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NSE Intra-day chart (11 May 2022)
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Market Commentary 12 May 2022
Markets to make negative start ahead of IIP, CPI data


Indian equity benchmarks extended their fall for the fourth straight session amid choppy trade on Wednesday, as participants waited IIP (Index of Industrial Production) and CPI (Consumer Price Inflation) data, due to be released tomorrow.  The indices started higher but soon gave up all of their respective gains, as traders turned worried as data released by the RBI showed that India's outward foreign direct investment (OFDI) nearly halved to $3.39 billion in April on an annual basis. The OFDI stood at $6.71 billion in April 2021. Some cautiousness came in with a private report that the goods and services tax (GST) council is mulling a 28 per cent tax on crypto currencies, at par with the current GST on casinos, betting and lottery. Traders also took a note of ICRA Ratings' report that in spite of a sharp 40 per cent decline in bond issuances, states have been forced to pay more for their market borrowings as the weighted average interest rate touched a record 7.69 per cent at the latest auctions of state government securities. Benchmarks extended losses in afternoon deals, as sentiments were fragile as foreign investors have sold Indian equities worth $1.82 billion so far this month, shedding stocks worth $374 million in the fourth straight day of net selling on May 10. Traders were also cautious after private report stated that a majority of the Indian consumers are bullish about their financial situation in the next one year, but have raised concerns over rising cost of goods and services, which is affecting their purchasing decisions. Moreover, uncertainty around managing rising living costs is driving over 80 per cent in India to save more money. However, key gauges managed to pare some losses in final minutes of trade, taking support from Union Minister Anupriya Patel stating that India was expected to conclude free trade agreements with the United Kingdom, Canada, and the European Union before this year-end. Finally, the BSE Sensex fell 276.46 points or 0.51% to 54,088.39 and the CNX Nifty was down by 72.95 points or 0.45% to 16,167.10.


The US markets ended deeply in red on Wednesday as traders digested a highly anticipated Labor Department report showing the annual rate of consumer price growth slowed by less than expected. While the report showed the annual rate of consumer price growth slowed to 8.3 percent in April from a 40-year high of 8.5 percent in March, Street had expected the pace of growth to slow to 8.1 percent. The annual rate of growth in core consumer prices also slowed to 6.2 percent in April from 6.5 percent in March, although the rate was expected to decelerate to 6.0 percent. On a monthly basis, the Labor Department said its consumer price index rose by 0.3 percent in April after surging by 1.2 percent in March. Street had expected prices to edge up by 0.2 percent. Core consumer prices, which exclude food and energy prices, climbed by 0.6 percent in April after rising by 0.3 percent in March. Core prices were expected to increase by 0.4 percent. The data added to recent concerns the Federal Reserve will raise interest rates more aggressively in an effort to bring inflation down at a faster rate. Traders have recently expressed concerns more aggressive moves by the Fed and other central banks could lead to a period of stagflation or an outright recession. On the sectoral front, Computer hardware stocks moved sharply lower over the course of the session, dragging the NYSE Arca Computer Hardware Index down by 3.8 percent to its lowest closing level in well over a year. Substantial weakness also emerged among housing stocks, as reflected by the 3.4 percent nosedive by the Philadelphia Housing Sector Index. The index also ended the session at a more than one-year closing low.


Crude oil futures ended higher on Wednesday   rebounding sharply from recent losses, thanks to data showing a significant drop in flows of Russian gas to Europe, and news about Chinese government's fresh stimulus measures. Further, reports suggesting that Covid-19 infections dropped in Shanghai and Beijing contributed as well to the rise in oil prices. Meanwhile, data from the Energy Information Administration (EIA) showed US crude stockpiles rose by more than 8 million barrels in the week ended May 6, due to another large release from strategic reserves. Benchmark crude oil futures for June delivery surged $5.95 or 6% percent to settle at $105.71 a barrel on the New York Mercantile Exchange. Brent crude for July delivery rose $4.41 or 4.3 percent to settle at $106.87 (Provisional) a barrel on London's Intercontinental Exchange.


