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NSE Intra-day chart (28 March 2022)
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Market Commentary 29 March 2022
Benchmarks to make optimistic start amid sharp fall in crude oil prices

 

Indian equity benchmarks were trading lower but staged a comeback to end with gains of around half percent on Monday amid renewed buying in Oil & Gas, Banking and Energy shares. Besides, a fall in crude oil prices, and stability in global markets on hopes of fresh round of talks between Russia and Ukraine supported the sentiment. Both the indices had opened marginally lower earlier in the day and extended losses in the morning trade, as some cautiousness crept in as Petrol and diesel prices were hiked by 80 paise a litre each on March 26, the fourth increase in five days as oil firms passed on to consumers the spike in cost of raw material. Sentiments remained down-beat with depositories data showed that overseas investors have pulled out a net Rs 1,14,855.97 crore from the Indian markets in the current year so far, amid heightened geopolitical tensions and inflation concerns. Foreign portfolio investors have sold domestic equities worth Rs 48,261.65 crore so far this month, taking the year-to-date tally this year to a massive Rs 1,14,855.97 crore. Some concern also came with report that as many as 421 infrastructure projects, each entailing investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.73 lakh crore. However, key gauges erased their losses and turned positive towards the afternoon, as traders found support with Niti Aayog Vice-Chairman Rajiv Kumar's statement that the country can double its economy in about 7-8 years if it grows at the rate of 8 per cent, which is feasible as the country has sustained a growth rate of 8.5 per cent earlier for a long time. Some support also came as Union minister Ashwini Vaishnaw stating that Indian economy can grow consistently at 8 per cent for the next 20 years leading to the generation of up to 1.5 crore new jobs and bringing out 3.5 crore people out of the poverty every year on the basis of the capital investment strategy of the government. Adding to the optimism, Commerce and Industry Minister Piyush Goyal has said that the free trade agreement between India and the UAE is likely to come into effect from May 1, 2022, under which domestic exporters of as many as 6,090 goods from sectors like textiles, agriculture, dry fruits, gem and jewellery would get duty-free access to the UAE market. Finally, the BSE Sensex rose 231.29 points or 0.40% to 57,593.49 and the CNX Nifty was up by 69.00 points or 0.40% to 17,222.00.

 

The US markets ended higher on Monday as hopes about a peace deal between Russia and Ukraine helped offset concerns about inflation and imminent monetary tightening by the Federal Reserve. Russia and Ukraine are set to resume diplomatic talks in Turkey on Tuesday. Russia has reportedly signaled that it may scale down its war and aims to concerntrate on eastern Ukraine. Ukraine President Zelenskyy also said he wants to make a deal with Moscow over Sonbas and he is willing to discuss adopting a neutral status too. Stock specific developments, Tesla Inc. shares soared more than 8 percent following an announcement from the company that it would seek investor approval for a stock split. AMC Entertainment shares soared nearly 45 percent. The movie theater company's CEO Adam Aron said more transformational M&A deals are on the way. However, Energy stocks drifted lower, tracking weak crude oil prices. Oil prices tumbled amid concerns about the outlook for energy demand after Shanghai decided to impose fresh lockdown restrictions to curb the spread of the Covid-19 infections.

 

Crude oil futures ended deeply in red on Monday as concerns over new lockdowns in China and the potential impact on demand sent prices tumbling. China is the world's largest oil importer, so any slowdown in demand will weigh on prices. The nation uses around 15 million barrels per day, and imported 10.3 million barrels per day in 2021. Besides, investors also closely followed the developments on the Russia-Ukraine war front. Russia and Ukraine are set to begin talks in Turkey on Tuesday. Ukraine President Zelenskyy also said he wants to make a deal with Moscow over Donbas and he is willing to discuss adopting a neutral status too. Benchmark crude oil futures for May delivery fell $7.94 or 7 percent to settle at $105.96 a barrel on the New York Mercantile Exchange. Brent crude for May delivery dropped $9.57 or 8.1 percent to settle at $107.80 a barrel on London's Intercontinental Exchange.

