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NSE Intra-day chart (27 June 2022)
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Market Commentary 28 June 2022
Benchmarks likely to open in red on Tuesday

 

Indian equity benchmarks extended their winning run for the third straight session on Monday, as buoyancy across the global markets boosted sentiment. Key gauges made gap-up opening, as sentiments got a boost with Commerce and Industry Minister Piyush Goyal's statement that India is one of the fastest-growing economies in the world and it is expected to reach $30 trillion in the coming 30 years. He said if India grows at 8 per cent every year on a compounded annual growth basis, the economy will double in about nine years. Some optimism also came as a private report stated that India is rapidly emerging as a preferred country for foreign investments as the steps taken by the government led by Prime Minister Narendra Modi during the last eight years have borne fruit as is evident from the ever-increasing volumes of FDI inflow setting new records. Key indices continued to trade in green in second half of trading session, taking support from a private report stating that India's economy gathered momentum in May driven by pent up demand for services and higher output from industries as reopening continued from pandemic restrictions. Additional support also came as the Reserve Bank of India (RBI) said that net profits of manufacturing companies surged by 50.2 per cent during 2021-22, the input cost pressures notwithstanding. It said net profit also increased for the information technology (IT) companies, whereas the non-IT services sector continued to record losses at the aggregate level. However, markets trimmed some gains in late afternoon deals, as there was some cautiousness as too with latest data released by the Reserve Bank of India (RBI) showed India's foreign exchange reserves declined $5.9 billion to $590.59 billion for the week ended June 17. Finally, the BSE Sensex rose 433.30 points or 0.82% to 53,161.28 and the CNX Nifty was up by 132.80 points or 0.85% to 15,832.05.

 

The US markets settled in red on Monday as investors largely stayed cautious, reassessing the expected path of Federal Reserve interest rate hikes amid falling inflation expectations. However, losses remained capped as new orders for US manufactured durable goods increased by more than expected in the month of May, according to a report released by the Commerce Department. The report showed durable goods orders climbed by 0.7 percent in May after rising by 0.4 percent in April. Street had expected orders to inch up by 0.1 percent. Meanwhile, after reporting steep drops in US pending home sales over the past several months, the National Association of Realtors released a report showing an unexpected rebound in pending home sales in the month of May. A report from the National Association of Realtors showed the pending home sales index climbed 0.7 percent to 99.9 in May after plunging by 4 percent to a revised 99.2 in April. The increase surprised participants, who had expected pending home sales to tumble by another 3.7 percent. In the stock specific developments, Salesforce.com, Nike, Boeing, American Express, Walt Disney and 3M shed 1 to 2.5 percent. Shares of Spirit Airlines ended nearly 8% down after the company announced that it would accept Frontier Group's latest takeover bid. However, Shares of BioNTech climbed 7.2 percent, lifted by an announcement from the company that its Omicron-based Covid-19 booster improves immune response to that variant.

 

Crude oil futures ended higher on Monday as Libya's National Oil Corporation has signaled a potential dent in supply due to a worsening political crisis. Meanwhile, investors waited for any moves against Russian oil and gas exports that might come out of a meeting of leaders of the Group of Seven (G7) nations in Germany. The prospect of even tighter supplies loomed over the market as western governments sought ways to limit Russia's ability to fund its war in Ukraine. Benchmark crude oil futures for August delivery rose $1.95 or 1.8 percent to settle at $109.57 a barrel on the New York Mercantile Exchange. Brent crude for August delivery surged $2.15 or 1.74 percent to settle at $115.09 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended marginally lower against dollar on Monday on emergence of demand for the greenback from importers. Some concern also came as latest data released by the Reserve Bank of India (RBI) showed India's foreign exchange reserves declined $5.9 billion to $590.59 billion for the week ended June 17. Firm crude oil prices in the international market and unabated foreign capital outflows put pressure on the domestic unit. However, losses remain capped as some support came with Commerce and Industry Minister Piyush Goyal's statement that India is one of the fastest-growing economies in the world and it is expected to reach $30 trillion in the coming 30 years. He said if India grows at 8 per cent every year on a compounded annual growth basis, the economy will double in about nine years. On the global front, U.S. dollar struggled versus its major rivals on Monday as traders reassessed the prospects of aggressive rate hikes, while the euro led gainers at the start of the European Central Bank's annual summit in Portugal. Finally, the rupee ended at 78.37 (provisional), weaker by 4 paise from its previous close of 78.33 on Friday.

 

The FIIs as per Monday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 4598.53 crore against gross selling of Rs 6707.10 crore, while in the debt segment, the gross purchase was of Rs 137.28 crore against gross selling of Rs 415.81 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.30 crore against gross selling of Rs 10.25 crore.

 

The US markets ended lower on Monday with a few catalysts to sway investor sentiment. Asian markets are trading in red with investors taking their cue from a volatile Wall Street session overnight. Indian markets ended higher for third straight session on Monday. Today, markets are likely to make weak start as investor sentiment turn pessimistic overseas amid surging crude oil prices. Investors will be eyeing the 47th Goods and Services Tax (GST) Council meeting to begin today. The council is expected to consider rate hikes for a slew of items and steps to check evasion like biometric authentication of high-risk taxpayers. The GST Council will also consider a report of the panel of state ministers headed by Kerala finance minister KN Balagopal on making e-way bill mandatory for intra-state movement of gold above a threshold of Rs 2 lakh. However, some support may come as a report by the government think-tank NITI Aayog estimates India's gig economy could employ 2.35 crore people by FY30, representing a three-and-a-half-times increase over 10 years. The gig economy employed around 68 lakh people in FY20. Traders may take note of report that India and the European Union (EU) resumed negotiations, after a gap of over eight years, for a comprehensive free trade agreement, a move aimed at strengthening economic ties between the two regions. Meanwhile, the latest data released by the Reserve Bank of India (RBI) showed that credit card spends hit an all-time high in May, reaching Rs 1.14 trillion and registering 8 per cent month-on-month growth over April. NBFCs will be in focus as modifying its earlier order, the finance ministry has permitted state-owned NBFCs to issue Letter of Comfort (LOC) to banks for fund tie-up for infra projects. It said NBFCs should be involved in infrastructure sector and LOCs should be provided by banks only for opening letter of credit for supply of goods and services by foreign suppliers. There will be some reaction in power stocks as S&P Global Commodity Insights said India is continuing to grapple with a severe and protracted power crisis after a sustained surge in global coal prices in late-2021 was further aggravated by Russia's invasion of Ukraine in February.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

15,832.05

15,789.21

15,901.16

BSE Sensex

53,161.28

53,018.22

53,406.93

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Oil and Natural Gas Corporation

241.88

141.90

138.56

143.91

Hindalco Industries

150.14

329.00

324.24

335.89

Power Grid Corporation of India

131.59

211.60

209.71

213.41

NTPC

128.72

138.70

137.29

139.59

Tata Motors

120.18

413.00

410.41

417.51

 

  • Coal India is planning to set up and operationalize nine more new washeries with a capacity of 30 MTPA. 
  • Fitch Ratings has affirmed a BBB- rating to gas utility GAIL (India), with a stable outlook, on premise that the its financial profile will remain strong. 
  • Bajaj Auto has launched an all-black variant of its Pulsar 250 model with dual-channel ABS (anti-lock braking system). 
  • Global rating agency S&P has affirmed BBB- rating on ICICI Bank with stable outlook on improved asset quality.
News Analysis