Snapping a 7-day losing streak,
Indian equity benchmarks ended with strong gains on Friday, as investors
cheered the RBI MPC announcement of the repo rate hike. Key gauges opened with
minor cuts as traders were concerned as the RBI said India's current account
deficit (CAD) in April-June was at $23.9 billion, or 2.8 per cent of gross
domestic product (GDP), much higher than the $13.4 billion, or 1.5 per cent of
GDP, in January-March 2022. Besides, foreign institutional investors sold a net
Rs 35.99 billion ($441.7 million) worth of equities on Thursday, as per
provisional data available with the National Stock Exchange. However, key
indices turned green and witnessed strong momentum in morning deals, after the
Reserve Bank of India (RBI)'s Monetary Policy Committee (MPC) announced a 50
basis points (bps) hike in the repo rate to 5.90 per cent on Friday in order to
bring elevated inflation back to its target. Sentiments remained up-beat with
S&P Global Ratings' statement that rising rates and increased European
energy insecurity are hitting growth in almost every country, but India with an
estimated 7.3 per cent growth this fiscal, would be the star among emerging
market economies. Traders also found support with Union Minister Piyush Goyal's
statement that India will be the pillar of the global economic revival as it
exhibited steady growth and emerged as the fastest-growing country among large
economies of the world. Some optimism also came as Economic Affairs Secretary
Ajay Seth said India's economic recovery remains on course, supported by key
structural reforms, despite exogenous shocks and challenges. Adding to the
optimism, India climbed six notches to 40th position in the Global Innovation
Index 2022 on account of improvement in several parameters. According to a
report by the Geneva-based World Intellectual Property Organization (WIPO),
Switzerland, the United States, Sweden, the United Kingdom and the Netherlands
are the world's most-innovative economies. Traders also took a note of report
that the Centre has reduced its borrowing target for the financial year 2022-23
(FY23) by Rs 10,000 crore to Rs 14.21 trillion amid robust tax collections.
Finally, the BSE Sensex rose 1016.96 points or 1.80% to 57,426.92 and the CNX
Nifty was up by 276.25 points or 1.64% to 17,094.35.
The US markets closed
significantly lower on Friday on lingering concerns about the global economic
outlook amid aggressive interest rate hikes by central banks around the world.
A steep drop by shares of Nike (NKE) weighed on the Dow, with the athletic
footwear and apparel giant plunging by 12.8 percent. Nike fell sharply after
reporting better than expected fiscal first quarter earnings and revenues but
warning it will need to cut prices amid a surge in inventories. Adding more
pessimism, a reading on inflation said to be preferred by the Federal Reserve
showed an acceleration in the pace of core consumer price growth in the month
of August. The Commerce Department report showed the annual rate of core
consumer price growth accelerated to 4.9 percent in August from a revised 4.7
percent in July. Street had expected the annual rate of growth in core consumer
prices, which exclude food and energy prices, to tick up to 4.7 percent from
the 4.6 percent originally reported for the previous month. A separate report
released by the University of Michigan showed one-year inflation expectations
edged down to 4.7 percent in September from 4.8 percent in August, hitting the
lowest level since last September. Five-year inflation expectations also dipped
to 2.7 percent in September from 2.9 percent in August, falling below the
2.9-3.1 percent range for the first time since July 2021. MNI Indicators also
released a report showing an unexpected contraction in Chicago-area business
activity in the month of September. Meanwhile, investors remained on sidelines
ahead to the Labor Department's monthly jobs report to be out next week.
Crude oil futures wiped out early
gains and ended sharply lower on Friday amid worries about demand outlook with
aggressive monetary tightening by central banks raising the risk of a
recession. Initially, oil prices traded higher amid speculation OPEC producers
will announce an output cut after their meeting on October 5. The Organization
of the Petroleum Exporting Countries and allies, a group known as OPEC+, is
scheduled to meet next week. It is expected that the group will agree to cut
crude output in order to support falling prices. Benchmark crude oil futures
for November delivery fell $1.74 or 2.1 percent at $79.49 a barrel on the New
York Mercantile Exchange. Brent crude for December delivery dropped $2.04 or
about 2.3 percent to settle at $85.14 a barrel on London's Intercontinental
Exchange.
Indian rupee ended significantly
higher against dollar on Friday as RBI raised repo rate to rein in inflation.
Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has raised repo
rate by 50 basis points (bps) to 5.90 percent in a bid to check inflation, which
has remained above its tolerance level for the past 8 months. Sentiments were
also upbeat with Union Minister Piyush Goyal's statement that India will be the
pillar of the global economic revival as it exhibited steady growth and emerged
as the fastest-growing country among large economies of the world. On the
global front, sterling rose on Friday moving close to levels last seen before
the new government's so-called mini budget a week ago sent the currency to a
record low against the U.S. dollar. Finally, the rupee ended at 81.49
(Provisional), stronger by 24 paisa from its previous close of 81.73 on
Thursday.
