Daily Newsletter
NSE Intra-day chart (31 May 2022)
Top Gainers
Company NameClose% Change
Top Losers
Company NameClose% Change
World Indices
IndicesLast Trade% Change
Indices
IndicesLast Trade% Change
FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
Equity
Debt
Equity
Debt
Equity
Debt
 
Market Commentary 01 June 2022
Benchmarks to make negative start amid weak Q4 GDP data

 

Indian equity benchmarks snapped their 3-day winning streak to end lower in a highly volatile session on Tuesday, as investors are eyeing GDP numbers for the fourth quarter of the previous fiscal year (2021-22) to be out later in the day. As per the expectations, India's economy likely slowed in the fourth quarter and is expected to grow between 3.5-5.5 percent. Markets made gap-down opening, as traders were anxious with domestic ratings agency India Ratings stating that the GST has not helped states achieve the key objective of boosting their tax revenue. The rating agency said that the data does not point to any benefits to the states in the last five years since the implementation of GST (Goods and Services Tax). However, key indices managed to trim most of their losses in afternoon deals, taking support from secretary at the department of economic affairs, Ajay Seth's statement that India's inflation should ease in the coming months following steps taken by the Union government and as global prices coming off in May will have a salutary impact. Though, markets failed to hold on to recovery mode and fell sharply in late afternoon deals, as some pessimism remained among traders with private report stated that soaring prices and the subsequent hit to consumer spending and investments are likely to further dampen India's economy, as the central bank faces a finely balanced struggle to tame inflation via rate hikes without hurting economic growth. Some concern also came amid a private report stating that India's economy probably grew slower than previously estimated last year, with virus curbs in the final quarter seen as a drag on activity while the war in Europe has added a new inflation hurdle to recovery. Meanwhile, Department of Financial Services (DFS) secretary Sanjay Malhotra has said that advance action is underway for privatisation of two public sector banks (PSBs) in pursuance of the announcement made by finance minister Nirmala Sitharaman. Finally, the BSE Sensex fell 359.33 points or 0.64% to 55,566.41 and the CNX Nifty was down by 76.85 points or 0.46% to 16,584.55. 

 

The US markets ended lower on Wednesday as concerns about soaring inflation and looming policy tightening by the Federal Reserve rendered the mood bearish. Federal Reserve governor Christopher Waller said that he favored 50 basis point hike at every meeting until there is a substantial reduction in inflation. Further, sentiments were weak after a report released by the Conference Board showed a modest decrease in US consumer confidence in the month of May. The Conference Board said its consumer confidence index dipped to 106.4 in May from an upwardly revised 108.6 in April. Streel had expected the consumer confidence index to drop to 104.0 from the 107.3 originally reported for the previous month. The report showed the present situation index fell to 149.6 in May from 152.9 in April, while the expectations index declined to 77.5 from 79.0. On the sectoral front, Energy stocks shed ground after oil prices pared early gains and drifted lower on reports some OPEC members are in favor of suspending Russia's participation in the oil-production deal. In the stock specific developments, Johnson & Johnson, Honeywell International, Boeing and 3M shed about 2 to 2.8 percent in the session. Merck, Coca-Cola, Cisco Systems, American Express, JP Morgan Chase, Visa, Caterpillar and McDonalds also ended notably lower.

 

Crude oil futures ended lower on Tuesday  after  private report stated that some members of the Organization of the Petroleum Exporting Countries were weighing exempting Russia from oil-production targets, which would allow other countries to pump more crude. However, a drop in coronavirus cases in Beijing and improved Chinese PMI data raised hopes that energy demand in the world's second largest economy will pick up and contributed significantly to the uptick in oil prices. Benchmark crude oil futures for July delivery fell 40 cents or 0.35% percent to settle at $114.67 a barrel on the New York Mercantile Exchange. However, Brent crude for July delivery gained $1.17 or 1 percent to settle at $122.84 a barrel on London's Intercontinental Exchange.

