In a highly volatile session,
Indian equity benchmarks buckled under selling pressure for the second straight
session on Friday as weakness in global markets continues to keep investors on
the edge. The markets started on a negative note and remained in red terrain
for most part of the session, as traders were concerned with the Reserve Bank
of India's monthly bulletin stating that headline inflation is expected to
average well above 6 per cent in the second quarter. It noted headline
inflation, after reaching a low of 4.3 per cent in May 2023, rose in June and
is expected to surge during July-August led by vegetable prices. Besides, fresh
foreign fund outflows also hit investors' sentiments. Foreign Institutional
Investors (FIIs) offloaded equities worth Rs 1,510.86 crore on Thursday after a
day's breather, according to exchange data. However, benchmark indices regained
some lost ground in the fag-end of the session as traders took support with
Reserve Bank of India's article stating that investment activity is gaining
momentum and the envisaged capital expenditure is set to jump by over 80 per
cent to Rs 1.71 lakh crore in the current fiscal (FY24). It also said
improvement in capacity utilisation of the manufacturing sector, pick-up in
credit demand and improving consumer sentiments are helping the capex cycle.
Traders took a note of report that corporate India's deal activity witnessed a
58 per cent jump in value terms to $3.1 billion in July, largely driven by
big-ticket transactions, while caution in the private equity world led to a
reduction in overall volumes. This surge in deal value was anchored by 29 deals
valued at $2 billion, where six high-value transactions encompassing
traditional sectors like IT, auto, retail, and manufacturing took the centre
stage. But, key gauges failed to hold recovery and ended the session in red, as
some pessimism remained among traders with private report stating that private
equity and venture capital funds' investments in the country declined 5 per
cent to $3.9 billion across 59 deals in July 2023. Finally, the BSE Sensex fell
202.36 points or 0.31% to 64,948.66 and the CNX Nifty was down by 55.10 points
or 0.28% to 19,310.15.
The US markets ended mostly in
red on Friday as investors remained on sidelines amid concerns the Federal
Reserve will hold interest rates higher for longer to control inflation.
Minutes this week from the Federal Reserve rate-setting July meeting showed
most members of the rate-setting committee continued to see significant upside
risks to inflation, suggesting more hikes are in the pipeline. Now, attention
turns to the Fed and other top central banks' annual gathering in Jackson Hole,
Wyoming. Investors remained on sideline ahead of a speech from Fed Chair Jerome
Powell next Friday for clues about the interest rate outlook. Though, downside
somewhat remained capped as the dollar and Treasury yields fell slightly from
recent highs. In stocks specific movements, Wallgreens Boots Alliance and 3M
declined 2.2 percent and 1.7 percent, respectively. Alphabet ended 1.9 percent
down, and Meta Platforms declined 0.65 percent, while Apple ended modestly
higher. Johnson & Johnson, Goldman Sachs, 3M, Amgen, Travelers Companies,
Microsoft, Nike and Caterpillar posted modest losses. Discount store Ross
Stores shares rallied 5 percent after the company raised its annual sales and
profit forecasts. Walmart climbed nearly 1.5 percent, rebounding from recent
losses. Boeing, Chevron, Coca-Cola, Cisco Systems and IBM gained 0.5 to 1
percent.
Magnifying gains from the
previous session, crude oil futures ended higher on Friday after data indicated
a drop in output. Data from Baker Hughes showed the oil and natural gas rigs
count in the U.S. dropped for a sixth week in a row, indicating a slump in
future output. The data showed the total number of active drilling rigs in the
U.S. fell by 12 this week to 652. So far this year, Baker Hughes has estimated
a loss of 136 active drilling rigs. The number of oil rigs fell by 5 this week
to 520, down by 101 so far in 2023. The number of gas rigs fell by 6 to 117. A
weak dollar contributed as well to the uptick in oil prices. Benchmark crude
oil futures for September delivery rose $0.86 or about 1.1 percent to settle at
$81.25 a barrel on the New York Mercantile Exchange. Brent crude for October
delivery gained $0.63 or 0.75 percent to settle at $84.75 a barrel on London's
Intercontinental Exchange.
