Daily Newsletter
NSE Intra-day chart (06 May 2024)
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 07 May 2024
Benchmarks to get flat-to-positive start following gains in global indices

Indian equity benchmarks failed to hold on to their initial gains to end flat on Monday as traders turned worried amid growing uncertainty over the delay in rate cuts and persisting higher inflation. Key gauges started the day on an optimistic note after data from National Securities Depository (NSDL) showed that foreign portfolio investors (FPIs) have again returned as net buyers in the Indian stock market in May. Till May 3, they bought equities worth Rs 1,156 crore in India. In April, FPIs turned net sellers in Indian stocks, as the ongoing geopolitical crisis in the Middle East then likely pushed investors to take money off their portfolios. Traders also took note of report that growth in India's dominant services industry softened in April but remained sturdy on robust domestic and foreign demand, lifting business confidence to a three-month high. The HSBC final India Services Purchasing Managers' Index, compiled by S&P Global, fell to 60.8 in April from 61.2 in March, confounding a preliminary estimate for a rise to 61.7. Despite the decline in the headline reading, the figure still marked one of the fastest growth rates in just under 14 years. However, markets witnessed gradual selloff which led markets to end flat as market participants started booking profits at higher levels. PSU banks underperformed due to the Reserve Bank of India's (RBI) tighter norms on lending to projects under development. The broader indices also witnessed major selling pressure due to valuation concerns and profit booking. Cautiousness also remained on Dalal Street as RBI said India's forex reserves dropped $2.412 billion to $637.922 billion as on April 26, in the third consecutive weekly decline in the reserves. Meanwhile, India has urged the Asian Development Bank (ADB) not to overlook its focus on reduction of remaining poverty while promoting sustainable growth for the member nations in the Asia Pacific region. Making intervention at the Board of Governors Business Session at the 57th Annual Meeting of ADB, India's Temporary Alternate Governor Vikas Sheel said the bank has played a critical role in facilitating measures of faster economic development, reducing poverty and promoting regional cooperation while effectively addressing the challenges and delivery of global public goods. Finally, the BSE Sensex rose 17.39 points or 0.02% to 73,895.54 and the CNX Nifty was down by 33.15 points or 0.15% points to 22,442.70.

The US markets ended higher on Monday, magnifying their previous session's gains. Relatively dovish comments from Federal Reserve Chair Jerome Powell combined with weaker-than-expected job growth in April have largely eliminated short-lived concerns the Fed might actually consider raising rates. Private report said investors have instead grown increasingly confident about a rate cut in the coming months, with the chances rates will be lower by September now at 83.5 percent. On the sectoral front, semiconductor stocks showed a substantial move to the upside over the course of the session, driving the Philadelphia Semiconductor Index up by 2.2 percent to its best closing level in almost a month. Considerable strength was also visible among gold stocks, as reflected by the 2.2 percent surge by the NYSE Arca Gold Bugs Index. The rally by gold stocks came amid an increase by the price of the precious metal, with gold for June delivery climbing $24.20 to $2,332.80 an ounce. Computer hardware stocks also saw significant strength on the day, resulting in a 2.2 percent jump by the NYSE Arca Computer Hardware Index. Software, brokerage and housing stocks also showed notable moves to the upside, moving higher along with most of the other major sectors. Among individual stocks, Media and entertainment giant Paramount Global (PARA) also surged after a private report said the company decided to formally open negotiations with a bidding group led by Sony Pictures Entertainment and the private equity giant Apollo. However, Spirit Airlines (SAVE) plummeted after the discount carrier reported a slightly wider than expected first quarter loss and provided disappointing second quarter revenue guidance.

Crude oil futures ended higher on Monday as Saudi Arabia's decision to hike its selling price for the European and Asian markets. Saudi Arabia decided to increase the official selling prices for its crude sold to Asia, Northwest Europe, and the Mediterranean in June, indicating anticipation of robust demand during the upcoming summer season. However, oil prices dropped somewhat sharply earlier in the session after Israel intensified attacks on Rafah, killing at least 22 Palestinians after Hamas fired rockets at the Karem Abu Salem crossing, killing three Israeli soldiers. Benchmark crude oil futures for June delivery rose $0.37 or about 0.47% to settle at $78.48 a barrel on the New York Mercantile Exchange. Brent crude for July delivery surged $0.37 or 0.45% to $83.33 per barrel on London's Intercontinental Exchange.