 

Continuing previous session gains, Indian rupee ended higher against dollar for third straight session on Monday, on persistent selling of the American currency by exporters. Adding to the optimism, Commerce and Industry Minister Piyush Goyal has said that the free trade agreement between India and the UAE is likely to come into effect from May 1, 2022, under which domestic exporters of as many as 6,090 goods from sectors like textiles, agriculture, dry fruits, gem and jewellery would get duty-free access to the UAE market. On the global front, Japanese yen crashed to a six-year low versus the dollar on Monday, and headed for its biggest daily loss since March 2020 after the Bank of Japan moved to contain rising bond yields, even as U.S. Treasury yields soared to new multi-year highs. Finally, the rupee ended at 76.16 (Provisional), stronger by 8 paise from its previous close of 76.24 on Friday.

 

The FIIs as per Monday'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 6773.58 crore against gross selling of Rs 8163.16 crore, while in the debt segment, the gross purchase was of Rs 2030.09 crore against gross sales of Rs 1292.02 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.68 crore against gross selling of Rs 9.50 crore.

 

The US markets ended higher on Monday led by sharp gains in Tesla after the latter announced plans for stock split. Asian markets are trading mostly in green on Tuesday following a tumble in oil prices overnight. Indian markets climbed higher on Monday amid volatility, snapping a 3-day losing streak, as shares in Asian markets largely remained positive. Today, the markets are likely to make optimistic start tracking overnight sharp fall in crude oil prices. Also, Markets will keenly watch Russia-Ukraine talks in Turkey today for any cues on de-escalation of the conflict. Traders will be taking encouragement as Commerce and industry Minister Piyush Goyal said the free trade agreement between India and the UAE has opened huge opportunities and businesses of both countries should look at taking the bilateral trade to $250 billion by 2030. Some support will come as Sumant Sinha, the newly elected president of Assocham, said that India needs a strong contract-enforcement agency, a simple GST regime and simplified taxation process along with a stable policy environment to significantly improve ease of doing business. Traders may take note of S&P Global Ratings' statement that the Reserve Bank of India (RBI) would be compelled to signal a neutral policy stance in the Monetary Policy Committee's review meeting in April as average consumer inflation is likely to stay firm at 5.4 per cent in FY23. It added the RBI will likely raise the repo rate by at least 50-75 basis points through fiscal year 2023, and by another 50 basis points in fiscal 2024. However, there may be some cautiousness as the latest public debt management report showed that the government's total liabilities rose to Rs 128.41 lakh crore in December quarter from Rs 125.71 lakh crore in the three months ended September 2021. The increase reflects a quarter-on-quarter increase of 2.15 per cent in October-December 2021-22. Coal industry stocks will be in focus as ICRA said the price of imported coal is poised to rise by 45-55 per cent in the first quarter of FY23 as markets face supply disruption following the Russia-Ukraine conflict and it would severely impact domestic users of imported dry fuel. There will be some reaction in aviation industry stocks as Minister of State for Civil Aviation V K Singh said airports across India will see 33.81 crore passengers in 2022-23, 69.35 per cent more than the current financial year. Defence industry stocks will be in limelight as the government said that a total of Rs 3,343 crore has been received as foreign direct investment (FDI) in the defence sector since 2014. Besides, Veranda Learning Solutions' Rs 200-crore IPO will open for subscription on Tuesday, at a price band of Rs 130-137 per equity share.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,222.00

17,072.24

17,303.44

BSE Sensex

57,593.49

57,066.28

57,879.53

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ITC

249.16

256.20

253.16

258.61

Coal India

191.32

191.15

186.54

194.74

Tata Motors

167.57

432.60

427.75

436.20

State Bank of India

167.38

497.75

486.94

503.59

Oil & Natural Gas Corporation

152.53

175.50

174.14

177.39

 

  • Coal India's subsidiary -- North Eastern Coalfields has resumed its mining operations at Tikak colliery in Assam. 
  • L&T's building business has set a record by constructing the 7 storey, state-of-the-art FCS Integration Facility for the DRDO in just 45 days using IHMCT. 
  • Bharti Airtel has entered into an agreement for acquisition of 7.04% equity stake in Avaada KNShorapur. 
  • HCL Technologies has been selected to provide global service desk and on-site support to Novo Nordisk.
News Analysis