Indian rupee ended lower on
Friday weighed down by a negative trend in domestic equities and foreign fund
outflows. Traders were concerned after the Reserve Bank of India's monthly
bulletin said headline inflation is expected to average well above 6 per cent
in the second quarter. It noted headline inflation, after reaching a low of 4.3
per cent in May 2023, rose in June and is expected to surge during July-August
led by vegetable prices. Besides, a private report stated that private equity
and venture capital funds' investments in the country declined 5 per cent to
$3.9 billion across 59 deals in July 2023. On the global front, the pound
softened on Friday as gloomy market sentiment sent investors to the safe haven
of the U.S. dollar, and British retailers reported a bigger-than-expected drop
in sales in July. Finally, the rupee ended at 83.10 (Provisional), weaker by 1
paisa from its previous close of 83.09 on Thursday.
The FIIs as per Friday's data
were net sellers in equity segment, while they were net buyers in debt segment.
In equity segment, the gross buying was of Rs 11654.68 crore against gross
selling of Rs 12641.65 crore, while in the debt segment, the gross purchase was
of Rs 1091.46 crore with gross sales of Rs 917.26 crore. Besides, in the hybrid
segment, the gross buying was of Rs 731.91 crore against gross selling of Rs
12.66 crore.
The US markets ended mostly lower
on Friday as gains in defensive sectors and energy offset weakness in megacap
growth stocks, while investors looked toward next week's speech by Federal
Reserve Chair Jerome Powell. Asian markets are trading mixed on Monday after
China's central bank cut its one-year loan prime rate to 3.45 per cent but left
its five-year rate unchanged, disappointing investors. Indian markets traded
under selling pressure and ended in red for the second straight session on
Friday as investors offloaded IT, teck and metal stocks amid a bearish global
trend. Today, markets are likely to start new week on cautious note tracking
mixed cues from global peers. Foreign fund outflows likely to dent domestic
sentiments, as foreign institutional investors (FII) sold shares worth net Rs
266.98 crore on August 18. There will be some cautiousness as retail inflation
for farm and rural workers inched up to 7.43 per cent and 7.26 per cent in July
compared to 6.31 per cent and 6.16 per cent, respectively, in June this year,
mainly due to higher prices of certain food items. However, traders may be
taking encouragement as Moody's affirmed India's sovereign rating at Baa3 with
a stable outlook and said high growth will support a gradual increase in income
levels, which will further contribute to economic strength. Moody's said it
expects India's economic growth to outpace all other G20 economies through at
least the next two years, driven by domestic demand. Some support may come as
latest data by the Reserve Bank of India showed India's foreign exchange
reserves snapped a three-week losing streak and increased by $708 million to
$602 billion in the week ended August 11. The rise in the reserves was mainly
on account of an increase in the foreign currency assets, which grew by $999
million to $534 billion in the previous week. Traders may take note of Finance
Secretary T V Somanathan's statement that the government will stick to the
fiscal deficit target of 5.9 per cent of the GDP as robust tax, non-tax
collections will help meet the spending requirement and make up for any
shortfall in disinvestment proceeds. Besides, a private report indicated that
corporate India's deal activity witnessed a 58 per cent jump in value terms to
$3.1 billion in July, largely driven by big-ticket transactions, while caution
in the private equity world led to a reduction in overall volumes. There will
be some buzz in private hospitals stocks as ICRA Ratings in a report said that
corporate hospitals are set to clock an 8-10 per cent revenue growth and strong
margins in the current fiscal. Meanwhile, Jio Financial Services, the demerged
financial services entity of Reliance Industries, will be listed on the
exchanges today.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
19,310.15
|
19,251.24
|
19,371.44
|
BSE
Sensex
|
64,948.66
|
64,743.82
|
65,164.42
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
303.82
|
116.40
|
115.30
|
116.95
|
Adani Ports
|
225.02
|
834.00
|
809.00
|
854.30
|
ITC
|
193.23
|
441.00
|
438.55
|
443.40
|
State Bank of India
|
182.53
|
571.15
|
567.29
|
575.14
|
Adani Enterprises
|
146.80
|
2570.95
|
2466.19
|
2670.84
|
NTPC has executed a Business Transfer Agreement with NTPC Mining for hiving-off its coal mining business, consisting of 6 coal mines.
State Bank of India has offered to extend relief on loans to its customers in Manipur, who have been affected by the ongoing unrest in the state.
ONGC is investing Rs 1 lakh crore by the end of this decade in low-carbon energy opportunities, including renewables and green hydrogen as it looks to transform into a low-carbon energy player.
HCL Technologies and Pearson VUE have entered into a strategic partnership to set up advanced test centers in India developed for the highly sought after Pearson Test of English Academic.