Indian equity
benchmarks ended lower for a fifth straight day on Tuesday, dragged by heavy
selling pressure in IT, FMCG and TECK stocks. The domestic indices fluctuated
between gains and losses throughout the day before plunging sharply in late
deals. Markets made positive start but soon turned volatile, as traders turned
cautious after an Reserve Bank of India (RBI) article has flagged risks of
disruptive spillovers from geopolitical hostilities and said India faces these
challenges from a position of strength built on broadened vaccine coverage,
financial sector resilience and robust exports and remittances and fiscal
reprioritisation to spur capital spending on infrastructure. Some concerns also
came as the International Monetary Fund (IMF) warned that the debt piled on by
the private sector during the coronavirus pandemic could lower growth for
emerging markets by 1.3 percent over three years. However, markets managed to
trade in green in late morning deals, taking support from the commerce
department's preliminary data showing that India exported goods worth $18.79
billion during the first two weeks of April, up 37 per cent compared to the
same period last year, as external demand continued to remain robust. Excluding
petroleum products, the growth in this period was 23.64 per cent over the same
period of 2021-22. Some support also came as working paper of the World Bank
stated that extreme poverty in India declined by 12.3 percentage points between
2011 and 2019, with rural areas doing better than urban centres. But, a sudden
sell-off during the fag-end of the session drove the markets down. Weaker
quarterly corporate earnings, ongoing Russia-Ukraine spat, and high inflation
worries also dented investor sentiment.
Finally, the BSE Sensex fell 703.59 points or 1.23% to 56,463.15 and the
CNX Nifty was down by 215.00 points or 1.25% to 16,958.65.
The US markets ended higher on
Tuesday regaining ground following recent weakness. The rally on markets have
partly reflected bargain hunting after the modest drop seen on Monday dragged
the Nasdaq and the S&P 500 down to their lowest closing levels in a month.
Traders also reacted positively to some of the latest earnings news, with
Hasbro posting a strong gain after the toy maker reported first quarter
earnings that missed street estimates but raised its full-year profit forecast.
Shares of Johnson & Johnson also showed a strong move to the upside after
the healthcare giant reported better than expected first quarter earnings. On
the sectoral front, Housing stocks moved sharply higher following the upbeat
housing starts data, driving the Philadelphia Housing Sector Index up by 3.4
percent. Substantial strength was also visible among airline stocks, with the
NYSE Arca Airline Index soaring by 3.2 percent to its best closing level in
almost two months. On the economic data front, new residential construction in
the U.S. expectedly saw modest growth in the month of March, according to a
report released by the Commerce Department. The report showed housing starts
rose by 0.3 percent to an annual rate of 1.793 million in March after spiking
by 6.5 percent to an upwardly revised rate of 1.788 million in February. The uptick
surprised participants, who had expected housing starts to fall by 1.4 percent
to a rate of 1.745 million from the 1.769 million originally reported for the
previous month. With the unexpected growth, housing starts once again reached
their highest annual rate since hitting 1.802 million in June of 2006. The
modest increase in housing starts came as multi-family starts soared by 4.6
percent to a rate of 593,000, more than offsetting a 1.7 percent drop in
single-family starts to a rate of 1.200 million.
Crude oil futures ended lower on
Tuesday on concerns about outlook for energy demand with investors fearing a
slowdown in global economic growth amid imminent monetary policy tightening by
the Federal Reserve. The International Monetary Fund (IMF) has lowered its
forecast for global economic growth by nearly a full percentage point, citing
seismic waves from Russia's invasion and the clear and present danger of
inflation in many countries. Besides, oil prices fell despite lower output from
OPEC+, which produced 1.45 million barrels per day (bpd) below its targets in
March, as Russian output began to decline following sanctions imposed by the
West. Benchmark crude oil futures for May delivery fell $5.65 or 5.2 percent to
settle at $102.56 a barrel on the New York Mercantile Exchange. Brent crude for
June delivery dropped $6.17 or 5.41 percent to settle at $106.99 (Provisional)
a barrel on London's Intercontinental Exchange.
