Extending their losing streak for
second straight session, Indian benchmark indices ended the Monday's session on
disappointing note, with Sensex and Nifty breaching their crucial psychological
52,900 and 15,800 levels, respectively. Markets started the week with a sharp
cut and remained under pressure throughout the session, as investors awaited
inflation data later in the day, while global markets plunged over fears of
aggressive policy tightening by the US Federal Reserve later this week. The
market participants remained worried as RBI data showed that after rising for
two consecutive weeks, the country's foreign exchange reserves declined by $306
million to $601.057 billion in the week ended June 3. Besides, persistent selling
by foreign portfolio investors (FPIs) dampened investors' sentiment. FPIs have
been net sellers for eight consecutive month, offloading Rs 13,888 crore worth
of equities so far in June. With this, the FPIs have sold Rs 1,81,043 worth of
equities so far this year. Markets were trading in deep sea of red in late
afternoon session amid reports that with Chief Economic Advisor V Anantha
Nageswaran citing the IMF forecast that the Indian economy would cross $5
trillion by 2026-27, leader P Chidambaram said the goal of a USD 5 trillion GDP
appears to be a case of 'shifting goalposts' as the original target year was
2023-24. Market participants overlooked Chief Economic Advisor (CEA) Anantha
Nageswaran's statement that India has shown exemplary resilience in recovery
from the COVID-19 pandemic crisis. He added all major activities and parameters
of the economy have crossed their pre-COVID levels, and it is now enjoying
macroeconomic tailwinds. Traders also paid no heed towards NITI Aayog Vice
Chairman Suman Bery's statement that India's macroeconomic position relative to
emerging economies appears good, and the coming decade appears promising for
sustained economic growth for the country. Finally, the BSE Sensex fell 1456.74
points or 2.68% to 52,846.70 and the CNX Nifty was down by 427.40 points or
2.64% to 15,774.40.
The US markets settled deeply in
red on Monday, magnifying their previous session's losses, with the S&P 500
tumbling to a fresh low for the year and closing in bear market territory as
recession fears grew. Weakness on the markets reflected lingering concerns
about inflation and the outlook for interest rates after last Friday's report
showing a jump in consumer prices. The Federal Reserve is scheduled to announce
its latest monetary policy decision on Wednesday, with the central bank
expected to continuing raising interest rates in an effort to combat inflation.
A private report stated that the Fed would consider raising rates by 0.75% on
Wednesday, more than the half-point increase currently expected. Meanwhile, the
10-year Treasury rose more than 20 basis points higher to top 3.3%, as
investors continued to bet the Fed may have to get more aggressive to squash
inflation. Prices move inversely to yields and 1 basis point equals 0.01%. The
2-year Treasury yield was last up roughly 30 basis points to about 3.3%. Besides, shares of Boeing, Salesforce and
American Express fell 8.7%, 6.9% and 5.2%, respectively, dragging down the Dow
as recession fears picked up. Beaten-up tech shares also took a hit with
Netflix, Tesla and Nvidia down more than 7% as the Nasdaq touched a fresh
52-week low and its lowest level since November 2020. Travel stocks also slipped
on Monday as Carnival Corporation and Norwegian Cruise Line plummeted about 10%
and 12%, respectively. Delta Air Lines dropped more than 8% while United
tumbled about 10%.
Crude oil futures rebounded from
early losses and ended marginally higher on Monday as concerns about global
supplies outweighed demand worries. However, oil prices dropped earlier in the
day as a surge in coronavirus cases in China raised concerns about the outlook
for energy demand. Besides, a soaring
dollar amid rising prospects of the Federal Reserve announcing a sharper rate
hike weighed as well on oil prices. Benchmark crude oil futures for July
delivery rose $0.26 or 0.2 percent to settle at $120.93 a barrel on the New
York Mercantile Exchange. Brent crude for August delivery added $0.26 or 0.21
percent to settle at $122.27 a barrel on London's Intercontinental Exchange.
