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NSE Intra-day chart (23 April 2021)
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Market Commentary 26 April 2021
Benchmarks likely to open in green amid positive global cues

 

Indian equity benchmarks ended the volatile day of trade in red terrain on Friday with frontline gauges settling below their crucial 47,900 (Sensex) and 14,350 (Nifty). Markets started the day on pessimistic note amid concerns over continues rising coronavirus cases in the country. India reported 332,503 fresh coronavirus infections on Friday, taking the cumulative caseload to 16,257,309, Worldometer showed.  Sentiments also remain dampened after S&P Global Ratings said the Indian economy is projected to grow at 11 per cent in the current fiscal, but flagged the substantial impact of broader lockdowns on the economy. In its report on Asia-Pacific Financial Institutions, S&P said the control of COVID-19 remains a key risk for the economy. New infections have spiked in recent weeks and the country is in the middle of a second pandemic wave. Also, rating agency Fitch Ratings has affirmed India's long-term foreign-currency Issuer Default Rating (IDR) at BBB- with a negative outlook. Markets turned positive in noon deals as traders opted to buy some beaten down but fundamentally strong stocks after Finance Minister Nirmala Sitharaman said the industry is in recovery mode and several Budget proposals are on course, including disinvestment, despite a fresh wave of coronavirus infections and local lockdowns. Traders also took some relief with Chief Economic Adviser K V Subramanian's statement that the impact of the second wave of COVID-19 on the Indian economy may not be very large. He also said predicting the second wave was a real problem for researchers across the globe. However, the recovery proved short lives and markets once again slipped in red terrain after credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has revised down India's FY22 real GDP growth forecast to 10.1 per cent, from earlier projection of 10.4 per cent, citing the second wave of COVID-19 infections and slower pace of vaccination. At a time when large parts of the country are experiencing tremendous pressure on medical infrastructure, it expects the second wave to start subsiding by mid-May. Finally, the BSE Sensex fell 202.22 points or 0.42% to 47,878.45, while the CNX Nifty was down by 64.80 points or 0.45% to 14,341.35.   

 

The US markets ended higher on Friday supported by data indicating an acceleration in economic activity and even faster growth in new home sales, as investors largely brushed off Thursday's reports that President Joe Biden would propose a large increase on the capital-gains tax for the wealthiest Americans. Optimism about the economic recovery also helped prop up the markets, although concerns about high valuations and surging coronavirus cases overseas have led to worries about the near-term outlook. In US economic data, the IHS Markit purchasing managers index for the manufacturing sector rose to a record 60.5 in April from 59.1 a month earlier, while the services sector PMI jumped to 63.1 from 60.4. A reading of more than 50 indicates an expansion in activity. Besides, the Commerce Department released a report showing a substantial rebound in new home sales in the month of March. The report showed new home sales skyrocketed by 20.7 percent to an annual rate of 1.021 million in March after plunging by 16.2 percent to a revised rate of 846,000 in February. Street had expected new home sales to spike by 14.3 percent to a rate of 886,000 from the 775,000 originally reported for the previous month. With the rebound, new home sales soared from the eight-month low set in February to their highest level since August of 2006. Meanwhile, the Federal Reserve's monetary policy announcement is likely to be in the spotlight next week, although the central bank is widely expected to maintain its ultra-easy monetary policy.

 

Crude oil futures ended higher on Friday with gains of over a percent amid buoyant demand for energy in the US. Though, the massive surge in coronavirus infections in India, and the Japanese government's decision to impose another lockdown in Tokyo and a few other cities raised concerns about the outlook for energy demand. Meanwhile, data from Baker Hughes showed the total weekly active drilling-rig count in the US was down 1 at 438 this week. The data also showed active oil-rig count dropped by 1 to 343 in the week. Crude oil futures for June rose 71 cents or 1.2 percent to settle at $62.14 barrel on the New York Mercantile Exchange. June Brent crude gained 71 cents or 1.1 percent to settle at $66.11 a barrel on London's Intercontinental Exchange.

