Indian equity benchmarks ended
Tuesday's session flat with negative bias after witnessed volatility. Key
gauges made positive start, as traders found some solace with Finance Minister
Nirmala Sitharaman's statement that while the necessary stimulus for growth
would continue, her ministry and the Reserve Bank of India (RBI) would work on
a pathway to maintain the growth momentum for the next 25 years in order to
make India an advanced economy. However, markets soon slipped in red in morning
deals, as traders turned cautious as Finance Ministry in its report on India's
external debt has said that India's external debt rose by 8.2 per cent
year-on-year to $620.7 billion as of March 2022. It stated while 53.2 per cent
of it was denominated in the US dollar, Indian rupee-denominated debt, estimated
at 31.2 per cent, was the second largest. Some concern also came as exchange
data showed foreign institutional investors (FIIs) offloaded shares worth Rs
811.75 crore on Monday. But, domestic markets recovered from their losses to
trade in green in afternoon deals, taking support from Reserve Bank Governor
Shaktikanta Das' statement that despite the latest headwinds arising from the
Jackson Hole summit leading to extreme volatility, the country's banking system
and financial markets are strong enough to withstand such pressures. Some
optimism also came after credit rating agency Moody's has allotted a Baa3
rating for the Government of India with a stable outlook. India's credit
profile reflects key strengths including its large and diversified economy with
high growth potential, a relatively strong external position, and a stable
domestic financing base for government debt. However, indices failed to hold
gains and settled almost unchanged in a volatile trading session, in absence of
any major trigger. Finally, the BSE Sensex fell 48.99 points or 0.08% to
59,196.99 and the CNX Nifty was down by 10.20 points or 0.06% to 17,655.60.
The US markets ended in red on
Tuesday as traders expressed some uncertainty about the near-term outlook for
the markets. Cautiousness on the day also came amid a surge in treasury yields,
with the yield on the benchmark ten-year note jumping to its highest levels in
almost three months. Further, potentially adding to the worries about interest
rates, the Institute for Supply Management (ISM) released a report showing
service sector activity in the US unexpectedly grew at a slightly faster rate
in the month of August. The ISM said its services PMI inched up to 56.9 in
August from 56.7 in July, with a reading above 50 indicating growth in the
sector. The uptick surprised Participants, who had expected the index to dip to
55.1. The report is a positive sign for the economy but may have led to
concerns the Federal Reserve will see the data as an indication that it can
continue to aggressively raise interest rates. Besides, comments from Fed
officials, including Chair Jerome Powell, are likely to attract attention in
the coming days along with the central bank's Beige Book. On the sectoral
front, Tobacco stocks showed a significant move to the downside on the day,
dragging the NYSE Arca Tobacco Index down by 2.4 percent to its lowest closing
level in well over a year. Considerable weakness also emerged among natural gas
stocks, as reflected by the 1.7 percent decrease by the NYSE Arca Natural Gas
Index. The weakness in the sector came amid a steep drop by the price of
natural gas. Networking stocks also saw notable weakness on the day, with the
NYSE Arca Networking Index falling by 1.6 percent to a one-month closing low.
Crude oil futures ended almost
flat with positive bias on Tuesday as the Organization of the Petroleum
Exporting Countries and its allies (OPEC+) announced that they will slash oil
production by 100,000 barrels per day (bpd) in October, roughly 0.1% of global
demand, reflecting expectations of slower global economic growth. OPEC+ leaders
confirmed they can meet at any time, before a next agreed gathering on October
5, 2022, if production needs to be altered again. However, worries about
outlook for energy demand amid rising fears of a recession, and the dollar's
uptick limited oil's rise. The dollar index climbed to a fresh 20-year high at
110.55 before paring some gains. Benchmark crude oil futures for October
delivery rose by about a penny or about 0.09 percent to settle at $86.88 a
barrel on the New York Mercantile Exchange. However, Brent crude for November
delivery fell $2.91 or about 3 percent to settle at $92.83 a barrel on London's
Intercontinental Exchange.
Indian Rupee ended almost flat
against US dollar on Tuesday amid a lacklustre trend in domestic equities.
Traders remained cautious as Finance Ministry in its report on India's
external debt has said that India's external debt rose by 8.2 per cent year-on-year
to $620.7 billion as of March 2022. It stated while 53.2 per cent of it was
denominated in the US dollar, Indian rupee-denominated debt, estimated at 31.2
per cent, was the second largest. However, some support came with Finance
Minister Nirmala Sitharaman's statement that while the necessary stimulus for
growth would continue, her ministry and the Reserve Bank of India (RBI) would
work on a pathway to maintain the growth momentum for the next 25 years in
order to make India an advanced economy. On the global front, the dollar took a
breather on Tuesday after a sweeping rally, easing slightly from milestone
highs on the euro, yen and sterling, but not too far as recession stalks
Europe, and US interest rates are poised for sharp rises. Finally, the rupee
ended at 79.77 (Provisional), stronger by 1 paisa from its previous close of
79.78 on Monday.