Indian rupee concluded weaker on
Monday and breached 78 mark against the US dollar for the first time amid fears
of aggressive interest rate hike by U.S. Federal Reserve later this week. May
consumer inflation hit a fresh 40-year high of 8.6 per cent in the US. The
partially convertible rupee fell to a record low of 78.14 against the US dollar
on stronger demand. Traders were worried as RBI data showed that after rising
for two consecutive weeks, the country's foreign exchange reserves declined by
$306 million to $601.057 billion in the week ended June 3. Also, recent upsurge
in crude oil prices have put pressure on the domestic currency. Brent crude oil
price has hovering near $120 per barrel. High oil price is expected widen trade
deficit. On the global front, dollar gained to fresh two-decade highs versus
major rival currencies on Monday, supported by fears over a global economic
slowdown and bets on steep interest rate hikes by the U.S. Federal Reserve. Finally,
the rupee ended at 78.04 (Provisional), weaker by 11 paise from its previous
close of 77.93 on Friday.
The FIIs as per Monday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 4381.92 crore against gross selling of Rs 7563.46 crore, while
in the debt segment, the gross purchase was of Rs 690.92 crore with gross sales
of Rs 2371.36 crore. Besides, in the hybrid segment, the gross buying was of Rs
9.76 crore against gross selling of Rs 4.48 crore.
The US markets ended lower on
Monday as fears grow that the expected aggressive interest rate hikes by the
Fed would push the economy into a recession. Asian markets are trading mostly
in red on Tuesday after Wall Street hits a confirmed bear market and bond
yields strike a two-decade high. Indian markets closed at 11-month lows on Monday
amid a global sell-off. Today, markets are likely to continue their bearish
trend with negative start tracking weakness in global peers. Investors will be
eyeing wholesale inflation numbers to be out later in the day for further cues.
Besides that, the trade balance data will also be watched out by investors.
Traders will be concerned with continued selling by foreign investors. Foreign
institutional investors (FIIs) have net sold Rs 4,164.01 crore worth of shares
on June 13, as per provisional data available on the NSE. There will be some
cautiousness as retail inflation stayed above the Reserve Bank's upper
tolerance level of 6 per cent for the fifth month in a row, though it eased to
7.04 per cent in May from April's near-eight-year high of 7.79 percent, mainly
on account of softening food and fuel prices as the government as well as the
RBI stepped in to control spiralling price rise by way of duty cuts and repo
rate hike. However, some support may come later in the day as India Exim Bank
said the country's total merchandise exports are likely to be at $117.2 billion
in the first quarter of FY23, as compared to the total merchandise exports of
$95.5 billion in the corresponding quarter of the previous year. Traders may
take note of SBI research report stating that the Reserve Bank is much ahead of
the curve in containing inflation, which appeared to have peaked, though it may
go for an interest rate hike in August and October. Meanwhile, markets
regulator Sebi said investment managers of an AIF (alternative investment fund)
can provide investment management services to the offshore fund only by getting
registered as portfolio managers. There will be some buzz in the NBFCs, HFCs
stocks as Icra Ratings in a report said non-banking financial companies (NBFCs)
and housing finance firms witnessed an improvement in their asset quality in
the fourth quarter of FY22, helped by minimal impact of Omicron variant of
COVID-19 and lower slippages from restructured book. Coal industry stocks will
be in focus with report that India's coal import is likely to decline by 11.4
per cent to 186 million tonnes (MT) in the current financial year, even as the
state-owned firm has issued import tenders to source the dry fuel from
overseas.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,774.40
|
15,676.89
|
15,879.04
|
BSE
Sensex
|
52,846.70
|
52,513.34
|
53,193.80
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
NTPC
|
192.08
|
149.75
|
146.70
|
153.85
|
Tata Motors
|
174.42
|
406.50
|
402.01
|
414.56
|
ICICI Bank
|
166.22
|
688.00
|
679.30
|
699.50
|
State Bank of India
|
134.26
|
446.10
|
440.79
|
452.74
|
Hindalco Industries
|
122.69
|
367.00
|
359.06
|
376.36
|
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