Snapping four
day winning streak, Indian equity benchmarks ended Tuesday's trade in red
terrain with frontline gauges ending below their crucial 49,200 (Sensex) and
14,900 (Nifty) levels. Markets started the day on pessimistic note amid
concerns that the second wave of the coronavirus pandemic could bring down
India's GDP growth. Sentiments also remained down beat after domestic rating
agency Crisil warned India's economic growth may slip to 8.2 per cent in FY22
if the second wave peaks in end of June, maintaining its baseline estimate of
11 per cent uptick in activity. Adding more pessimism, State Bank of India's
economic research arm warned that a huge buildup of carry positions could
negatively impact the exchange rate and lead to inflation. Besides, Regulator
Sebi came out with disclosure requirements under business responsibility and
sustainability reporting, covering environmental, social and governance
perspectives, which will be applicable on the top 1,000 listed entities by
market capitalisation. However, markets pared some of their initial losses in
noon deals but recovery proved short lives as sentiments turned fragile as
World Health Organziation states that the coronavirus variant first identified
in India last year was being classified as a variant of global concern, with
some preliminary studies showing that it spreads more easily. The WHO has said
the predominant lineage of B.1.617 was first identified in India in December,
although an earlier version was spotted in October 2020. Traders were also
remained anxious as Fitch Ratings said that there are growing indications that
India's latest wave of Covid-19 infections will add to risks among financial
institutions (FIs) by sapping near-term momentum from the economic recovery.
Measures announced by the Reserve Bank of India (RBI) on May 5 will provide
some relief to FIs in the next 12 to 24 months, but largely at the expense of
postponing the recognition and resolution of underlying asset-quality problems.
Finally, the BSE Sensex declined 340.60 points or 0.69% to 49,161.81, while the
CNX Nifty was down by 91.60 points or 0.61% to 14,850.75.
The US markets
ended lower on Tuesday on concerns about acceleration in the rate of inflation
and potential monetary policy tightening by the Federal Reserve. The Fed has
attributed the increase in inflation to transitory factors, although street has
suggested the central bank will still begin considering tapering its asset
purchases in the coming months. Adding to the inflation concerns, the Labor
Department released a report showing the number of job openings reached a
series high of 8.1 million on the last business day of March. The data led to
worries that employers will have to raise wages to entice workers, which could
carry over into higher inflation. Besides, Housing stocks turned in some of the
worst performances on the day, with the Philadelphia Housing Sector Index
plunging by 3.2 percent after ending the previous session at its best closing
level since a two-for-one split in early 2006. Substantial weakness was also
visible among oil stocks, as reflected by the 2.4 percent slump by the NYSE
Arca Oil Index. The index extended the pullback seen after it reached a
one-year intraday high in early trading on Monday. The weakness among oil
stocks came even though the price of crude oil turned higher over the course of
the session after an early drop.
Crude oil futures ended higher on
Tuesday as lingering fears of gasoline shortages due to the outage at the
largest US fuel pipeline system after a cyber-attack brought futures back from
an early drop of more than 1%. Besides, the Organization of the Petroleum
Exporting Countries (OPEC) raised its forecast for demand for its crude by
200,000 bpd and stuck to its prediction of a strong recovery in global oil demand
this year as growth in China and the United States counters the coronavirus
crisis in India. Crude oil futures for June rose 36 cents or 0.6 percent to
settle at $65.28 barrel on the New York Mercantile Exchange. July Brent crude
gained 23 cents or 0.3 percent to settle at $68.55 a barrel on London's
Intercontinental Exchange.
Indian rupee ended almost flat
against dollar on Tuesday, amid worries that accelerating U.S. inflation could
lead to interest rate hikes sooner than expected. Traders were also worried as
Crisil said that India's gross domestic product (GDP) growth can drop to 8.2 per
cent in the current financial year (2021-22) if second wave of coronavirus
pandemic peaks by June-end. Adding more pessimism, World Health Organziation
stated that the coronavirus variant first identified in India last year was
being classified as a variant of global concern, with some preliminary studies
showing that it spreads more easily. On the global front, greenback held near
multi-month lows on growing concerns about price pressures. Finally, the rupee
ended 73.34, stronger by 1 paise from its previous close of 73.35 on Monday.
