Indian equity benchmarks staged
splendid performance on Tuesday with frontline gauges surpassing their crucial
58,000 (Sensex) and 17,250 (Nifty) levels on sustained buying by fund and
retail investors. Key gauges made gap-up opening and showed strength throughout
the day amid positive trends in global equity markets. Traders took encouragement
with Crisil Ratings said that India Inc's credit quality showed further
improvement in April-September period with the ratio of upgrades to downgrades
inching higher. Crisil Ratings, which rates 6,800 companies, added that the
credit ratio's improvement to 5.52 times in H1FY23 as compared to 5.04 times in
H2FY22 was driven by leaner balance sheets led by healthy cash flows and muted
investments. Some solace also came with
Icra Ratings' statement that credit quality of corporates has strengthened
further in the first half of the current fiscal with rating upgrades being more
than three times that of downgrades, carrying on with the momentum since early
FY22. Domestic sentiments remained up-beat in late afternoon deals, as foreign
investors turned net buyers after a gap of eight days of being net sellers. The
foreign portfolio investors bought equities worth 590.58, according to National
Stock Exchange data. Market participants paid no heed towards the United
Nations Conference on Trade and Development's (UNCTAD) statement that India's
economic growth is expected to decline to 5.7 per cent this year from 8.2 per
cent in 2021, citing higher financing cost and weaker public expenditures.
Traders also overlooked the commerce ministry in its preliminary data has
showed that India's merchandise exports contracted by 3.52 per cent to $32.62
billion in September 2022 as against $33.81 billion in the same month last
year, while the trade deficit widened to $26.72 billion. Finally, the BSE
Sensex rose 1276.66 points or 2.25% to 58,065.47 and the CNX Nifty was up by
386.95 points or 2.29% to 17,274.30.
The US markets ended lower on
Wednesday as traders looked to cash in on the strong gains posted early in the
week amid lingering concerns about the outlook for the global economy. Central
banks around the world appear poised to continue raising interest in the months
ahead, potentially tipping the global economy into a recession as they seek to
combat elevated inflation. A rebound by treasury yields also weighed on the
markets, with the yield on the benchmark ten-year note regaining ground after
moving notably lower over the two previous sessions. On the sectoral front,
Telecom stocks showed a significant move to the downside on the day, dragging the
NYSE Arca North American Telecom Index down by 2.8 percent. Interest
rate-sensitive utilities and commercial real estate stocks also saw
considerable weakness, with the Dow Jones Utility Average and the Dow Jones
U.S. Real Estate Index tumbling by 2.6 percent and 1.9 percent, respectively. On
the economic data front, the Institute for Supply Management released a report
showing a modest slowdown in the pace of growth in US service sector activity
in the month of September. The ISM said its services PMI edged down to 56.7 in
September from 56.9 in August, although a reading above 50 still indicates
growth in the sector. Street had expected the index to dip to 56.0. Meanwhile,
with the value of imports showing a notable decrease, the Commerce Department released
a report showing the U.S. trade deficit narrowed by more than expected in the
month of August. The Commerce Department said the trade deficit narrowed to
$67.4 billion in August from a revised $70.5 billion in July. Street had
expected the deficit to shrink to $68.0 billion from the $70.6 billion
originally reported for the previous month. The narrower than expected trade
deficit in August represents the smallest trade deficit since hitting $66.6
billion in May 2021.
Crude oil futures ended higher on
Wednesday after the Organization of the Petroleum Exporting Countries and its
allies, together known as OPEC+, agreed to impose deep output cuts. OPEC+
decided to reduce production by 2 million barrels per day from November.
Further, data showing a drop in US crude inventories in the week ended
September 30 contributed as well to the surge in oil prices. Data from US
Energy Information Administration (EIA) showed crude oil inventories in the US
dropped by 1.356 million barrels last week, as against expectations for an
increase of 2.052 million barrels. Benchmark crude oil futures for November
delivery rose $1.24 or 1.4 percent at $87.76 a barrel on the New York
Mercantile Exchange. Brent crude for December delivery surged $1.61 or about
1.74 percent to settle at $93.41 (Provisional) a barrel on London's
Intercontinental Exchange.
