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NSE Intra-day chart (31 October 2022)
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Market Commentary 01 November 2022
Markets likely to make positive start tracking Asian counterparts

 

Indian equity benchmarks extended their gains for third straight day and settled with gains of over a percent on Monday, tracking gains in Asian equities and a fall in oil prices. Markets started the week on a robust note amid steady foreign flows. Foreign institutional investors (FIIs) net bought shares worth Rs 1,568.75 crore on 28 October, according to the provisional data available on the NSE. Sentiments got a boost as Union Minister for Commerce and Industry Piyush Goyal said that foreign trade would become a truly defining feature that would help India become a $30 trillion economy in the Amrit Kaal. Some support also came with a private report that India is expected to surpass its tax collection goal by more than Rs 2 lakh crore ($24.3 billion) in the current fiscal year. Key gauges added gains in late afternoon session, taking support from the Prime Minister Narendra Modi's statement that India has become a major manufacturing hub and a new saga of economic reforms is being written in the country as his government's policies are stable, predictable and futuristic. Traders overlooked data released by Reserve Bank of India showing that India's foreign exchange (forex) reserves declined $3.8 billion to $524.5 billion for the week ending October 21. Reserves are at their lowest levels since July 2020. Since last year, reserves have declined by $115 billion. Meanwhile, Union finance minister Nirmala Sitharaman has asked states to adopt a multi-modal approach and ensure logistics did not become a burden on exporters. She said the PM Gati Shakti was a beautiful protocol with which a synergy could be brought in. She also said the commerce ministry was working on getting an export policy that would help the exporters by giving them incentives and promoting many things. Finally, the BSE Sensex rose 786.74 points or 1.31% to 60,746.59 and the CNX Nifty was up by 225.40 points or 1.27% to 18,012.20.

 

The US markets ended lower on Monday as traders looked ahead to the Federal Reserve's policy announcement due on Wednesday. The Fed, which is set to meet on Tuesday and Wednesday, is widely expected to raise interest rate by another 75 basis points - its fourth straight rate hike - to fight soaring inflation. Meanwhile, traders continued to react to recent quarterly earnings updates from big-name companies. Among the prominent losers in the session was Apple Inc (AAPL), which drifted down more than 1.5 percent on reports the production of the company's iPhones could drop by around 30 percent next month. A surge in Covid-19 curbs in China is cited as the reason for the likely drop in production. Amazon Inc, Microsoft Corp and Alphabet Inc shed about 1 percent, 1.6 percent, and 1.8 percent, respectively. Shares of Meta Platforms Inc plunged more than 6 percent. Intel (INTC) lost about 2.2 percent. Coco-Cola (KO), American Express (AXP) and Amgen (AMGN) lost 1.25 to 1.4 percent. On the economic data front, a report from the Institute for Supply Management (ISM) showed the Chicago PMI in the US dropped to 45.20 points in October from 45.70 points in September of 2022. The reading was the lowest since June of 2020.

 

Crude oil futures ended lower on Monday amid concerns about the outlook for energy demand from China following imposition of severe curbs in several places in the country due to a surge in Covid-19 cases. Further, a rise in oil output in the US, and a firm dollar weighed as well on crude oil prices. According to the data released by the government, oil output in the US rose to nearly 12 million barrels per day in August, the highest since the pandemic. Benchmark crude oil futures for December delivery fell $1.37 or about 1.6 percent at $86.53 a barrel on the New York Mercantile Exchange. Brent crude for January delivery dropped $1.12 or about 1.19 percent to settle at $92.65 (Provisional) a barrel on London's Intercontinental Exchange.   