Indian rupee depreciated against the US dollar on Monday, weighed down by significant rise in crude oil prices as well as the US dollar demand from importers. Weakness in domestic equities also dented investor sentiments. Foreign fund outflows added pressure on the local unit. According to exchange data, foreign Institutional Investors (FIIs) were net sellers in the capital markets on Friday, as they offloaded shares worth Rs 2,391.98 crore. Traders took a note of reports that India's services sector activity growth eased during the month of April. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index fell to 60.8 in April from 61.2 in March. Meanwhile, the Reserve Bank of India (RBI) said India's forex reserves dropped $2.412 billion to $637.922 billion as on April 26, in the third consecutive weekly decline in the reserves. Finally, the rupee ended at 83.51 (Provisional), weaker by 6 paise from its previous close of 83.45 on Friday.

The FIIs as per Monday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 17677.66 crore against gross selling of Rs 19815.71 crore, while in the debt segment, the gross purchase was of Rs 3591.89 crore with gross sales of Rs 2772.64 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.61 crore against gross selling of Rs 26.57 crore.

The US markets ended higher on Monday driven by speculation of potential interest rate cuts by the Federal Reserve this year. Asian markets are trading mostly in green on Tuesday tracking overnight gains on Wall Street. Indian markets after making a positive start on healthy global cues, wipe out their gains and ended flat amid selling in financial shares. Today, markets are likely to get flat-to-positive start following gains in global indices. Sentiments will get boost as India Ratings and Research revised upward the country's GDP growth estimate for FY25 to 7.1 per cent from 6.5 per cent earlier. The projection is marginally higher than the Reserve Bank's estimate of 7 per cent. The rating agency said strong support from the sustained government capex, deleveraged balance sheets of corporate and banking sector, and the incipient private corporate capex cycle make it revise its estimate. Also, a private report said that India is on track to become the third largest consumer market in 2026, overtaking Germany and Japan, as people in the affluent category increase. However, foreign fund outflows likely to dent sentiments. Foreign Institutional Investors (FIIs) sold shares worth Rs 2,168.75 crore on May 6. Geopolitical tensions may also weigh on markets as Israel commenced its planned military offensive in Rafah hours after it rejected Hamas's proposal for a ceasefire in Gaza. There will be some buzz in sugar industry stocks as sugar industry body Isma has urged the government to allow 20 lakh tonnes of sugar exports in the current marketing year ending September as shipments of surplus sweetener would boost liquidity of millers enabling them to make cane payments to farmers on time. Construction equipment industry stocks will be in focus as the data released by the Indian Construction Equipment Manufacturers' Association (ICEMA) showed that India's construction equipment industry witnessed a 26 per cent rise in sales to 1,35,650 units in the 2023-24 fiscal on the back of the government's infrastructure-led growth agenda. The construction equipment (CE) industry had sold 1,07,779 units in the previous fiscal year. Railways stocks will be in limelight with a private report that Indian Railways in April rang up a tepid 1.45 per cent growth rate in its freight volumes, dragged down by weak numbers in coal transportation. It transported 128.29 million tonnes (mt) of goods, witnessing a fall of nearly 6 mt in its coal traffic.

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

Index

Previous close

Support

Resistance

NSE Nifty

22,442.70

22,371.84

22,551.19

BSE Sensex

73,895.54

73,667.99

74,241.39

Nifty Top volumes

Stock

 

Volume

Previous close (Rs)

Support (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

376.21

167.50

165.25

169.20

Coal India

364.08

460.05

442.25

479.65

SBIN

352.84

809.50

796.34

829.34

Kotak Mahindra Bank

216.08

1624.40

1601.26

1640.26

Power Grid

168.56

308.35

304.04

311.74

  • Tata Steel's subsidiary -- TSSEZL and HHP Five have inked a MoU to establish a green hydrogen and green ammonia project at TSSEZL's Gopalpur Industrial Park in Odisha's Ganjam district.
  • Adani Ports and Special Economic Zone is eyeing the Philippines' Bataan province to develop a port.
  • ICICI Bank has enabled NRI customers to use their international mobile number to make UPI payments instantly in India, thereby significantly enhancing their convenience of making everyday payments.
  • HCL Technologies has entered into a global strategic collaboration agreement with Amazon Web Services to accelerate GenAI-led enterprise digital transformation.

News Analysis