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NSE Intra-day chart (16 May 2022)
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Market Commentary 17 May 2022
Markets to open in green tracking Asian peers; LIC to make debut


Indian equity benchmarks snapped the 6-day losing run, and ended the choppy session up nearly half a per cent on Monday, on the back of gains in Telecom, Realty and Auto counters. Markets made cautious start but soon gained traction, as traders took encouragement with Commerce and Industry Minister Piyush Goyal's statement that the comprehensive trade agreement between India and the UAE will help in creating huge job opportunities and boost growth of the domestic economy. The bilateral pact is expected to increase the bilateral trade in goods to over $100 billion and trade in services to over $15 billion within five years. Some support also came in as data provided by the Centre for Monitoring Indian Economy (CMIE) showed that in one of the largest expansions in the labour market since the beginning of the pandemic, 8.8 million people joined the country's workforce in April. However, benchmarks cut most of their initial gains in afternoon session, as some pessimism came with Reserve Bank of India (RBI) data showed that India's forex reserves declined by $1.774 billion to $595.954 billion for the week ended May 6 on the back of a fall in the core currency assets. Some concern also came as sounding a red alert on India's CPI inflation at an 8-year high print of 7.79% YoY in April, Acuite Ratings has said it may trigger quicker rate hikes. Adding some worries, a private report stated that cryptocurrencies can lead to dollarisation of a part of the economy which would be against India's sovereign interest. But, key gauges once again entered into green terrain to end higher, as global markets supported the trading sentiment. Some support also came from Retailers Association of India (RAI) in its latest survey stated that retail businesses across India grew 23 per cent in April 2022 in terms of sales as compared to pre-pandemic levels of the same month in 2019 with customers coming back to stores. Besides, the Reserve Bank of India has said that public sector banks reported over 51 per cent dip in the amount involved in frauds to Rs 40,295.25 crore during the financial year ended March 2022. Finally, the BSE Sensex rose 180.22 points or 0.34% to 52,973.84 and the CNX Nifty was up by 60.15 points or 0.38% to 15,842.30.


The US markets ended mostly lower on Monday after a bit volatile session as some disappointing economic data from the US, Europe and China weighed on sentiment, prompting investors to largely stay cautious. New York manufacturing activity unexpectedly contracted in the month of May, according to a report released by the Federal Reserve Bank of New York. The New York Fed said its general business conditions index plunged to a negative 11.6 in May from a positive 24.6 in April. A negative reading indicates a contraction in regional manufacturing activity. Street had expected the index to slump to a positive 15.5, which would have still indicated growth in the sector. A downward revision in EU growth forecast by the European Commission, and data showing German wholesale price inflation hitting a record high weighed as well. Meanwhile, Data from the National Bureau of Statistics showed that China's industrial output contracted 2.9 percent year-on-year in April, missing expectations for an increase of 0.4 percent and down from 5 percent in March. On the sectoral front, Energy stocks moved higher as crude oil prices rose sharply on supply concerns and amid bets energy demand in China will pick up once the Covid lockdowns are lifted. Spirit Airlines shares soared 13.6 percent after JetBlue Airways launched a hostile takeover bid for the discount carrier. However, JetBlue shares drifted down more than 6 percent.


Crude oil futures ended sharply higher on Monday on optimism that China will see significant demand recovery after positive signs that coronavirus pandemic was receding in the hardest-hit areas. A private report said that Shanghai aims to reopen broadly and allow normal life to resume for the city's 25 million people from June 1, after declaring that 15 of its 16 districts had eliminated cases outside quarantine areas. Further, oil prices also found some support as the European Union's diplomats and officials expressed optimism about reaching a deal on a phased embargo of Russian oil despite concerns about supply in eastern Europe. Benchmark crude oil futures for June delivery surged $3.71 or 3.4% percent to settle at $114.20 a barrel on the New York Mercantile Exchange. Brent crude for July delivery rose $2.27 or 2.02 percent to settle at $113.82 (Provisional) a barrel on London's Intercontinental Exchange.


Indian Money market remained closed on Monday on account of Buddha Purnima.


The FIIs as per Friday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 5714.13 crore against gross selling of Rs 10524.02 crore, while in the debt segment, the gross purchase was of Rs 632.50 crore with gross sales of Rs 972.92 crore. Besides, in the hybrid segment, the gross buying was of Rs 55.56 crore against gross selling of Rs 57.34 crore.


The US markets ended mostly lower on Monday after downbeat Chinese economic data added to worries about a global slowdown and rising interest rates. Asian markets are trading in green on Tuesday despite a mixed session on Wall Street overnight. Indian markets eked out mild gains on Monday to halt a losing streak that lasted for six back-to-back sessions. Gains in financial and auto stocks aided the rebound in both headline indices, though losses in IT shares limited the upside. Today, markets are likely to extend previous session's gains with slightly positive start following gains on Asian counterparts. Investors will also closely monitor the wholesale price index (WPI) reading for April, that will be announced later in the day. Some support will come as Sanjiv Bajaj, the newly-elected president of industry body CII, said the Reserve Bank's decision to raise benchmark interest rates and the likelihood of a good monsoon will help in containing inflation. Traders may take note of report that the commerce ministry's investigation arm DGTR has recommended for continuation of anti-dumping duty on Chinese solar glass for two years with a view to guard domestic players from cheap imports. However, there may be some cautiousness as SBI Research in a report said that amidst the continued rise in inflation, it is now almost certain that the Reserve Bank of India (RBI) will raise key policy rates in the June and August policy review meetings, thereby taking it to the pre-pandemic level of 5.15 per cent by August 2022, and added that even after the rate hikes, inflation will take time to moderate in India. Adding more pessimism, Foreign Institutional Investors (FII) were net sellers once again on Monday. FIIs pulled out Rs 1,788 crore from domestic markets. Meanwhile, Prime Minister Narendra Modi held bilateral talks with his Nepalese counterpart Sher Bahadur Deuba in Lumbini during which they discussed ways to strengthen ongoing cooperation and develop new areas in the multifaceted bilateral partnership. After their talks, the two sides signed six Memorandum of Understandings (MoUs) on cooperation in cultural and educational sectors. There will be some reaction in agriculture industry related stocks with a private report that Wheat jumped by the exchange limit to near a record high after India's move to restrict exports, exposing just how tight global supplies are during the war in Ukraine and threatening to drive up food prices even more. State-owned Life Insurance Corporation (LIC) is set to list its shares on stock exchanges on Tuesday. The shares will be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). LIC's highly-anticipated initial public offering (IPO), which lasted from May 4 to May 9, was subscribed 2.95 times. Investors also awaited the last leg of corporate earnings for direction.


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



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  • The RBI has conveyed its approval to HDFC Bank for setting up a step-down subsidiary through HDFC Securities, for offering broking and clearing services in IFSC at GIFT City. 
  • NTPC has begun commercial operation of the first part capacity of 20 MW out of 56 MW Kawas Solar PV Project in Gujarat. 
  • HDFC backed proptech firm Reloy is targeting a three-fold jump in its revenue to Rs 13 crore in FY23, helped by expansion to new cities and the addition of more real estate clients.
  • Bharti Airtel is planning to set up a new technology center in Pune to support digital services in the Western region and will be hiring around 500 digital engineering professionals by the end of the current fiscal.
News Analysis