The FIIs as per Friday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 8820.33 crore against gross selling of Rs 12693.81 crore,
while in the debt segment, the gross purchase was of Rs 155.56 crore against
gross selling of Rs 953.40 crore. Besides, in the hybrid segment, the gross
buying was of Rs 33.59 crore against gross selling of Rs 36.33 crore.
The US markets ended lower on
Friday with historically hot inflation, rising interest rates and recession
fears. Asian markets are trading mostly in red on Monday tracking sell-off on
Wall Street. Indian markets halted the 7-day losing streak and ended higher on
Friday after RBI hiked key policy rates on expected lines. Today, start of
holiday shortened week is likely to be negative amid weak global cues and mixed
economic data on domestic front. Markets will remain close on Wednesday on
account of Dussehra. Traders will be concerned as the government data showed
that the output of eight core infrastructure sectors grew 3.3 per cent in
August -- the lowest in nine months -- as against 12.2 per cent in the year-ago
period. The latest data on public debt showed that the total liabilities of the
government increased to Rs 145.72 lakh crore at the end-June 2022 from Rs
139.58 lakh crore at end-March 2022. More pessimism may come as foreign
investors turned sellers again in September and pulled out over Rs 7,600 crore
from the Indian equity markets amid hawkish stance by the US Fed and sharp
depreciation in rupee. Besides, the data released by the Controller General of
Accounts (CGA) showed that the central government's fiscal deficit touched 32.6
per cent of the annual target in the current financial year till August as
against 31.1 per cent recorded a year ago. However, some respite may come later
in the day as Finance minister Nirmala Sitharaman said inflation is at a
manageable level. She added that we are in an era of robust economic
activities. Traders may be taking encouragement as the finance ministry said
GST collections remained above Rs 1.40 lakh crore for the seventh month in a
row at Rs 1.47 lakh crore in September, a 26 per cent increase over last year,
reflecting buoyancy in tax collection and stability of the GST portal. Some
optimism may come as data released by the Centre for Monitoring Indian Economy
(CMIE) said India's unemployment rate dropped drastically to 6.43 per cent in
September on the back of increase in labour participation in the rural and urban
areas. Meanwhile, Union Transport Minister Nitin Gadkari said India is the
fastest growing economy. He added that India can become a super economic power
given its economic potential. There will be some buzz in Telecom industry
stocks as after Prime Minister Narendra Modi launched the 5G services in India.
Aviation industry stocks will be in limelight as the rates of aviation turbine
fuel (ATF) were cut marginally by 4.5 per cent. Jet fuel price was cut by Rs
5,521.17, or 4.5 per cent, to Rs 115,520.27 pr kl in the national capital.
There will be some reaction in oil & gas sector stocks as prices of natural
gas, which is used to generate electricity, make fertiliser and is converted
into CNG to run automobiles, were hiked by a steep 40% to record levels, in
step with global firming up of energy rates. Auto industry stocks will be in
focus as Federation of Automotive Dealers Associations said the hike in key
interest rate by RBI is a big dampener for the automobile industry particularly
for the price sensitive entry-level two-wheelers and passenger vehicles
segments. Also, auto stocks will be reacting to their monthly sales numbers.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,094.35
|
16,832.34
|
17,271.74
|
BSE
Sensex
|
57,426.92
|
56,475.23
|
58,050.63
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
664.36
|
99.30
|
96.54
|
101.24
|
Power Grid Corporation
|
471.73
|
212.20
|
206.56
|
218.26
|
Oil & Natural Gas Corporation
|
335.30
|
126.80
|
124.06
|
130.96
|
Tata Motors
|
209.51
|
404.60
|
395.31
|
411.06
|
Hindalco Industries
|
177.06
|
390.55
|
378.69
|
398.89
|
Adani Ports and Special Economic Zone has incorporated a Wholly Owned Subsidiary namely, Adani Aviation Fuels, on September 29, 2022.
Hero MotoCorp is finalizing a collaboration agreement with Zero Motorcycles, the California (USA)-based manufacturer of premium electric motorcycles and powertrains.
Reliance Industries' subsidiary -- Jio Platforms has signed an agreement with the ICAI to upskill users of the telecom service provider through audio-video content developed by ICAI.
Adani Enterprises' wholly owned subsidiaries -- BHRPL, HURPL and UPRPL have achieved financial closure for the access-controlled six lane (expandable to eight lane) greenfield Ganga Expressway Project (Group-II, III & IV) in Uttar Pradesh respectively on DBFOT (Toll) basis under PPP mode.