation could impact expectations regarding how aggressively the Federal Reserve plans to raise interest rates. Amid the losses, the benchmark 10-year Treasury note yield hit its highest level since late 2018, trading well above 3%. On  the sectoral front, reflecting the sell-off in the energy sector, the Philadelphia Oil Service Index dove by 10.8 percent, the NYSE Arca Oil Index plummeted by 8.2 percent and the NYSE Arca Natural Gas Index tumbled by 6.7 percent. Substantial weakness was also visible among airline stocks, resulting in a 7 percent nosedive by the NYSE Arca Airline Index. With the steep drop on the day, the index ended the session at a two-month closing low. On the economic data front, wholesale inventories in the US showed another substantial increase in the month of March, according to a report released by the Commerce Department. The report showed wholesale inventories shot up by 2.3 percent in February after surging by an upwardly revised 2.8 percent in February. The spike in inventories matched the preliminary estimate as well as participant expectations. The sharp increase in wholesale inventories came as inventories of durable goods and non-durable goods jumped by 2.2 percent and 2.6 percent, respectively. The Commerce Department said wholesales also advanced by 1.7 percent in March after climbing by 1.5 percent in the previous month.


Crude oil futures ended lower on Wednesday as continued coronavirus lockdowns in China, the top oil importer, fed worries about the demand outlook. A sell-off in global markets amid rising worries about inflation, and the dollar's climb to a fresh two-decade high hurt sentiment. The move by Saudi Arabia to cut prices for buyers in Asia amid a drop in demand in China weighed as well on the commodity. Meanwhile, the dollar index surged to 104.19 in the Asian session. Despite paring gains subsequently, the index moved higher again on safe-haven appeal as global stocks tumbled. Benchmark crude oil futures for June delivery fell $6.68 or 6.1% percent to settle at $103.09 a barrel on the New York Mercantile Exchange. Brent crude for July delivery drooped $6.51 or 5.8 percent to settle at $105.88 (Provisional) a barrel on London's Intercontinental Exchange.


Rupee has ended significantly lower and touched an all-time low against the US dollar on Monday. Traders were worried as mounting concerns about inflation may trigger more aggressive rate hikes by global central banks. Further, rupee slipped on a surge in crude oil prices. Sentiments were fragile with a private report that foreign funds' ownership in domestic equities fell to pre-COVID lows and hit a multi-year low of 19.5 per cent in March this year in NSE500 companies valued at $619 billion. Meanwhile, India's central bank is intervening in all foreign-exchange markets and will continue to do so to protect the rupee that slid to a record low. On the global front, dollar climbed to a two-decade high on Monday as rising U.S. Treasury yields prompted hedge funds to add to their bullish bets while the Chinese yuan weakened below 6.77 levels after weak trade data. Finally, the rupee ended at 77.51 (Provisional), weaker by 61 paise from its previous close of 76.90 on Friday.


The FIIs as per Monday's data were net sellers in equity and debt segment both. In equity segment, the gross buying was of Rs 4950.13 crore against gross selling of Rs 9568.18 crore, while in the debt segment, the gross purchase was of Rs 519.24 crore with gross sales of Rs 2174.99 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.53 crore against gross selling of Rs 10.31 crore.


The US markets ended lower on Monday as investors rushed to protect themselves against the prospect of a weakening economy. Asian markets are trading mostly in red on Tuesday as investors shed riskier assets on worries about higher interest rates and their impact on economic growth. Indian markets extended losses to a second straight session on Monday to hit fresh two-month closing lows. Today, markets likely to continue their bearish trade with gap-down opening tracking weak global cues. There will be some cautiousness as Meghalaya Governor Satya Pal Malik said increasing inflation and unemployment are going to create a situation of crisis in the country but no leader is ready to speak on the issues. Malik, who has been critical of the Centre over issues of farmers, said the Union government could bring down prices of commodities by reducing taxes. However, some support may come later in the day as Union Finance Minister Nirmala Sitharaman said with licence quota raj prevailing during the 70 years of Congress regime, the policy change brought in by the central government under Prime Minister Narendra Modi has created new opportunities for the private sector by allowing them to manufacture products that were normally made by public sector units (PSUs). There will be some buzz in insurance industry stocks as latest data released by the Life Insurance Council showed that new business premiums (NBP) of life insurance companies jumped 84 per cent year-on-year (YoY) in April, propped up by 141 per cent increase in initial public offering-bound insurance behemoth Life Insurance Corporation (LIC) of India's NBP. Metal stocks will be in focus as Crisil in a report stated that steel prices, which have been on a song for the past two years, are finally set to correct on weak seasonality, and may trade at around Rs 60,000/tonne by the end of the current fiscal year, down from the Rs 76,000/tonne peak it scaled last month. NBFCs stocks will be in limelight with a private report that small- and medium-size finance companies serving the bottom of pyramid are hamstrung by limited supply of bank funds and need Rs 2.32 trillion in debt in the next five years. IT stocks will also be on radar amid the plummeting rupee that hit an all-time low of Rs 77.5 per dollar on Monday. In the primary market, retail wealth management firm Prudent Corporate Advisory Services' IPO will open for subscription today and close on Thursday. The company has raised Rs 159.43 crore from 24 anchor investors ahead of the offer.


Support and Resistance: NSE (Nifty) and BSE (Sensex)



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Tata Motors











  • Tata Steel has acquired 1,20,00,000, 11.25% Optionally Convertible Redeemable Preference Shares of face value Rs 10 each of TRF, aggregating to Rs 12 crore. 
  • L&T's construction arm -- L&T construction has secured repeat EPC order for Water and Effluent Treatment Business from Government of Jharkhand to execute the Masalia Ranishwar Megalift irrigation scheme on a turnkey basis.
  • HCL Technologies through its wholly-owned subsidiary is planning to acquire, a Bengaluru-based Quest Informatics - an aftermarket, Industry 4.0 and IoT company, in an all-cash deal. 
  • UPL has reported 27.48% rise in its consolidated net profit at Rs 1,735 crore for Q4FY22 as compared to Rs 1,361 crore for the same quarter in the previous year.
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