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NSE Intra-day chart (24 March 2022)
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Market Commentary 25 March 2022
Benchmarks likely to get positive start on Friday

 

In highly volatile trade, Indian equity benchmarks traded in red for most part of the day and ended marginally lower on Thursday, as geopolitical tensions between Ukraine and Russia remained unabated. Besides, Brent crude prices above $120 per barrel also added to investor woes. Key indices made a gap-down opening, as traders got worried with the Ministry of Commerce & Industry stated that total foreign direct investment (FDI) inflow to India declined to $74.01 billion in the calendar year 2021, which is 15 per cent lower from $87.55 billion recorded in the previous year.  Traders remained cautious with private report stated that domestic banks' share in the overall commercial credit has plunged to a low of 34 per cent in FY2021 from 56 per cent in FY2011 partly due to the pandemic and more because companies are moving away from banks for funds. However, markets pared losses and traded flat with a positive bias in late morning session, as traders took some support with the government data showed that the country's exports for the first time crossed the $400 billion mark in a fiscal on healthy performance by sectors such as petroleum products, engineering, gems and jewellery, and chemicals. But, key gauges failed to hold recovery and once again fell into negative terrain in afternoon deals, as Commerce and Industry Minister Piyush Goyal expressed concerns over the country's bilateral trade and said the government is in continuous dialogue with exporters to address the problems and challenges that are emerging due to the ongoing Russia-Ukraine war and could lead to some kind of disruption in trade.  Meanwhile, the commerce ministry will extend the existing foreign trade policy (FTP) for some more months beyond March 31. Last year in September, the government extended the Foreign Trade Policy 2015-20 till March 31, 2022, due to the COVID-19 pandemic. The present policy came into force on April 1, 2015. The policy provides guidelines related to imports and exports in India. Finally, the BSE Sensex fell 89.14 points or 0.15% to 57,595.68 and the CNX Nifty was down by 22.90 points or 0.13% to 17,222.75.

 

The US markets ended higher on Thursday as falling jobless claims added to confidence in the U.S. economic recovery. First-time claims for U.S. unemployment benefits fell to their lowest level in over 50 years in the week ended March 19th, according to a report released by the Labor Department. The report showed initial jobless claims slid to 187,000, a decrease of 28,000 from the previous week's revised level of 215,000. Street had expected jobless claims to edge down to 212,000 from the 214,000 originally reported for the previous week. With the bigger than expected decrease, jobless claims dropped to their lowest level since hitting 182,000 in September 1969. Besides, the rebound on Wall Street came as stocks extended the see-saw performance shown by the markets over the past few sessions. Traders also kept an eye on any developments out of Europe, where President Joe Biden is meeting with U.S. allies in Brussels. The Biden administration has imposed additional sanctions against Russia over its invasion of Ukraine, targeting dozens of Russian defense companies, 328 members of the Russian State Duma, and the head of Russia's largest financial institution. With Europe depending heavily on Russian gas for heating and power generation, the European Union is split on whether to sanction Russia's energy sector. On the sectoral front, Semiconductor stocks showed a substantial move to the upside on the day, driving the Philadelphia Semiconductor Index up by 5.1 percent to its best closing level in over a month.

 

Crude oil futures ended lower on Thursday  as the United States and its allies discussed a possible further coordinated release of oil from storage to help calm energy markets in the wake of Russia's invasion of Ukraine. Meanwhile, White House national security adviser Jake Sullivan said the United States and its allies had made progress in Iran nuclear talks but issues remained. A lifting of Iranian export restrictions would help alleviate the immense tightness prevalent in crude markets right now. Benchmark crude oil futures for May delivery fell $2.10 or 1.8 percent to settle at $112.82 a barrel on the New York Mercantile Exchange. Brent crude for May delivery dropped $1.99 or 1.6 percent to settle at $119.61 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended higher against American currency on Thursday, due to selling of the US currency by exporters and banks. Sentiments were upbeat as India's merchandise exports rose by 37 per cent to $400.8 billion in 2021-22 until March 21, 2022 as against $292 billion in 2020-21, on healthy performance by sectors such as petroleum products, engineering, gems and jewellery, and chemicals. However, upside remain capped as Ministry of Commerce & Industry said that total foreign direct investment (FDI) inflow to India declined to $74.01 billion in the calendar year 2021, which is 15 per cent lower from $87.55 billion recorded in the previous year. Besides, losses in local equity market also limited gains. On the global front, sterling drift lower against dollar on Thursday after data showed British business activity remained buoyant in March amid surging prices. Finally, the rupee ended at 76.33 (Provisional), stronger by 6 paise from its previous close of 76.39 on Wednesday.

