Falling for the third straight
day, Indian equity benchmarks ended volatile session marginally in red amid
largely weak global markets as investors remained cautious ahead of the crucial
Federal Reserve meeting outcome. Markets started the day on a negative note, 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. Traders were
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. However, key gauges erased early
losses and traded marginally higher in morning deals, as traders found some
support with India Exim Bank stating that 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. Some optimism also came as ICRA Ratings' report
stated said that non-banking financial companies (NBFCs) and housing finance
Companies (HFCs) witnessed an improvement in their asset quality in the fourth
quarter of FY22 (Q4FY22) as the impact of the Omicron variant of Covid-19 was
minimal and the slippage from the restructured book was lower. But, key indices failed to hold gains and
ended lower as India's wholesale price index (WPI) based inflation rate rose to
the highest level in the current 2011-12 series at 15.88% in May 2022 as
against 15.08% in April. The number has remained in double digits for the
fourteenth consecutive month. The higher inflation can be attributed to a surge
in vegetable prices and supply-side disruptions caused by the Russia-Ukraine
war. Finally, the BSE Sensex fell 153.13 points or 0.29% to 52,693.57 and the
CNX Nifty was down by 42.30 points or 0.27% to 15,732.10.
The US markets ended mostly in
red on Tuesday with the S&P 500 dipping further into bear market territory
ahead of the Federal Reserve's monetary policy announcement. The Fed, which is
scheduled to announce its policy on Wednesday, is widely expected to hike
interest rates by 50 basis points. Some
private reports said they expect that the Fed to raise interest rates by 75
basis points. Stocks hit session lows during the final hour of trading after
seesawing between sharp gains and losses throughout the day. Stock specific
developments, shares of Oracle jumped more than 10% after the software company
reported an earnings beat boosted by a major increase in demand in its infrastructure
cloud business. FedEx's stock saw its best day since 1986 after soaring 14% on
news that the company would raise its quarterly dividend by more than 50% and
add three new directors to its board. On the economic data front, the Labor
Department showed producer prices increased 0.8 percent month-on-month in May
2022, following a 0.4 percent rise in April. The producer price index for final
demand less foods and energy rose 0.5 percent from a month earlier in May of
2022, accelerating from a downwardly revised 0.2 percent gain in the prior
month. Year-on-year, core producer prices rose by 8.3 percent, easing from a
revised 8.6 percent increase in April. Annual producer inflation in the US
edged slightly lower to 10.8 percent in May of 2022 from 10.9 percent in April
and a 21-year high of 11.5 percent hit in March.
Crude oil futures ended deeply in
red on Tuesday on rising dollar. The dollar index surged to 105.43 with traders
betting on sharper interest rate cuts from the Federal Reserve. The Fed is
widely expected to raise interest rate by 50 or 75 basis points. Meanwhile,
cautiousness also prevailed on reports of a likely proposal to impose a federal
surtax on certain oil companies to curb rising inflation. A sharp drop in
natural gas prices amid reports that repairs to a damaged Freeport LNG terminal
might not be on till later this year weighed as well on oil prices. Benchmark
crude oil futures for July delivery fell $2.00 or 1.7 percent to settle at
$118.93 a barrel on the New York Mercantile Exchange. Brent crude for August
delivery dropped $2.22 or 1.81 percent to settle at $120.03 a barrel
(provisional) on London's Intercontinental Exchange.
Indian rupee ended flat on
Tuesday due to mild dollar demand from banks and importers. Lackluster domestic
markets, elevated crude oil prices and persistent foreign capital outflows
weighed on the local unit. Traders were worried as WPI based inflation rate
rose to the highest level in the current 2011-12 series at 15.88% in May 2022
as against 15.08% in April. The number has remained in double digits for the
fourteenth consecutive month. Meanwhile, India Exim Bank has said that the
country's total merchandise exports are likely to be at $117.2 billion in the
first quarter of FY23 (Q1FY23). The total merchandise exports stood at $95.5
billion in the corresponding quarter of the previous year. Finally, the rupee
ended unchanged from its previous close of 78.04 on Monday.
The FIIs as per Tuesday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 3956.85 crore against gross selling of Rs 7522.93 crore, while
in the debt segment, the gross purchase was of Rs 67.30 crore against gross
selling of Rs 397.41 crore. Besides, in the hybrid segment, the gross buying
was of Rs 23.43 crore against gross selling of Rs 28.77 crore.
The US markets ended mostly in
red on Tuesday a day after tumbling into a bear market on worries that high
inflation will push central banks to clamp the brakes too hard on the economy.
Asian markets are trading mostly higher on Wednesday ahead of a key US Federal
Reserve decision and with expectations rising for an even tougher rate hike
than previously telegraphed. Indian markets finished yet another volatile
session on Tuesday in the red, hitting fresh 11-month closing lows amid
negative global cues. Today, markets are likely to make cautious start amid mixed
moves across global markets, as investors awaited the outcome of a key policy
meeting of the Fed. There will be some cautiousness as foreign portfolio
investors (FPIs) turned sellers of domestic stocks to the tune of Rs 4,502.25
crore on June 14, data available with NSE suggested. However, some support will
come as Chief Economic Adviser (CEA) V Anantha Nageswaran said India would
become a $5 trillion economy by 2026-27 and $10 trillion by 2033-34. Nageswaran
said India is relatively better placed than other emerging economies.
Meanwhile, Fitch Ratings said the Reserve Bank is likely to raise interest
rates further to 5.9 per cent by December 2022, on deteriorating inflation
outlook. Fitch said India's economy faces a worsening external environment, elevated
commodity prices, and tighter global monetary policy. There will be some buzz
in the oil & gas sector stocks as S&P Global Commodity Insights in a
note said India's oil product demand in May was up 860,000 barrels per day or
22 per cent year-on-year from a low base in 2021. Insurance industry stocks
will be in focus as regulator Irdai reduced the solvency margin requirement for
general insurers providing crop insurance, a decision expected to unlock Rs
1,400 crore of funds for them to undertake more business. There will be some
reaction in edible oil industry stocks as Solvent Extractors Association (SEA)
said India's palm oil imports declined by 33.20 per cent to Rs 5,14,022 tonne
during May this year, but there was sharp rise in shipment of RBD palmolein oil
by refineries. NBFCs stocks will be in limelight as Crisil Ratings said the
hardening of interest rates is likely to raise the cost of funds for finance
companies by 85-105 basis points (bps) as their debt, amounting to Rs 18
trillion, gets repriced in the current financial year.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,732.10
|
15,641.70
|
15,840.25
|
BSE
Sensex
|
52,693.57
|
52,403.60
|
53,039.44
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
196.26
|
404.70
|
397.65
|
411.80
|
NTPC
|
170.34
|
152.10
|
149.85
|
153.40
|
ICICI Bank
|
133.48
|
684.95
|
678.85
|
692.85
|
Oil & Natural Gas Corporation
|
128.44
|
156.00
|
154.01
|
159.26
|
Power Grid Corporation of India
|
127.67
|
223.75
|
221.40
|
226.70
|
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