Reversing previous session
drubbing, Indian rupee appreciated significantly against dollar on Tuesday amid
heavy buying in domestic equities and weakness in the greenback. Traders were
energized as foreign investors turned net buyers after a gap of eight days of
being net sellers. The foreign portfolio investors bought equities worth
590.58, according to National Stock Exchange data. Sentiments were also upbeat
with Icra Ratings' statement that credit quality of corporates has strengthened
further in the first half of the current fiscal with rating upgrades being more
than three times that of downgrades, carrying on with the momentum since early
FY22. On the global front, dollar slid on Tuesday as U.S. treasury yields
paused in a relentless climb higher, providing brief relief to share markets
and helping the euro and sterling move further off multi-year lows. Finally,
the rupee ended at 81.62 (Provisional), stronger by 20 paisa from its previous
close of 81.82 on Monday.
The FIIs as per Tuesday's data
were net buyers in equity segment, while net sellers in debt segment. In equity
segment, the gross buying was of Rs 19922.80 crore against gross selling of Rs
18645.20 crore, while in the debt segment, the gross purchase was of Rs 193.40
crore against gross selling of Rs 197.61 crore. Besides, in the hybrid segment,
the gross buying was of Rs 20.41 crore against gross selling of Rs 37.11 crore.
The US markets ended lower on
Wednesday unable to sustain a late-day surge, after data showing strong U.S.
labor demand again suggested the Federal Reserve will keep interest rates
higher for longer. Asian markets are trading mostly in green on Thursday
despite the broadly negative cues from global markets overnight. Indian markets
surged more than two percent in a broad rally on Tuesday, amid a rebound across
global markets. Trading remained closed on Wednesday on account of Dusshera.
Today, markets are likely to open in green tracking gains in Asian peers. The
Street will monitor the services PMI data for September, while the weekly
F&O expiry may also sway investor sentiment. Some support will come as the
IMF said recent tightening actions by many central banks around the world will
help to prevent high inflation from becoming entrenched. Also, foreign
institutional investors (FIIs) remained net buyers to the tune of Rs 1,344.63
crore on October 4, as per provisional data available on the NSE. Traders may
take note of report that Commerce and Industry Minister Piyush Goyal will meet
different export promotion councils on October 7 to discuss ways to promote the
growth rate in the country's outbound shipments. The meeting assumes
significance as India's exports contracted by 3.52 per cent to $32.62 billion
in September against $33.81 billion in the same month last year, while the
trade deficit widened to $26.72 billion during the last month. However, there
may be some cautiousness as the World Trade Organization (WTO) slashed its
global trade growth forecast for 2023, stating that elevated commodity prices
and rising interest rates would curb import demand, and warned of a likely
contraction if the conflict in Ukraine escalates. Meanwhile, according to the
RBI data, India Inc's foreign commercial borrowings in August this year rose by
nearly 4.6 per cent to $2.98 billion. Sugar industry stocks will be in focus as
the government said India's sugar exports rose 57 per cent to 109.8 lakh tonnes
during 2021-22 marketing year ended September, resulting in foreign currency
inflow worth about Rs 40,000 crore into the country. Besides, India has emerged
as the world's largest producer and consumer of sugar and its second largest exporter.
There will be some reaction in aviation industry stocks as recognising that an
efficient and strong civil aviation sector is vital for the economic
development of the country, the Department of Financial Services (DFS) has
modified the Emergency Credit Line Guarantee Scheme (ECLGS) to enhance the
maximum loan amount eligibility for airlines. The oil producers and marketing
companies stocks will be in limelight as crude oil prices jumped over 3 per
cent overnight after OPEC+ agreed to its deepest cuts (2 million barrel per
day) to production since the 2020 COVID pandemic.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,274.30
|
17,165.30
|
17,335.30
|
BSE
Sensex
|
58,065.47
|
57,681.44
|
58,274.73
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
401.86
|
101.40
|
100.44
|
101.94
|
Power Grid Corporation of India
|
143.84
|
208.80
|
207.09
|
211.44
|
Oil & Natural Gas Corporation
|
141.37
|
134.00
|
132.20
|
135.40
|
Tata Motors
|
127.61
|
407.90
|
404.21
|
410.26
|
Coal India
|
108.62
|
223.70
|
219.86
|
225.76
|
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