Indian equity
benchmarks ended lower for second straight session on Friday, tracking the
decline in global peers amid concerns that the spread of covid variants could
disrupt economic recovery. The benchmarks opened lower and traded with a
negative bias throughout the day, as traders got anxious with a private report
that southwest monsoon has practically stalled over most parts of the country
since June 19. This has not only delayed its progress over north India but has
also badly impacted the sowing of the kharif crop. Some concern also came amid
reports that inflows into equity mutual funds dropped sharply by 40 per cent to
Rs 5,988 crore in June on profit booking by investors as stock markets witnessed
sharp rallies in recent times. In comparison, the equity mutual funds saw a net
inflow to the tune of Rs 10,083 crore in May, the highest fund infusion in 14
months, data from the Association of Mutual Funds in India showed on Thursday.
Benchmarks continued their weak trade in afternoon session, as foreign
institutional investors (FIIs) stood as net sellers in the capital market as
they offloaded shares worth Rs 554.92 crore on Thursday, as per provisional
exchange data. Traders also got worried after Care Ratings' report said that
significant rise in prices of petrol and diesel in many Indian states,
commodities such as edible oils, foodgrain, vegetables are seeing some
inflation too. High petrol and diesel prices impact Wholesale Price Index (WPI)
and Consumer Price Index (CPI), pushing up commodity prices, and that can be
more damaging. The impact of fuel price hike is such that it percolates into
prices of other goods by way of transport, logistics and freight costs.
However, markets recouped some losses ahead of the closing bell as some support
came from Industry chamber PHDCCI's statement that the gradual receding of the
second wave of the COVID-19 pandemic has created scope for the economy to
recover from the daunting impact witnessed in April and May 2021. Finally, the
BSE Sensex fell 182.75 points or 0.35% to 52,386.19, while the CNX Nifty was
down by 38.10 points or 0.24% to 15,689.80.
Wiping out the previous session
losses, the US markets ended sharply higher on Friday as traders quickly shrugged
off the concerns about the global economy that weighed on the markets in early
trading on Thursday. The major averages reached new highs for the session going
into the close. Despite worries about the spread of the delta variant of the
coronavirus, traders seem optimistic the US economy will continue to
outperform. A rebound by treasury yields also generated buying interest, with
the yield on the benchmark ten-year note bouncing off its lowest closing level
since February. Yields had fallen sharply in recent sessions amid indications
the Federal Reserve is not in a hurry to begin scaling back its asset purchase
program. On the sectoral front, steel stocks turned in some of the market's
best performances on the day, resulting in a 4.1 percent spike by the NYSE Arca
Steel Index. The rebound by treasury yields also contributed substantial
strength among banking stocks, driving the KBW Bank Index up by 3.9 percent.
Oil service stocks also moved sharply higher over the course of the session,
resulting in a 2.8 percent spike by the Philadelphia Oil Service Index. The
index bounced off its lowest closing level in over a month. The rally by oil
service stocks came amid sharp increase by the price of crude oil. Meanwhile,
traders were looking ahead to the reports on consumer and producer price
inflation, industrial production and retail sales in next week.
Extending gains from the previous
session, crude oil futures settled higher on Friday, as the commodity continued
to benefit from data showing a bigger than expected drop in U.S. crude
inventories last week. Data released by US Energy Information Administration
(EIA) on Thursday showed crude inventories in the country fell by 6.866 million
barrels last week, far more than the expected drop of about 4.03 million
barrels, thanks to the ongoing recovery in consumption that's underpinned this
year's crude rally. Traders overlooked concerns about possible excess supply in
the market in the near term following the Organization of the Petroleum
Exporting Countries and their allies failing to agree on output policy.
Meanwhile, according to a report released by Baker Hughes, the number of oil
and gas rigs in the United States increased by 4 this week to 479, up 221 from
the same time last year. Oil rig count rose by 2 to 378, while the number of
gas rigs increased by 2 to 101. Crude oil futures for August rose $1.62 or
about 2.2percent to settle at $74.56 barrel on the New York Mercantile
Exchange. September Brent crude gained $1.43 or nearly 2 percent to settle at
$75.55 a barrel on London's Intercontinental Exchange.