The FIIs as per Tuesday's data
were net buyers in both equity and debt segment. In equity segment, the gross
buying was of Rs 5838.26 crore against gross selling of Rs 5574.64 crore, while
in the debt segment, the gross purchase was of Rs 661.62 crore against gross
selling of Rs 538.90 crore. Besides, in the hybrid segment, the gross buying
was of Rs 3.67 crore against gross selling of Rs 20.35 crore.
The US markets ended lower on
Tuesday as traders assessed fresh economic data in volatile trading. Asian
markets are trading mostly in red on Wednesday as investors anticipate the
Federal Reserve to give its summary on current economic conditions, also known
as the Beige Book. Indian markets closed modestly lower on Tuesday after
investors offloaded FMCG, IT and banking stocks in the last hour of trade amid
mixed global cues. Today, the benchmark indices are likely to make negative start
following bearish cues from global markets. Traders will be concerned as
domestic ratings agency Icra said India's current account deficit (CAD) will
widen to 5 per cent of the GDP in the September quarter due to higher
merchandise trade deficit. The trade deficit has doubled to $28.7 billion for
August due to a 36.8 per cent expansion in imports and a 1.2 per cent decline
in export earnings. There will be some cautiousness with a private report
estimating that India's consumer price index (CPI) firmed to 6.9% year-on-year
in August, while core inflation likely stood at 6%. However, some support may
come later in the day as Moody's Investors Service said India's economic
recovery is unlikely to be derailed by rising challenges to the global economy,
higher inflation and tightening financial conditions, and affirmed a stable outlook for the
country's rating Baa3. Also, Moody's saw the Indian economy expanding by 7.6
per cent in the current fiscal compared to 8.7 per cent growth in the last
financial year that ended on March 31. For 2023-24, it estimates a 6.3 per cent
GDP growth. Traders may take note of report that the Union Finance Ministry
released the sixth monthly instalment of Post Devolution Revenue Deficit (PDRD)
grant of Rs 7,183.42 crore to 14 states. The grant has been released as per the
recommendations of the 15th Finance Commission. Meanwhile, foreign
institutional investors (FIIs) have net bought shares worth Rs 1,144.53 crore
on September 6, as per provisional data available on the NSE. Fertiliser sector
stocks will be in focus with a private report that government may look to
privatise PSUs in the sector. According to the PSE policy, 2021, the government
will look at leaving non-strategic sectors, such as fertiliser, steel and
tourism, by privatising or closing PSUs. There will be some reaction in power
companies stocks with report that the deadline to comply with sulphur dioxide
(SO2) emission norms for power companies has been extended by two more years,
as per a government notification issued on September 6. Renewable energy stocks
will be in limelight as Crisil Ratings said receivables of leading renewable
companies will shrink 20 per cent during this financial year. Leading renewable
energy (RE) companies are set to see their receivables reduce a fifth from 180
days a year ago to 140 days as of March 2023, a level last visible pre-COVID.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,655.60
|
17,573.95
|
17,750.95
|
BSE
Sensex
|
59,196.99
|
58,925.27
|
59,517.68
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
595.05
|
108.50
|
106.76
|
109.51
|
NTPC
|
278.66
|
168.50
|
165.91
|
169.96
|
ITC
|
119.70
|
326.90
|
325.54
|
329.14
|
Oil & Natural Gas Corporation
|
108.70
|
132.20
|
131.21
|
133.66
|
Power Grid Corporation of India
|
105.77
|
225.20
|
223.46
|
227.46
|
NTPC has acquired 600-MW Jhabua Power Plant for Rs 925 crore, which is its first such deal through insolvency proceedings.
HDFC and ERGO International AG's JV --HDFC ERGO General Insurance Company is partnering with Google Cloud to create a technology platform that will help digitize insurance purchasing and service in the country.
Reliance Industries has entered into definitive agreements with SenseHawk Inc. for acquiring 79.4% stake of SenseHawk, through primary infusion and secondary purchase, for a total consideration of $32 million.
RBI has selected HDFC Bank and Precision Biometric India for testing their 'on tap' retail payments applications under the regulatory sandbox scheme.