Indian equity
benchmarks snapped their three-day record-breaking streak and ended in the
negative territory on Wednesday as investors booked profit at record highs
ahead of weekly expiry of index futures and option contracts. The benchmark
Indices opened in green due to favourable GDP data. India's economy grew at a
record 20.1 per cent year-on-year in April-June quarter, helped by a low base
of the year-ago period coupled with improved manufacturing in spite of a
devastating second wave of Covid-19 cases. Sentiments also remained positive as
the government data stated that high tax collections due to tighter rules for
the goods and services tax (GST), and an economy on the recovery path coupled
with expenditure compression resulted in the Centre's fiscal deficit narrowing
to 21.3 per cent of the Budget Estimates (BE) in the first four months of the
current financial year. Adding more optimism, Moody's Investors Service said
the economic activity in India is picking up with the gradual easing of COVID
restrictions and there could be further upside to growth as economies around
the world gradually reopen. However, domestic indices failed to hold onto its
early gains and turned negative in late morning session, as traders got
worried, after India's manufacturing sector activities moderated in August, as
business orders and production rose at softer rates due to the pandemic and
rising input costs. The seasonally adjusted IHS Markit India Manufacturing
Purchasing Managers' Index (PMI) stood at 52.3 in August, down from 55.3 in
July, indicating a softer rate of growth that was subdued and below its
long-run average. Traders also remain concerned after private report stated
that Asia's factory activity lost momentum in August as a resurgence in
coronavirus cases disrupted supply chains across the region, raising concerns
faltering manufacturing will add to economic woes caused by slumping
consumption. Growth in India's factory sector activity also slowed as
persistent pandemic-related weakness weighed on demand and output, forcing
firms to cut jobs again following a brief recovery in July. Finally, the BSE
Sensex fell 214.18 points or 0.37% to 57,338.21, while the CNX Nifty was down
by 55.95 points or 0.33% to 17,076.25.
The US markets ended mostly
higher on Wednesday with Nasdaq settling the session at a new record closing
high. Sentiments got boost after a separate report from the Institute for
Supply Management (ISM) showed manufacturing activity in the US unexpectedly
grew at a slightly faster rate in the month of August. The ISM said its
manufacturing PMI inched up to 59.9 in August from 59.5 in July, with a reading
above 50 indicating growth in the sector. The uptick surprised participants,
who had expected the index to dip to 58.6. The unexpected increase by the
headline index came as the new orders index climbed to 66.7 in August from 64.9
in July and the production index rose to 60.0 from 58.4 in the previous month.
Meanwhile, the report showed the employment index slid to 49.0 in August from
52.9 in July, indicating a modest contraction in employment in the
manufacturing sector. Besides, construction spending in the US increased by
slightly more than expected in the month of July, according to a report
released by the Commerce Department. The report said construction spending rose
by 0.3 percent to an annual rate of $1.569 trillion in July after edging down
by less than a tenth of a percent to revised rate of $1.563 trillion in June.
Street had expected construction spending to inch up by 0.2 percent compared to
the 0.1 percent uptick originally reported for the previous month. Meanwhile,
private sector employment in the U.S. increased by much less than expected in
the month of August, according to a report released by payroll processor ADP.
ADP said private sector employment climbed by 374,000 jobs in August after
rising by a downwardly revised 326,000 jobs in July. Street had expected
employment to jump by 613,000 jobs compared to the addition of 330,000 jobs
originally reported for the previous month.
Crude oil futures ended
marginally higher on Wednesday after data showed a drop in U.S. crude
inventories in the week ended August 28. Data released by Energy Information
Administration (EIA) showed U.S. oil stockpiles dropped by 7.169 million
barrels last week, more than twice the expected drop of about 3.1 million
barrels. A report from the American Petroleum Institute on Tuesday showed crude
inventories dropped by 4.045 million barrels last week, as against expectations
for a 2.833 million decline. Traders also noted that the Organization of the
Petroleum Exporting Countries (OPEC) and its allies, collectively known as
OPEC+, decided in a meeting today to stick to their earlier plan of boosting
oil production by 400,000 barrels per day each month through December. Crude
oil futures for October gained $0.09 or about 0.1 percent to settle $68.59
barrel on the New York Mercantile Exchange. However, November Brent crude fell
$0.16 or about 0.22% percent to settle at $71.47 a barrel on London's
Intercontinental Exchange.
