Indian equity benchmarks extended
their fall for the fourth straight session amid choppy trade on Wednesday, as
participants waited IIP (Index of Industrial Production) and CPI (Consumer
Price Inflation) data, due to be released tomorrow. The indices started higher but soon gave up
all of their respective gains, as traders turned worried as data released by
the RBI showed that India's outward foreign direct investment (OFDI) nearly
halved to $3.39 billion in April on an annual basis. The OFDI stood at $6.71
billion in April 2021. Some cautiousness came in with a private report that the
goods and services tax (GST) council is mulling a 28 per cent tax on crypto
currencies, at par with the current GST on casinos, betting and lottery.
Traders also took a note of ICRA Ratings' report that in spite of a sharp 40
per cent decline in bond issuances, states have been forced to pay more for
their market borrowings as the weighted average interest rate touched a record
7.69 per cent at the latest auctions of state government securities. Benchmarks
extended losses in afternoon deals, as sentiments were fragile as foreign
investors have sold Indian equities worth $1.82 billion so far this month,
shedding stocks worth $374 million in the fourth straight day of net selling on
May 10. Traders were also cautious after private report stated that a majority
of the Indian consumers are bullish about their financial situation in the next
one year, but have raised concerns over rising cost of goods and services, which
is affecting their purchasing decisions. Moreover, uncertainty around managing
rising living costs is driving over 80 per cent in India to save more money.
However, key gauges managed to pare some losses in final minutes of trade,
taking support from Union Minister Anupriya Patel stating that India was
expected to conclude free trade agreements with the United Kingdom, Canada, and
the European Union before this year-end. Finally, the BSE Sensex fell 276.46
points or 0.51% to 54,088.39 and the CNX Nifty was down by 72.95 points or
0.45% to 16,167.10.
The US markets ended deeply in
red on Wednesday as traders digested a highly anticipated Labor Department
report showing the annual rate of consumer price growth slowed by less than
expected. While the report showed the annual rate of consumer price growth
slowed to 8.3 percent in April from a 40-year high of 8.5 percent in March,
Street had expected the pace of growth to slow to 8.1 percent. The annual rate
of growth in core consumer prices also slowed to 6.2 percent in April from 6.5
percent in March, although the rate was expected to decelerate to 6.0 percent.
On a monthly basis, the Labor Department said its consumer price index rose by
0.3 percent in April after surging by 1.2 percent in March. Street had expected
prices to edge up by 0.2 percent. Core consumer prices, which exclude food and energy
prices, climbed by 0.6 percent in April after rising by 0.3 percent in March.
Core prices were expected to increase by 0.4 percent. The data added to recent
concerns the Federal Reserve will raise interest rates more aggressively in an
effort to bring inflation down at a faster rate. Traders have recently
expressed concerns more aggressive moves by the Fed and other central banks
could lead to a period of stagflation or an outright recession. On the sectoral
front, Computer hardware stocks moved sharply lower over the course of the
session, dragging the NYSE Arca Computer Hardware Index down by 3.8 percent to
its lowest closing level in well over a year. Substantial weakness also emerged
among housing stocks, as reflected by the 3.4 percent nosedive by the
Philadelphia Housing Sector Index. The index also ended the session at a more
than one-year closing low.
Crude oil futures ended higher on
Wednesday rebounding sharply from
recent losses, thanks to data showing a significant drop in flows of Russian
gas to Europe, and news about Chinese government's fresh stimulus measures.
Further, reports suggesting that Covid-19 infections dropped in Shanghai and
Beijing contributed as well to the rise in oil prices. Meanwhile, data from the
Energy Information Administration (EIA) showed US crude stockpiles rose by more
than 8 million barrels in the week ended May 6, due to another large release
from strategic reserves. Benchmark crude oil futures for June delivery surged
$5.95 or 6% percent to settle at $105.71 a barrel on the New York Mercantile
Exchange. Brent crude for July delivery rose $4.41 or 4.3 percent to settle at
$106.87 (Provisional) a barrel on London's Intercontinental Exchange.
Indian Rupee ended fairly higher
on Wednesday as the American currency retreated from its 20-year high levels.