Indian Rupee ended fairly higher on Wednesday as the American currency retreated from its 20-year high levels. Sentiments were upbeat with Union Minister Anupriya Patel's statement that India was expected to conclude free trade agreements with the United Kingdom, Canada, and the European Union before this year-end. Traders shrugged off data released by the RBI showing that India's outward foreign direct investment (OFDI) nearly halved to $3.39 billion in April on an annual basis. The OFDI stood at $6.71 billion in April 2021. Also, market participants remained cautious ahead of the inflation number that will be released on Thursday. On the global front, dollar held close to a two-decade high on Wednesday as investors waited for the latest U.S. inflation data to assess how aggressively the Federal Reserve will have to tighten monetary policy to keep rising prices in check. Finally, the rupee ended at 77.24 (Provisional), stronger by 10 paise from its previous close of 77.34 on Tuesday.


The FIIs as per Wednesday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 6078.84 crore against gross selling of Rs 9554.91 crore, while in the debt segment, the gross purchase was of Rs 131.91 crore against gross selling of Rs 1688.74 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.68 crore against gross selling of Rs 11.18 crore.


The US markets ended lower on Wednesday led by a sharp drop in the Nasdaq, after US inflation data did little to ease investor worries over interest rates. Asian markets are trading mostly in red on Thursday tracking overnight losses on Wall Street. Indian markets failed to stay in the green and ended lower on Wednesday amid a rebound in oil prices in international markets. Today, markets are likely to make negative start mirroring weak global cues. Investors will closely track the Index of Industrial Production (IIP) data for March and crucial retail inflation (CPI) reading for April, which will be released later today. Traders will be concerned with private report that tightening of policy rates by major central banks, including the RBI, would adversely impact demand in the next 6-8 months and slow down the recovery process. There will be some cautiousness with a private report that India's central bank is likely to raise its inflation projection for the current fiscal year at its June monetary policy meeting and will consider more interest rate hikes. Some pessimism may come as a private report lowered its forecasts for India's economic growth in the next two fiscal years, saying a global slowdown, surging oil prices and weak domestic demand would take a toll on Asia's third-largest economy. Besides, as per provisional data available on the NSE, foreign institutional investors (FIIs) have net sold shares worth Rs 3,609.35 crore. Traders may take note of a private report that India Inc will hire 5 per cent more people in the April-June period compared to the first quarter (Q1) this year, as Covid infections decrease amid reopening of industries across the spectrum. Meanwhile, to strengthen the regulatory framework for collective investment schemes, markets regulator SEBI has enhanced the net worth criteria and track record requirements for entities managing such schemes. Auto industry stocks will be in focus as industry body SIAM said passenger vehicle dispatches from factories to dealers in the domestic market declined by 4 per cent in April as supply side challenges continued for the automotive industry. Total passenger vehicle domestic wholesales stood at 251,581 units last month as compared to 261,633 units in April 2021. There will be some reaction in tyre industry stocks with CRISIL's report that the capital expenditure of tyre makers is expected to increase to around Rs 5,000 crore this fiscal on the back of improving demand, as against around Rs 3,700 crore annually in the preceding two fiscals. It added that the demand is likely to be driven by segments such as replacement, commercial and passenger vehicles (CVs and PVs), along with exports. There will be lots of earnings reaction based on the performance of the companies.


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



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NSE Nifty




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Nifty Top volumes





Previous close (Rs)

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(in Lacs)

Tata Motors





Coal India










Oil & Natural Gas Corporation





State Bank of India






  • Tata Motors has expanded its electric vehicle range in the country with the launch of Nexon EV MAX, priced between Rs 17.74-19.24 lakh (ex-showroom). 
  • State Bank of India's board has approved a proposal to raise $2 billion long-term fund in the current financial year. 
  • ICICI Bank has signed a MoU with Santander UK Plc, a premier British bank, for collaboration towards the banking requirements of UK corporates operating in India. 
  • L&T's SWC business and VMware Inc, have inked a strategic partnership to accelerate the adoption of digital infrastructure solutions across industries.
News Analysis