Indian rupee weakened on Tuesday,
marking the fourth straight session of losses, tracking a strong American
currency in the overseas market and significant foreign fund outflows. Traders remained cautious as flagging risks
of disruptive spillovers from geopolitical hostilities, an RBI article said
India faces these challenges from a position of strength built on broadened
vaccine coverage, financial sector resilience and robust exports. Some anxiety
also came as the International Monetary Fund (IMF) warned that the debt piled
on by the private sector during the coronavirus pandemic could lower growth for
emerging markets by 1.3 percent over three years. On the global front, the
dollar rose on Tuesday to a fresh 20-year high against the Japanese yen and
tested a two-year peak against the euro, supported by high U.S. Treasury
yields. Finally, the rupee ended at 76.52 (Provisional), weaker by 23 paise
from its previous close of 76.29 on Monday.
The FIIs as per Tuesday's data
were net sellers in equity segment, while net buyers in debt segment. In equity
segment, the gross buying was of Rs 7711.52 crore against gross selling of Rs
14194.56 crore, while in the debt segment, the gross purchase was of Rs 532.64
crore against gross selling of Rs 209.69 crore. Besides, in the hybrid segment,
the gross buying was of Rs 3.29 crore against gross selling of Rs 13.12 crore.
The US markets ended higher on
Tuesday on the back of stronger-than-expected corporate earnings. Asian markets
are trading mostly in green on Wednesday as China defied expectations by keeping
its benchmark lending rate unchanged. Indian markets bled in the last hour of a
choppy session on Tuesday due to selling in financial, IT, FMCG and auto
stocks. Today, the benchmark indices are likely to open in green following
positive global cues. Traders will be taking encouragement as describing the
Indian economy's recovery from the COVID-19 pandemic as distinct and
pronounced, Finance Minister Nirmala Sitharaman exuded confidence about India
posting robust economic growth this decade. Separately, she said the US-India
relationship is at its best and will strengthen the global order in these
challenging times. However, there may be some cautiousness as the International
Monetary Fund (IMF) cut its growth forecast for India for FY23 by 80 basis points
to 8.2 percent, warning that Russia's invasion of Ukraine would hurt
consumption and hence, growth, by way of higher prices. Meanwhile, foreign
institutional investors (FIIs) have net sold shares worth Rs 5,871.69 crore,
while domestic institutional investors (DIIs) have net bought shares worth Rs
3,980.81 crore on April 19, as per provisional data available on the NSE. There
will be some buzz in OMCs stocks as Fitch Ratings said further hikes in retail
fuel prices may be required for state-run oil marketing companies' marketing
margins to reach pre-November levels. Edible oil industry stocks will be in
focus as Solvent Extractors' Association of India (SEA) data showed that
India's oilmeals exports declined 36 per cent to 23.73 lakh tonnes in the last
fiscal, while in value terms the shipments were down 37 per cent to Rs 5,600
crore on lower sale of soyabean meal in the overseas markets. There will be
some reaction in fertilizer industry stocks with a private report that India's
fertiliser subsidy expenses could touch Rs 2 trillion in 2022-23 because of a
sharp spike in global prices of urea, di-ammonium phosphate (DAP) and muriate
of potash (MoP) in the last one year. NBFCs will be in limelight as the Reserve
Bank of India (RBI) has mandated exposure limits to the non-banking finance
companies (NBFCs), in line with commercial banks. There will be lots of
earnings reaction based on the performance of the companies.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
16,958.65
|
16,763.69
|
17,214.64
|
BSE
Sensex
|
56,463.15
|
55,826.78
|
57,281.79
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Coal India
|
593.41
|
195.60
|
189.75
|
202.35
|
NTPC
|
385.22
|
160.00
|
157.55
|
164.40
|
HDFC Bank
|
370.48
|
1,335.00
|
1,311.49
|
1,374.04
|
ICICI Bank
|
310.88
|
759.85
|
751.94
|
772.84
|
ITC
|
233.80
|
259.25
|
254.54
|
268.24
|
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