The FIIs as per Tuesday's data
were net buyer in equity segment, while net seller in debt segment. In equity
segment, the gross buying was of Rs 6805.82 crore against gross selling of Rs
5637.09 crore, while in the debt segment, the gross purchase was of Rs 571.14
crore against gross selling of Rs 588.56 crore. Besides, in the hybrid segment,
the gross buying was of Rs 10.59 crore against gross selling of Rs 19.12 crore.
The US markets ended lower on
Tuesday as rising commodity prices and labor shortages fed fears that despite
reassurances from the US Federal Reserve, near-term price spikes could
translate into longer-term inflation. Asian markets are trading mostly in red
on Wednesday as investors speculated surging commodity prices and growing
inflationary pressure in the United States could lead to earlier rate hikes and
higher bond yields globally. Indian markets snapped four-day gaining streak and
ended lower on Tuesday dragged by selling in metals, pharma and IT stocks.
Today, the markets are likely to continue sluggish momentum with negative start
amid weakness in global peers coupled with worries over economic growth.
Investors will be eyeing the key economic data on industrial output and
inflation to be released later in the day. Traders will be concerned as rating
agency Moody's cut India's gross domestic product (GDP) forecast for FY22 to
9.3 per cent from the earlier projection of 13.7 per cent and has ruled out a
sovereign rating upgrade - at least for now. The downward revision in GDP
estimates comes on the back of a second wave of Covid infections across the
country, which triggered localised lockdowns and mobility curbs, except for
essential services. There will be some cautiousness as the United Nations said
India is forecast to grow at 10.1 per cent in 2022, becoming the
fastest-growing major economy in the world, but cautioned that the growth
outlook of 2021 was highly fragile as the country was the new hotbed of the
pandemic. However, some respite may come later in the day as active Covid cases
declined for the third straight day and the fresh Covid cases remained below
the 3.5 lakh mark for the second day in a row at 3,48,371. Some support may
come as Commerce and Industry Minister Piyush Goyal said a sharp rise in
exports in April is giving a hope that the ambitious target of USD 400 billion
merchandise shipments can be achieved this year. He also said that the
Department of Commerce has taken up several issues of exporters with the
Ministry of Finance for their early resolution, like RoDTEP (remission of
duties and taxes on export products), MEIS (merchandise export from India
scheme), and inverted duty structure. There will be some buzz in aviation
stocks as Moody's Investors Service revised its outlook for the global airlines
industry to positive from negative, reflecting that industry fundamentals will
materially improve over the next 12 to 18 months. Mining and construction
equipment industry stocks will be in focus as ICRA said the mining and
construction equipment industry is likely to grow by 15-20 per cent in the
calendar year 2021 but stressed that the economy, in the grip of a pandemic,
could throw up sudden negative surprises. There will be some reaction in metal
stocks with report that the government has proposed to slash import duties on
steel items further bringing it to zero or near zero levels to provide relief
to MSMEs, which have been hit hard by the high cost of raw materials amidst the
raging pandemic. Telecom stocks will be in limelight as TRAI data showed
Reliance Jio added 4.2 million mobile subscribers, Bharti Airtel added 3.7
million users, while Vodafone Idea added 6.5 lakh users in February.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
14,850.75
|
14,781.44
|
14,910.04
|
BSE
Sensex
|
49,161.81
|
48,998.51
|
49,314.80
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Indian Oil Corporation
|
769.07
|
103.70
|
99.54
|
106.14
|
Coal India
|
665.82
|
155.70
|
148.31
|
159.91
|
Tata Motors
|
584.72
|
315.55
|
308.85
|
321.50
|
Oil & Natural Gas Corporation
|
483.55
|
118.10
|
113.00
|
120.95
|
NTPC
|
456.13
|
112.70
|
108.46
|
115.16
|
IOC is converting 14 LNG tankers into medical grade oxygen carriers as the nation's largest oil firm steps in to augment oxygen-carrying capacity in the country to aid COVID patients.
Coal India's Singrauli-based flagship arm -- Northern Coalfields is installing two oxygen generating plants.
UPL's subsidiary has entered into a license agreement with Japanese company, Meiji Seika Pharma for exclusive access to Flupyrimin for rice in Southeast Asia.
JSW Steel has reported 13.71 lakh tonnes crude steel production in April 2021, registering a fall of 5% as compared to 14.46 lakh tonnes in March 2021.