 

Continuing previous session drubbing, rupee ended lower against greenback on Friday. Sentiments were dented as private report stated that the stringent mobility curbs and lockdowns put across key Indian cities will dent the economic momentum and will result in an economic loss of Rs 1.5 trillion. Total loss is estimated at Rs 1.5 trillion, of which Maharashtra, Madhya Pradesh and Rajasthan account for 80 per cent. Maharashtra alone accounts for 54 per cent. However, downfall remained capped as Finance Minister Nirmala Sitharaman said the industry is in recovery mode and several Budget proposals are on course, including disinvestment, despite a fresh wave of coronavirus infections and local lockdowns. On the global front, pound rebounded on Friday from a sharp fall on Thursday after strong retail sales data which showed Britain's economy might already be recovering from its worst annual contraction in 300 years. Finally, the rupee ended 75.01, weaker by 7 paise from its previous close of 74.94 on Thursday.

 

The FIIs as per Friday's data were net seller in both equity and debt segment. In equity segment, the gross buying was of Rs 9597.46 crore against gross selling of Rs 10501.95 crore, while in the debt segment, the gross purchase was of Rs 283.50 crore with gross sales of Rs 845.62 crore. Besides, in the hybrid segment, the gross buying was of Rs 13.82 crore against gross selling of Rs 12.43 crore.

 

The US markets ended higher on Friday as increased factory output and housing data supported expectations of a swift economic recovery, while big tech stocks rose in anticipation of strong earnings reports. Asian markets are trading mostly in green on Monday as signs the world economic recovery was well on track bolstered risk appetite, while the US dollar slipped to a two-month low. Indian markets ended lower Friday dragged by selling in IT, FMCG and pharma stocks. Today, the start of the F&O series expiry week is likely to be positive tracking firm global cues. Some support will come with Union Minister Nitin Gadkari's statement that the pandemic has caused a slowdown in India but the country's inherent resilience and capability will help it transform into a new India with a faster growth path fuelled by infrastructure. However, rising coronavirus cases may cap gains in markets. India reported 354,531 fresh coronavirus infections, taking the cumulative caseload to 17,306,300, Worldometer showed. There may be some cautiousness with report that overseas investors withdrew a net Rs 7,622 crore from Indian markets in April so far as a surge in COVID-19 cases and the consequent restrictions imposed by various states dent investors' sentiment. Traders may take note of 15th Finance Commission Chairman NK Singh's statement that India's tax revenue potential is lower by 4 per cent of GDP and the country needs to bring in deep reforms in the revenue management system. He also said an incentive mechanism for states needs to be worked out so that their policies are aligned to those of the central government. Meanwhile, the centre has allowed state governments to borrow 75% of their annual market borrowing limit of 4% of their respective Gross State Domestic Product (GSDP) in the first nine months of the current fiscal year. The move comes during a time where there are revenue constraints on state governments and the coronavirus delays recovery. Auto stocks will be in focus as India Ratings and Research (Ind-Ra) in its latest report stated that the second wave of COVID-19could pose downside risks to the domestic auto industry demand in the near term. It said the demand for commercial vehicles (CVs) may revive in the second quarter of 2021-22 as economic activities improve, and also due to the lower capacity in the system after consecutive double-digit decline in 2019-20 and 2020-21. There will be some reaction in oil & gas sector stocks as oil marketing companies keep fuel prices unchanged for tenth straight day. Petrol and diesel prices were unchanged across the four metros for the 10th day in a row. There will be lots of important earnings announcements too, to keep the markets in action.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

14,341.35

14,256.05

14,443.90

BSE Sensex

47,878.45

47,610.21

48,206.05

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Motors

581.58

294.00

289.66

299.16

State Bank of India

442.23

336.45

332.10

340.35

ICICI Bank

337.49

569.95

564.50

577.95

NTPC

294.84

102.55

99.36

104.36

Tata Steel

247.52

925.60

909.24

943.49

 

  • HDFC has concluded the sale of 47,75,241 equity shares of Re 1 each, representing 24.48% of the equity capital of Good Host Spaces to Baskin Lake Investments. 
  • Wipro is going to achieving Net-Zero Greenhouse Gas emissions by 2040 in line with the objective of the Paris Agreement to cap temperature rise to 1.5 degree Celsius. 
  • Reliance Industries' wholly owned subsidiary -- Reliance Industrial Investments and Holdings has acquired the entire issued share capital of Stoke Park for euro 57 million. 
  • Titan Company's arm -- Titan Engineering & Automation has incorporated Wholly Owned Subsidiary namely TEAL USA Inc. in the state of Michigan, USA.
News Analysis