Indian equity
benchmarks ended over half percent lower on Wednesday, tracking heavy losses in
index heavyweights Larsen & Toubro, Reliance Industries and Bajaj Finserv
amid a weak trend in global markets. The markets had started with mild gains
and moved in a narrow range throughout the morning, as traders took some
support with Trade Promotion Council of India (TPCI) stating that the proposed
free trade agreement between India and the European Union would benefit
domestic exporters as EU is one of the biggest traditional markets for the
country. Traders were also energized as India's exports grew by 52.39 per cent
to $7.71 billion during the first week of this month on account of healthy
growth in shipments in sectors including engineering, gems and jewellery and
petroleum products. Some optimism also came with a private survey stating that
as India continues to maintain the momentum of its economic activities, hiring
plans are likely to become stable during the July-September 2021 quarter mainly
led by transportation and utilities and the services sector. However, the
advent of profit-booking dragged the markets lower in the afternoon session.
Traders got anxious as the World Bank slashed India's GDP forecast to 8.3 per
cent for FY22, the fiscal year starting April 2021, as against its earlier
estimate of 10.1 per cent. Besides, Union Finance Minister Nirmala Sitharaman
is all set to chair a key meeting on June 11 to review infrastructure projects.
Some concern also came as India Ratings and Research warned that the burden of
taxation, particularly indirect taxes, on households has worsened lately and is
preventing them from spending more on consumption. Finally, the BSE Sensex fell
333.93 points or 0.64% to 51,941.64, while the CNX Nifty was down by 104.75
points or 0.67% to 15,635.35.
The US markets ended lower on
Wednesday as investors largely stayed cautious and refrained from making
significant moves ahead of the much-awaited inflation data, due on Thursday.
Despite continued optimism about strong economic rebound, the mood in the
market was subdued due to concerns over rising inflation and fears about the Federal
Reserve starting discussions on tapering its asset buying program sooner than
expected. Industrials and financials were the two biggest losers among the 11
S&P 500 sectors, dragging down the broader market. Meme stock mania
continued Wednesday with day traders focusing their attention on Clean Energy
Fuels this time, pushing the stock up more than 31%. Clover Heath, which surged
over 85% in the prior session, pulled back 23% Wednesday. On the economic data front, data from the
Commerce Department showed wholesale inventories in the US rose by 0.8% from a
month earlier to $ 698.0 billion in April, after seeing a 1.2% increase in the
previous month.
Crude oil futures end marginally
lower on Wednesday after data showed a jump in US gasoline stockpiles in the
week ended June 4. The Energy Information Administration (EIA) data showed
gasoline inventories rose by 7 million barrels in the week as against forecast
for an increase of about 1 million barrels. Meanwhile, distillate stockpiles
increased by 4.4 million barrels last week, beating forecasts for a
400,000-barrel rise. However, the downside was just marginal as the official
data showed crude inventories fell for a third straight week. According to the
report released by the EIA, crude inventories in the US dropped by 5.2 million
barrels last week, higher than an expected drop of about 4.1 million barrels. Crude
oil futures for July fell $0.09 or 0.1 percent to settle at $69.96 barrel on
the New York Mercantile Exchange. August Brent crude remained unchanged to
settle at $72.22 a barrel on London's Intercontinental Exchange.
Continuing previous session
drubbing, Indian rupee concluded weaker against dollar on Wednesday. Traders were
worried as World Bank slashed India's GDP forecast to 8.3 per cent for FY22,
the fiscal year starting April 2021, as against its earlier estimate of 10.1
per cent. However, downfall remain capped as India's exports grew by 52.39 per
cent to $7.71 billion during the first week of this month on account of healthy
growth in shipments in sectors including engineering, gems and jewellery and
petroleum products. On the global front, dollar clung on to its recent small
gains on Wednesday as traders looked to upcoming U.S. inflation data and a
European Central Bank (ECB) meeting to gauge the pace of global recovery and
policymakers' thinking about paring back stimulus. Finally, the rupee ended
72.97, weaker by 8 paise from its previous close of 72.89 on Tuesday.
The FIIs as per Wednesday's data
were net buyer in equity segment, while net seller in debt segment. In equity
segment, the gross buying was of Rs 9825.56 crore against gross selling of Rs
5986.55 crore, while in the debt segment, the gross purchase was of Rs 658.17
crore with gross sales of Rs 899.12 crore. Besides, in the hybrid segment, the
gross buying was of Rs 8.82 crore against gross selling of Rs 15.52 crore.
The US markets ended lower on
Wednesday as market participants awaited inflation data for clues as to when
the US Federal Reserve might tighten its dovish monetary policy. Asian markets
are trading in green on Thursday as investors focussed on US inflation data.
Indian markets pared gains and ended lower on Wednesday as all key sectors
witnessed broad-based selling with auto, banking and metals dragging the most.
Today, the start of session is likely to be optimistic following positive cues
from Asian peers. The third straight day of daily Covid cases below 100,000 may
lend support to investor sentiment. The country reported 93,896 new infections
today, taking the total number of confirmed infections in India to 29,182,072
and deaths to 359,695. Traders will be taking encouragement with Finance
Ministry report that faster vaccine coverage and frontloading of fiscal
measures announced in this year's budget would be the major factors in boosting
the investment and consumption cycles and, in turn, reviving the economy, as
economic activities have slowed down amid the second wave of Covid-19 and
lockdowns across states. Meanwhile, trade between the two most populous nations
of the world grew to over $48 billion or 70 percent between January and May
2021. The growing trade value comes even as border issues remain an
ever-present thorn in bilateral ties. However, traders may take note of
International Zinc Association's (IZA) statement that India loses around 5-7 per
cent of its Gross Domestic Product (GDP) every year due to corrosion. There
will be some buzz in oil & gas sector stocks with a private report that
India's natural gas consumption is recovering in June after declining in the
previous two months, as states ease restrictions in the wake of a drop in
coronavirus infections. Insurance industry stocks will in focus as non-life
insurers have reported an 11.35 per cent rise in gross direct premium income in
May, over the same period last year, which was marred by a nationwide lockdown
to curb the spread of the coronavirus. Insurers collected premiums of Rs
12,316.5 crore this May, compared to Rs 11,061.02 crore in May 2020. There will
be some reaction in sugar stocks with Crisil Ratings' report that profitability
of integrated sugar mills is likely to go up by 75-100 basis points (bps) this
financial year due to high exports for the second consecutive season and
increased supplies of ethanol for blending with petrol.
Support and Resistance:
NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,635.35
|
15,534.69
|
15,768.24
|
BSE
Sensex
|
51,941.64
|
51,623.50
|
52,353.35
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Motors
|
593.34
|
343.35
|
335.76
|
354.91
|
NTPC
|
498.07
|
118.10
|
115.60
|
120.80
|
Adani
Ports and Special Economic Zone
|
312.25
|
852.60
|
822.26
|
891.96
|
Coal
India
|
304.43
|
156.40
|
153.94
|
160.14
|
Oil
& Natural Gas Corporation
|
297.18
|
124.05
|
122.06
|
127.01
|
Tata Motors has incorporated a new wholly-owned subsidiary to provide end-to-end services of operating, repair, AMC and FMS for its product range, including electric vehicles.
Karnataka Industrial Area Development Board has signed a Memorandum of Understanding with HDFC Bank.
HCL Technologies' division -- HCL Software has launched its Cloud-Native, Web and Mobile-Ready Version of Domino Application Development Platform.
Larsen & Toubro's construction arm has secured orders from prestigious clients for its various businesses.