Sentiments were upbeat with Union Minister Anupriya Patel's statement that
India was expected to conclude free trade agreements with the United Kingdom,
Canada, and the European Union before this year-end. Traders shrugged off data
released by the RBI showing that India's outward foreign direct investment
(OFDI) nearly halved to $3.39 billion in April on an annual basis. The OFDI
stood at $6.71 billion in April 2021. Also, market participants remained
cautious ahead of the inflation number that will be released on Thursday. On
the global front, dollar held close to a two-decade high on Wednesday as
investors waited for the latest U.S. inflation data to assess how aggressively
the Federal Reserve will have to tighten monetary policy to keep rising prices
in check. Finally, the rupee ended at 77.24 (Provisional), stronger by 10 paise
from its previous close of 77.34 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 6078.84 crore against gross selling of Rs 9554.91 crore, while
in the debt segment, the gross purchase was of Rs 131.91 crore against gross
selling of Rs 1688.74 crore. Besides, in the hybrid segment, the gross buying
was of Rs 4.68 crore against gross selling of Rs 11.18 crore.
The US markets ended lower on
Wednesday led by a sharp drop in the Nasdaq, after US inflation data did little
to ease investor worries over interest rates. Asian markets are trading mostly
in red on Thursday tracking overnight losses on Wall Street. Indian markets
failed to stay in the green and ended lower on Wednesday amid a rebound in oil
prices in international markets. Today, markets are likely to make negative
start mirroring weak global cues. Investors will closely track the Index of
Industrial Production (IIP) data for March and crucial retail inflation (CPI)
reading for April, which will be released later today. Traders will be
concerned with private report that tightening of policy rates by major central
banks, including the RBI, would adversely impact demand in the next 6-8 months
and slow down the recovery process. There will be some cautiousness with a
private report that India's central bank is likely to raise its inflation
projection for the current fiscal year at its June monetary policy meeting and
will consider more interest rate hikes. Some pessimism may come as a private
report lowered its forecasts for India's economic growth in the next two fiscal
years, saying a global slowdown, surging oil prices and weak domestic demand
would take a toll on Asia's third-largest economy. Besides, as per provisional
data available on the NSE, foreign institutional investors (FIIs) have net sold
shares worth Rs 3,609.35 crore. Traders may take note of a private report that
India Inc will hire 5 per cent more people in the April-June period compared to
the first quarter (Q1) this year, as Covid infections decrease amid reopening
of industries across the spectrum. Meanwhile, to strengthen the regulatory
framework for collective investment schemes, markets regulator SEBI has
enhanced the net worth criteria and track record requirements for entities
managing such schemes. Auto industry stocks will be in focus as industry body
SIAM said passenger vehicle dispatches from factories to dealers in the
domestic market declined by 4 per cent in April as supply side challenges
continued for the automotive industry. Total passenger vehicle domestic
wholesales stood at 251,581 units last month as compared to 261,633 units in
April 2021. There will be some reaction in tyre industry stocks with CRISIL's
report that the capital expenditure of tyre makers is expected to increase to
around Rs 5,000 crore this fiscal on the back of improving demand, as against
around Rs 3,700 crore annually in the preceding two fiscals. It added that the
demand is likely to be driven by segments such as replacement, commercial and
passenger vehicles (CVs and PVs), along with exports. There will be lots of
earnings reaction based on the performance of the companies.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
16,167.10
|
16,000.21
|
16,326.36
|
BSE
Sensex
|
54,088.39
|
53,538.95
|
54,618.20
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
292.15
|
390.30
|
379.56
|
399.01
|
Coal India
|
206.41
|
171.00
|
166.26
|
174.71
|
ITC
|
173.44
|
255.60
|
250.84
|
261.29
|
Oil & Natural Gas Corporation
|
150.84
|
159.25
|
155.34
|
161.59
|
State Bank of India
|
147.71
|
478.40
|
468.36
|
483.71
|
Tata Motors has expanded its electric vehicle range in the country with the launch of Nexon EV MAX, priced between Rs 17.74-19.24 lakh (ex-showroom).
State Bank of India's board has approved a proposal to raise $2 billion long-term fund in the current financial year.
ICICI Bank has signed a MoU with Santander UK Plc, a premier British bank, for collaboration towards the banking requirements of UK corporates operating in India.
L&T's SWC business and VMware Inc, have inked a strategic partnership to accelerate the adoption of digital infrastructure solutions across industries.