Indian rupee ended higher against
dollar on Friday, on the back of selling of the American currency by exporters.
Traders were getting support with Industry chamber PHDCCI stating that the
gradual receding of the second wave of the COVID-19 pandemic has created scope
for the economy to recover from the daunting impact witnessed in April and May
2021. However, gains remain capped as some cautiousness came in with a private
report that Southwest monsoon has practically stalled over most parts of the
country since June 19. This has not only delayed its progress over north India
but has also badly impacted the sowing of the kharif crop. On the global front,
dollar fell on Thursday from a three-month high against a basket of peers, with
the euro getting a boost as investors unwound bets on risky currencies and as
concerns over the spread of COVID variants increased the demand for safe
havens. Finally, the rupee ended 74.63, stronger by 8 paise from its previous
close of 74.71 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 5295.98 crore against gross selling of Rs
5936.79 crore, while in the debt segment, the gross purchase was of Rs 424.56
crore with gross sales of Rs 322.98 crore. Besides, in the hybrid segment, the
gross buying was of Rs 20.01 crore against gross selling of Rs 14.21 crore.
The US markets ended higher on
Friday as financials and other economically focused sectors rebounded after a
selloff sparked by growth worries earlier in the week. Asian markets are
trading in green on Monday as record highs on Wall Street and policy easing in
China helped calm some of the recent jitters on global growth, though plenty of
potential pitfalls lay ahead this week. Indian markets fell for the second day
in a row on Friday pushing the Nifty50 below 15700 levels amid cautious global
sentiment. Today, the markets are likely to make firm opening following strong
global cues. Traders will be taking encouragement as Niti Aayog Vice Chairman
Rajiv Kumar the economy will register a double-digit growth in the current
fiscal and the disinvestment climate also looks better, with India's story
remaining very strong. He also asserted that the country is prepared in a far
better manner in case there is a Covid wave as states have also their own
lessons from the previous two waves. Some support will come as the
Confederation of Indian Industries (CII) Chief Executive Officers (CEOs) poll
of 119 top corporates showed that recovery from the second wave of the pandemic
in April-May is expected to be swifter as compared to the first wave in 2020.
Traders may take note of report that India has recorded 37,676 fresh cases
taking the total caseload to 30,873,907, according to Worldometer. The death
count increased to 408,792 with 720 new fatalities, the data showed. Meanwhile,
after reaching a historic high, the diesel prices decreased by 15 to 17 paise
on July 12. However, the price of petrol were hiked again by 25 to 34 paise on
the day, taking the prices across the country to another high. There will be
some buzz in oil & gas industry stocks with data from the Petroleum
Planning and Analysis Cell (PPAC) of the Ministry of Petroleum and Natural Gas
showing that India's fuel consumption rose 1.5 percent to 16.33 million tonnes
in June from a year earlier and by 8 percent over May 2021. Power stocks will
be in focus as power ministry data showed that India's power consumption grew
nearly 18 per cent in first week of July to 30.33 billion units (BU) compared
to a year ago and returned to pre-pandemic level mainly due to easing of
lockdown curbs and delayed monsoon. There will be some reaction in financial
stocks as Icra said the restructured loan books of non-bank financial entities
are expected to double to 3.1-3.3 per cent by March 2022 from 1.6 per cent in
March 2021 as the second wave of the pandemic hit borrowers.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,689.80
|
15,638.09
|
15,736.19
|
BSE
Sensex
|
52,386.19
|
52,224.23
|
52,551.95
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
488.07
|
306.30
|
302.49
|
309.49
|
Tata Steel
|
178.59
|
1239.35
|
1,203.54
|
1,259.64
|
State Bank of India
|
168.44
|
423.75
|
420.70
|
427.15
|
Adani Port & Special Economic Zone
|
149.24
|
728.50
|
712.24
|
740.89
|
ITC
|
118.34
|
201.35
|
200.71
|
202.16
|
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