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NSE Intra-day chart (16 August 2022)
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Market Commentary 17 August 2022
Benchmarks likely to open in green on Wednesday

 

Indian equity benchmarks continued winning run for the third straight session and settled with gains of over half percent each on Tuesday, led by gains in Auto, Realty and Oil & Gas stocks amid positive global cues. The benchmarks witnessed a gap up opening and continued to hover in the positive range throughout the session, as sentiments got boost on private report stating that during the April-July period, the central government achieved more than a third of the direct tax collection for this financial year as personal tax collection exceeded corporation tax mop-up amid tightened enforcement and compliance measures. Overall direct tax collections, net of refunds, including corporation and personal income tax, grew by 40 per cent in the first four months of FY23 to Rs 5 trillion, which is nearly 35 per cent of the target of Rs 14.2 trillion for the whole fiscal year. Sentiments remained positive as the Income Tax Department said tax collected on income of companies surged by 34 per cent in the first four months of the current fiscal that began in April, indicating that a simplified tax regime with low rates is yielding results. Sentiments remained upbeat in late afternoon deals as India's inflation based on wholesale price index (WPI) eased to 13.93% in the month of July 2022 as against 15.18% in June, as prices of food articles, nonfood articles and crude petroleum & natural gas declined. Sector wise, Oil & Gas industry remain in focused, as diesel demand in India fell for the second month in a row as the onset of monsoon chipped away consumption in key sectors like agriculture. Some support also came as the commerce ministry is proposing a host of direct and indirect incentives such as deferral of import duties and exemption from export taxes to revamp Special Economic Zones through a new legislation. Traders also took a note of Former RBI Governor D Subbarao's statement that India may become a $5 trillion economy by 2028-29 only if the GDP grows at nine per cent per annum consistently for the next five years. He said there are eight key challenges for India to overcome to achieve the dream of $5 trillion economy. Finally, the BSE Sensex rose 379.43 points or 0.64% to 59,842.21 and the CNX Nifty was up by 127.10 points or 0.72% to 17,825.25.

 

The US markets ended mostly higher on Tuesday. The Dow Jones Industrial Average rallied, rising for a fifth day as earnings results from Walmart and Home Depot showed consumer spending could remain strong enough to keep the economy from tipping over into a downturn. Sentiments got boost as report from the Federal Reserve showed US industrial production increased by more than expected in the month of July. The Fed said industrial production climbed by 0.6 percent in July following a revised unchanged reading in June. Street had expected industrial production to rise by 0.3 percent compared to the 0.2 percent dip originally reported for the previous month. Meanwhile, traders largely shrugged off a Commerce Department report showing new residential construction tumbled by much more than expected in the month of July. The report showed housing starts plunged by 9.6 percent to an annual rate of 1.446 million in July after slumping by 2.4 percent to a rate of 1.559 million in June. Street had expected housing starts to decline by 1.2 percent to a rate of 1.540 million. With the much steeper than expected drop, housing starts dove to their lowest annual rate since hitting 1.430 million in February of 2021. Building permits, an indicator of future housing demand, also fell by 1.3 percent to an annual rate of 1.674 million after inching up by 0.1 percent to a revised rate of 1.696 million in June. On the sectoral front, retail stocks turned in a strong performance following the upward earnings news from Walmart and Home Depot, with the Dow Jones US Retail Index surging by 2 percent to its best closing level in well over three months.  

 

Crude oil futures ended deeply in red on Tuesday, magnifying their previous sessions' losses, on worries about outlook for energy demand and on a potential increase in OPEC supply. The world's biggest crude producer Saudi Aramco has also indicated a potential increase in output. Saudi Aramco said that it plans to raise crude oil output to its maximum capacity of 12.3 million barrels per day by 2025 if requested by the Saudi Arabian government to meet the needs of global consumers. Further, disappointing economic data from the US and China on Monday raised worries about oil demand. Benchmark crude oil futures for September delivery fell $2.88 or about 3.2 percent to settle at $86.53 a barrel on the New York Mercantile Exchange. Brent crude for October delivery dropped $2.76 or 2.9 percent to settle at $92.34 a barrel on London's Intercontinental Exchange. 

 

Indian forex and money market remained shut on Tuesday on account of Parsi New Year.

 

The FIIs as per Friday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 9023.30 crore against gross selling of Rs 6774.45 crore, while in the debt segment, the gross purchase was of Rs 816.89 crore against gross selling of Rs 659.08 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.28 crore against gross selling of Rs 8.54 crore.

 

The US markets ended mostly higher on Tuesday as Walmart and Home Depot posted better-than-expected financial results and a slew of economic data painted a mixed picture of the economy. Asian markets are trading mostly in green on Wednesday as investors await the release of the minutes of the U.S. Federal Reserve's July 26-27 policy meeting later in the day. Indian markets settled near four-month highs on Tuesday as fag-end buying in Reliance Industries' stock pushed indices off lows. Also, upbeat global mood, and steady decline in inflation (CPI and WPI), kept the bulls charged on Dalal Street. Today, domestic markets are likely to open in green with signs of inflation coming down, and global oil prices on a weak footing. Some support will come as State Bank of India's (SBI) Chairman Dinesh Khara said that things might get better on the inflation front towards the end of September. He said the supply side constraints getting addressed and crude oil prices trending low will help ease the situation. Traders may take note of a private report that the UK India Business Council sees opportunities for trade, investment, and collaboration with India across financial technology (fintech), food and beverage, electric vehicle (EV), and other sectors. Meanwhile, a private report stated that the Goods and Services Tax (GST) Council may make rate changes in some services or products and withdraw some exemptions in a bid to correct instances of inverted duty. PNG, CNG supplier companies stocks will be in focus after state-run gas utility Mahanagar Gas reduced prices for compressed natural gas (CNG) by six rupees per kg and domestic piped natural gas (PNG) by four rupees per standard cubic meter in and around Mumbai, effective August 17. There will be some reaction in power and coal industry stocks as Union coal secretary Anil Kumar Jain said that thermal power stations have coal stocks that will last for the next 17 days and Mahagenco has stocks for eight to 10 days. Dairy products stocks will be in limelight as Amul and Mother Dairy has announced a price hike of Rs 2 per litre from August 18 on account of rising input costs. This is the second hike in six months by both the brands.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,825.25

17,779.84

17,854.89

BSE Sensex

59,842.21

59,703.11

59,952.18

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

692.07

113.00

111.50

114.10

Oil & Natural Gas Corporation

312.30

139.95

136.74

142.54

Tata Motors

167.96

489.85

481.56

494.76

ICICI Bank

138.04

879.25

875.60

883.70

Hindalco Industries

111.54

428.90

422.59

434.99

 

  • Bharat Petroleum Corporation is planning to invest Rs 1.4 lakh crore in petrochemicals, city gas and clean energy in the next five years as it looks to non-fuel businesses for growth. 
  • NTPC has started Commercial Operation of third part capacity of 21 MW out of 56 MW Kawas Solar PV Project at Kawas, Gujarat, with effect from August 15, 2022.
  • Axis Bank has signed a MoU with Food Corporation of India to provide Ultima Salary package, a best-in-class salary account with exclusive benefits & features to all its employees.
  • Hero MotoCorp has reported over 2-fold jump in its consolidated net profit at Rs 585.58 crore for Q1FY23 as compared to Rs 256.46 crore for the same quarter in the previous year.
News Analysis