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NSE Intra-day chart (26 May 2023)
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Market Commentary 29 May 2023
Benchmarks likely to make gap-up opening on Monday

 

Indian equity benchmarks rallied around a percent with Sensex recapturing 62,500 mark and nifty ending just shy of 18,500 mark, after reports suggested that U.S. lawmakers are inching closer to an agreement that would raise the debt limit for about two years and cap federal spending at the same level as fiscal 2023 for two years. Report that India will have normal monsoon this year too aided sentiments. Markets made a positive start supported by sharp fall in oil prices overnight coupled with continued FII inflows aided the domestic sentiments. The provisional data from the National Stock Exchange showed foreign institutional investors (FIIs) bought shares worth Rs 589.10 crore on May 25. The investors' mood remained up-beat throughout the day and there appeared not even an iota of profit booking, as investors continued hunt for fundamentally strong stocks. Markets gained strength as traders took encouragement with report that India's services exports are expected to overtake merchandise exports in the next five years on the back of above-par growth in emerging areas of service economy. Traders also took note of Chief Economic Adviser V Anantha Nageswaran's statement that there are signs of private sector investment cycle unfolding and sectors like steel and cement have reached a stage where greenfield investment will take place. Markets extended gains and ended near intraday high levels as traders cheered reports of Normal Monsoon this year. India has reconfirmed its expectation of a normal monsoon this year, alleviating concerns regarding weather-related impacts on inflation. During the June-September season, the rainfall is projected to be around 96 percent of the long-term average. Sentiments also got boost with foreign brokerage expressing confidence in India's enduring structural narrative and believes that it is only a matter of time before the BSE benchmark Sensex crosses the remarkable 1,00,000 milestone. Finally, the BSE Sensex surged 629.07 points or 1.02% to 62,501.69 and the CNX Nifty was up by 178.20 points or 0.97% to 18,499.35.

 

The US markets ended higher on Friday. Markets benefitted from renewed optimism about raising the U.S. debt ceiling amid private reports lawmakers are closing in on an agreement. Reports suggest lawmakers are inching closer to an agreement that would raise the debt limit for about two years and cap federal spending at the same level as fiscal 2023 for two years. The deal would also include rescinding some of the $80 billion allocated for the IRS by last year's Inflation Reduction Act. On the sectoral front, Technology stocks once again led the rally on Wall Street, with semiconductor stocks showing another substantial move to the upside. Reflecting the strength in the sector, the Philadelphia Semiconductor Index spiked 6.3 percent to its best closing level in well over a year. Networking, computer hardware and software stocks also saw significant strength on the day, contributing to the surge by the Nasdaq. On the economic data front, consumer sentiment in the U.S. deteriorated less than previously estimates in the month of May, according to revised data released by the University of Michigan. The report said the consumer sentiment index for May was upwardly revised to 59.2 from the preliminary estimate of 57.7. street had expected the index to be unrevised. The consumer sentiment index is still down from 63.5 in April and at its lowest level since hitting 59.7 last December.

 

Crude oil futures ended higher on Friday. Crude oil prices were supported by reports that U.S. lawmakers are closing in on a deal that would raise the government's $31.4 trillion debt ceiling for two years while capping spending on most items. Support also came in as U.S. demand for gasoline is expected to remain strong. According to the data released by Baker Hughes, total active drilling rigs in the U.S. fell by another 9 to 711, the lowest count in a year. Drilling rigs targeting crude oil in the U.S. fell by 5 to 570, its lowest number since last May, and gas rigs dropped by 4 to 137, the lowest since March last year. Total rigs targeting crude oil in the Permian Basin gained 1 to 347. Benchmark crude oil futures for July delivery rose $0.84 or about 1.2 percent to settle at $72.67 a barrel on the New York Mercantile Exchange. Brent crude for July delivery gained $0.69 or 0.9 percent to settle at $76.95 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended higher on Friday, supported by foreign capital inflows and a positive trend in domestic equities. Traders got encouragement with report that India's services exports are expected to overtake merchandise exports in the next five years on the back of above-par growth in emerging areas of service economy. Besides, India Meteorological Department (IMD) said that India is likely to receive normal monsoon rains in 2023 despite the likely emergence of the EI Nino weather phenomenon. On the global front, dollar eased on Friday but stayed on track for a third straight weekly gain, as markets raised bets on higher-for-longer interest rates to curb sticky inflation and nervously awaited resolution of last-ditch talks on the U.S. debt ceiling. Finally, the rupee ended at 82.58 (Provisional), stronger by 14 paise from its previous close of 82.72 on Thursday.