 

Indian rupee depreciated significantly against dollar on Tuesday, on account of sustained dollar demand from importers and banks. Traders were anxious with private report stated that soaring prices and the subsequent hit to consumer spending and investments are likely to further dampen India's economy, as the central bank faces a finely balanced struggle to tame inflation via rate hikes without hurting economic growth. Some concern also came amid a private report stating that India's economy probably grew slower than previously estimated last year, with virus curbs in the final quarter seen as a drag on activity while the war in Europe has added a new inflation hurdle to recovery. On the global front, euro's losses deepened on Tuesday after data showing eurozone inflation hit a record high in May, but expectations the European Central Bank will soon hike rates kept the single currency on track for its best monthly performance in a year. Finally, the rupee ended at 77.68 (Provisional), weaker by 14 paise from its previous close of 77.54 on Monday.

 

The FIIs as per Tuesday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 9252.95 crore against gross selling of Rs 6971.74 crore, while in the debt segment, the gross purchase was of Rs 758.26 crore against gross selling of Rs 383.33 crore. Besides, in the hybrid segment, the gross buying was of Rs 16.55 crore against gross selling of Rs 13.08 crore.

 

The US markets ended lower on Tuesday as volatile oil markets kept soaring inflation in focus and investors reacted to hawkish comments from a Federal Reserve official. Asian markets are trading mixed on Wednesday with investors watching for market reaction to the release of a private survey on Chinese factory activity for May. Indian markets snapped a three-day gaining streak on Tuesday amid tepid global mood. Today, the start of session is likely to be negative amid lackluster global cues. Investors will closely monitor the manufacturing PMI data for May, which will be released later in the day. Traders will be concerned as the government data showed that India's economic growth hit a four-quarter low of 4.1%, partly driven by base effect. The growth was 20.1%, 8.4%, and 5.4%, in the first, second and third quarters, respectively. Some cautiousness may be come as foreign Institutional Investors (FII) were once again net sellers of domestic stocks. FIIs pulled out Rs 1,003 crore from Dalal Street. However, some support may come later in the day as chief economic adviser (CEA) V Anantha Nageswaran said the Indian economy is better placed than other countries and the fear of stagflation is exaggerated. Traders may be taking encouragement as production growth of eight infrastructure sectors rose to a six-month high of 8.4 per cent in April on the back of better performance by coal, refinery products and electricity segments. Traders may take note of India Meteorological Department Director General Mrutyunjay Mohapatra's statement that the average rainfall this monsoon season is expected to be 103% of the long period average. India can expect more rainfall this monsoon season than predicted earlier. In April, the IMD had said the country would receive normal rainfall -- 99% of the long period average. Besides, Fiscal deficit for 2021-22 improved to 6.71 per cent of the GDP over the revised budget estimate of 6.9 per cent mainly on account of higher tax realisation. Sugar stocks will be in focus as the data released by cooperative body NFCSFL showed that sugar production in India, the world's largest producer and second-largest exporter, rose 15 per cent to a record 35.24 million tonne till May 30 in the ongoing 2021-22 marketing year on higher output in Maharashtra and Karnataka. There will be some reaction in edible oil industry stocks as the government said India has slashed the base import prices of crude and refined palm oil, while raising the price of crude soyoil. Textile industry stocks will be in limelight as the government said India recorded its highest-ever textiles and apparel exports in the financial year 2021-22 at $44.4 billion.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

16,584.55

16,507.39

16,676.24

BSE Sensex

55,566.41

55,315.16

55,871.64

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

NTPC

1,246.65

157.60

152.64

160.29

Oil & Gas corporation of India

576.75

151.55

146.96

154.56

Bharti Airtel

445.93

704.90

696.14

710.14

Hindalco Industries

391.15

427.00

416.50

433.00

Reliance Industries

325.91

2,623.60

2,599.94

2,663.04

 

  • M&M has planned the sale of its 2.76 percent stake in TVS Automobile Solutions. 
  • Power Grid Corporation of India has acquired Mohanlalganj Transmission, the Project SPV to establish Intra State Transmission System. 
  • The government has allocated a project worth Rs 847.95 crore to Bharti Airtel for providing 4G mobile services in uncovered villages of aspirational districts.  
  • Sun Pharmaceutical Industries is eyeing high single-digit top-line growth in the current financial year with all its business verticals well placed to lead the charge.
News Analysis