 

The FIIs as per Thursday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 10424.39 crore against gross selling of Rs 9529.28 crore, while in the debt segment, the gross purchase was of Rs 191.51 crore with gross sales of Rs 175.03 crore. Besides, in the hybrid segment, the gross buying was of Rs 19.98 crore against gross selling of Rs 17.49 crore.

 

The US markets ended higher on Thursday as investors watched western leaders present a unified front against Russia's invasion of Ukraine. Asian markets are trading mixed on Friday amid a hawkish Fed, shifts in Chinese economic policy and ongoing ructions in commodity markets due to the Ukraine war. Indian markets failed to stay in the green in a choppy session on Wednesday, as gains in IT, oil & gas and metal shares were offset by losses in financial and auto stocks. Today, the markets are likely to make positive start following a strong session on Wall Street overnight. Traders may take note of report that the Income Tax department said it has issued refunds of over Rs 1.93 lakh crore to over 2.26 crore taxpayers till March 20 this fiscal. This includes 1.85 crore refunds of 2020-21, AY2021-22, amounting to Rs 38,447.27 crore. However, traders may be concerned as India's projected economic growth for 2022 has been downgraded by over 2 per cent to 4.6 percent by the United Nations, a decrease attributed to the ongoing war in Ukraine, with New Delhi expected to face restraints on energy access and prices, reflexes from trade sanctions, food inflation, tightening policies and financial instability. There may be some cautiousness as S&P Global Ratings in its report said rising commodity prices, further triggered by the Russia-Ukraine war, could moderate healthy recovery of the country's economy, and put pressure on the Reserve Bank of India (RBI) to normalise its monetary policy faster than anticipated. Besides, a private report stated that after crossing the $550-billion mark in the first 11 months of the financial year, India's import bill is set to hit record highs in FY22 and probably touch $600 billion. Led by high prices of crude oil along with gold, diamond and industrial inputs, imports are set to continue their strong rise in the first half of FY23. Meanwhile, the government has proposed to tighten the norms for taxation of cryptocurrencies by disallowing set off of any losses with gains from other virtual digital assets. Oil & Gas industry stocks will be in focus as Petrol and diesel prices were hiked by 80 paise a litre each on Friday, the third increase in four days as oil firms recoup losses from holding rates during the period prior to the recently-concluded assembly elections. There will be some reaction in OMCs stocks as Moody's Investors Service said state-run fuel retailers IOC, BPCL and HPCL have together lost around $2.25 billion (Rs 17,000 crore) in revenue between November and March third week by keeping petrol and diesel prices unchanged despite a sharp rise in crude oil prices.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,222.75

17,112.01

17,312.61

BSE Sensex

57,684.82

57,363.42

58,211.39

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ITC

382.39

254.75

251.96

257.01

Oil & Natural Gas Corporation

203.32

177.00

175.54

179.44

Kotak Mahindra Bank

197.10

1714.95

1,701.00

1,728.90

State Bank of India

181.74

486.90

482.00

493.30

ICICI Bank

177.27

704.25

697.26

711.96

 

  • L&T has received approval from board of directors for long term borrowings upto Rs 10,000 crore. 
  • NTPC has made commercially operational an additional 42.5 MW of power generation capacity at Ramagundam floating solar project in Telangana from March 24, 2022. 
  • Bharti Airtel has showcased its high-speed 5G network and low latency capabilities to transform the users' experiences to the next level. 
  • State Bank of India has signed a co-lending agreement with five housing finance companies including PNB Housing Finance and Shriram Housing Finance to give loans for affordable homes.
News Analysis