 

The FIIs as per Friday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 10533.10 crore against gross selling of Rs 8021.42 crore, while in the debt segment, the gross purchase was of Rs 1837.45 crore against gross selling of Rs 690.88 crore. Besides, in the hybrid segment, the gross buying was of Rs 5.55 crore against gross selling of Rs 308.99 crore.

 

The US markets ended higher on Friday as President Joe Biden and top congressional leaders reached a tentative deal to raise the debt limit. Asian markets are trading mostly in green on Monday tracing gains on Wall Street. Indian markets ended higher for the second consecutive session on Friday, starting the June series on a positive note, helped by gains in heavyweight RIL and buying across sectors. Today, markets are likely to get gap-up opening after the US reached a tentative deal over the weekend to raise the debt ceiling, which will likely avert a looming default. Foreign fund inflows likely to aid domestic sentiments. Foreign Portfolio Investors (FPIs) have pumped Rs 37,316 crore in Indian equities in May so far, primarily due to strong macroeconomic fundamentals and reasonable valuation of stocks. This is the highest investment by FPIs in the last six months. Besides, foreign institutional investors (FIIs) bought shares worth Rs 350.15 crore, while domestic institutional investors (DIIs) purchased shares worth Rs 1840.98 crore on May 26, provisional data from the National Stock Exchange showed. Some support will come as Union minister Ashwini Vaishnaw said enabling policies and grassroot initiatives of the Modi-led government have led to social and economic transformation of the country since 2014, and the nation is all set to become the fourth largest economy in the world within two years. Additional support will come as World Economic Forum (WEF) President Borge Brende said India is expected to clock the highest growth among the world's big economies this year and the country's economy is witnessing the famous snowball effect that will lead to more investments and more jobs. Traders may take note of report that domestic rating agency Icra expects GDP growth in January-March period of 2022-23 at 4.9 per cent, a modest step-up from the 4.4 per cent recorded in preceding quarters, driven by the services sector. However, there may come cautiousness as Chairman of the CII Committee on EXIM Sanjay Budhia said economic recession in Germany is likely to impact India's exports from various sectors like chemicals, machinery, apparel and electronics to the European nation. Traders may be concerned as RBI said India's foreign exchange reserves dropped by $6.052 billion to $593.477 billion during the week ended May 19. There will be some reaction in infrastructure related stocks with report that as many as 384 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.66 lakh crore in January-March quarter.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

18,499.35

18,385.49

18,560.89

BSE Sensex

62,501.69

62,098.93

62,717.15

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

283.62

106.45

105.35

107.15

Oil & Natural Gas Corporation

148.74

164.00

161.74

166.84

HDFC Bank

133.18

1617.00

1606.50

1623.25

ITC

129.96

443.95

440.71

445.96

ICICI Bank

109.57

950.50

939.89

956.79

 

  • Tata Motors has inaugurated new state-of-the-art showroom in Surat and Bardoli. 
  • Mahindra & Mahindra has reported 14.96% rise in its consolidated net profit at Rs 2998.37 crore for Q4FY23 as compared to Rs 2608.13 crore for the same quarter in the previous year.
  • Reliance Industries' subsidiary - RRVL's wholly-owned subsidiary -- Reliance Consumer Products has completed the acquisition of 51% controlling stake in Lotus Chocolate Company. 
  • Grasim Industries has reported 42.13% fall in its consolidated net profit at Rs 2,355.67 crore for Q4FY23 as compared to Rs 4,070.46 crore for the same quarter in the previous year.
News Analysis