 

Extending losses for the second straight session, Indian rupee ended considerably lower against dollar on Monday, on account of sustained dollar demand from importers and banks. Traders were worried as data released by Reserve Bank of India showed India's foreign exchange (forex) reserves declined $3.8 billion to $524.5 billion for the week ending October 21. Reserves are at their lowest levels since July 2020. Since last year, reserves have declined by $115 billion. Further, a broad strengthening of the US dollar put pressure on the home currency. On the global front, dollar advanced on Monday, regaining some ground lost earlier in the month, at the start of a week packed with data releases and central bank rate setting meetings, including by the Bank of England and the Federal Reserve. Finally, the rupee ended at 82.81 (Provisional), weaker by 34 paisa from its previous close of 82.47 on Friday.

 

The FIIs as per Monday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 7318.14 crore against gross selling of Rs 5740.37 crore, while in the debt segment, the gross purchase was of Rs 723.22 crore against gross selling of Rs 2707.80 crore. Besides, in the hybrid segment, the gross buying was of Rs 21.87 crore against gross selling of Rs 23.62 crore.

 

The US markets ended lower on Monday as investor focus turned to the Federal Reserve's policy meeting this week. Asian markets are trading in green on Tuesday ahead of Australia's central bank decision and the results of a private survey on Chinese factory activity. Indian markets extended their gains into third straight day on Monday as global markets bounced back. Today, markets are likely to start new month on optimistic note supported by steady foreign flows coupled with drop in crude oil prices. Foreign institutional investors (FIIs) net bought shares worth Rs 4,178.61 crore on October 31, according to the provisional data available on the NSE. Sentiments will get a boost as production of eight infrastructure industries that comprise the core sector recovered to grow at 7.9 per cent in September - a three-month high - owing to a favourable base and double-digit growth in output of fertilisers, cement, and electricity. Some support will come as Chief Economic Adviser V Anantha Nageswaran said India is expected to clock better growth than IMF's projections next year aided by enhanced capital formation. Recently, the International Monetary Fund (IMF) projected 6.8 per cent real growth for this year and 6.1 per cent for next year for India. However, there may be some cautiousness as data released by the Controller General of Accounts showed that the Central government's fiscal deficit widened to Rs 6.20 lakh crore in April-September, accounting for 37.3 percent of the full-year target. Traders may be concerned as the government data showed that retail inflation for industrial workers rose to 6.49 per cent in September from 5.85 per cent in August 2022 mainly due to higher prices of certain food items. There will be some reaction in edible oil industry stocks with a private report that India increased the base import prices of crude and refined palm oil and crude soya oil, following a surge in prices in the global market. Sugar stocks will be in focus as cooperative body NFCSFL data showed that sugar production in India, the world's major producer, fell 14.73 per cent year on year to 4.05 lakh tonnes in the first month of the 2022-23 marketing season. There will be some reaction in gold industry stocks as the World Gold Council (WGC) said India's gold consumption in the months of October to December could fall by around a quarter from a year ago as inflation depresses rural demand. Auto stocks will be in limelight reacting to their monthly sales numbers to be out from today. Investors await more of financial results from India Inc for domestic cues, with Adani Ports, Tech Mahindra and Nykaa due to post their earnings later in the day.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

18,012.20

17,933.80

18,056.70

BSE Sensex

60,746.59

60,400.14

60,939.88

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

387.15

101.10

100.21

102.06

NTPC

242.33

173.45

170.34

175.29

ITC

138.25

348.95

345.64

351.39

Tata Motors

99.28

412.15

410.40

415.10

State Bank of India

98.94

573.50

568.79

577.84

 

  • Tata Steel has acquired 1,56,12,802 equity shares of Rs 10 each at an issue price of Rs 12.81 per share of Tata Steel Advanced Materials, for an amount aggregating to around Rs 20 crore. 
  • L&T's Power Transmission & Distribution business has secured multiple EPC orders in the current quarter to build Transmission Lines and Substations in the Kingdom of Saudi Arabia. 
  • Hero MotoCorp has registered a healthy double-digit retail growth of 20% over the corresponding festive period of FY22. 
  • Hindustan Unilever's Pureit has launched its new range - Pureit Vital Series, a new range of RO + UV + Minerals based water purifiers with FiltraPower Technology.
News Analysis