Erasing previous session gains,
Indian Rupee ended weaker against dollar on Wednesday, on account of sustained
dollar demand from importers and banks. Sentiments got hit as India's
manufacturing sector activities moderated in August, as business orders and
production rose at softer rates due to the pandemic and rising input costs. The
seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI)
stood at 52.3 in August, down from 55.3 in July, indicating a softer rate of
growth that was subdued and below its long-run average. However, downfall
remained capped as India's economy grew by 20.1 per cent in the first quarter
of 2021-22, helped by a low base of the year-ago period. On the global front;
sterling steadied on Wednesday close to two-week highs versus the dollar, with
the pound taking its cue from other currencies given this week is light on data
and Bank of England speakers. Finally, the rupee ended 73.08, weaker by 8 paise
from its previous close of 73.00 on Tuesday.
The FIIs as per Wednesday's data
were net buyer in both equity and debt segment. In equity segment, the gross
buying was of Rs 21856.58 crore against gross selling of Rs 19043.57 crore,
while in the debt segment, the gross purchase was of Rs 3093.75 crore against
gross selling of Rs 1484.45 crore. Besides, in the hybrid segment, the gross
buying was of Rs 8.32 crore against gross selling of Rs 12.13 crore.
The US markets ended mostly
higher on Wednesday as investors looked beyond weak economic data that weighed
on the dollar to focus on the likely continuation of massive central bank
stimulus measures. Asian markets are trading mixed on Thursday after Australia
reported a higher-than-expected trade surplus in July. Indian markets once
again soared higher on Wednesday to hit fresh all-time highs but failed to hold
the gains and finished the day down in the red amid mixed global cues. Today,
the start of session is likely to be cautious tracking mixed global cues. Also,
adjustment to 100 per cent peak margin norms may add volatility. Some support
will come as Goods and services tax (GST) collection moderated in August to Rs
1.12 trillion as against Rs 1.16 trillion in July, but exceeded the Rs
1-trillion mark for the second month as economic activity gained pace with a
decline in Covid-19 cases. Traders may take note of report that the country
received 24 per cent less than normal rainfall in August, a vast deviation from
the IMD's predictions for the month, but latest forecasts say it is expected to
be above normal in September. Meanwhile, the International Monetary Fund (IMF)
has sharply increased its allocation of Special Drawing Rights (SDR) to India,
in line with the country's existing quota in the fund. There will be some buzz
in the metal stocks with a private report that Indian steel prices are at an
all-time high of Rs 67,500/tonne, which is 5 per cent above their June quarter
average. Spot aluminum price at $2,674/tonne is also 12 per cent higher than
the June quarter average. Power stocks will be in focus as power ministry data
showed that India's power consumption grew 18.6 per cent in August to 129.51
billion units (BU) and remained higher than the pre-COVID level due to improved
economic activities amid easing of lockdown curbs by states. There will be some
reaction in OMCs stocks as India's fuel demand recovery remained patchy in
August as petrol consumption continued to rise but diesel sales fell,
preliminary data from state fuel retailers showed.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,076.25
|
17,012.29
|
17,182.99
|
BSE
Sensex
|
57,338.21
|
57,095.17
|
57,749.98
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
331.03
|
295.25
|
289.24
|
299.34
|
Bharti Airtel
|
302.28
|
666.40
|
655.84
|
675.14
|
Axis Bank
|
199.72
|
798.90
|
789.86
|
813.46
|
State Bank of India
|
187.76
|
429.90
|
425.85
|
433.25
|
ITC
|
162.41
|
209.50
|
208.44
|
211.44
|
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