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NSE Intra-day chart (17 October 2022)
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Market Commentary 18 October 2022
Markets likely to get positive start on frim global cues

 

Indian equity benchmarks extended gains to second day and ended higher with gains of more than half percent on Monday on the back of buying in index majors SBI, NTPC and Bajaj Finserv and recovery in global markets. Markets started the week on a negative note, as the provisional data available on the NSE showed that foreign institutional investors (FIIs) have net sold shares worth Rs 1,011.23 crore on October 14, 2022. After the initial downtick, markets soon gradually inched higher, as traders took support with Finance Minister Nirmala Sitharaman's statement that the Indian economy will stay on course despite global headwinds and is projected to grow at seven per cent in fiscal 2022-23, and attributed this to the conducive domestic policy environment and focus on key structural reforms. She also reiterated that the inflation rate, which is hovering over 7 per cent in India, is at a manageable level compared to where some other countries are at present. Some support also came with a private report that India's focus on reforms and economic growth will result in foreign direct investment (FDI) of $475 billion in the next five years as most multinational companies (MNCs) see India as an attractive investment destination for their global expansion. Key gauges added gains as the day progressed and finally settled around the day's high, taking support from the data released by the commerce ministry showing that the country's exports rose by 4.82% to $35.45 billion in September, even as the trade deficit widened to $25.71 billion. The trade deficit in September 2021 was $22.47 billion. Additional support also came as Commerce and Industry Minister Piyush Goyal has expressed confidence that the country will achieve the export target for goods and services to $2 trillion by 2030. He emphasised on sustaining the export momentum and said that he is confident that Indian exports will be able to wither the global headwinds and will surpass growth in exports by a big margin. Moreover, the Reserve Bank of India's (RBI) weekly statistical supplement showed that India's foreign exchange reserves rose to $532.87 billion in the week through October 7. The country's reserves rose by $204 million from the previous week, the first increase since the week ended July 29. Finally, the BSE Sensex rose 491.01 points or 0.85% to 58,410.98 and the CNX Nifty was up by 126.10 points or 0.73% to 17,311.80.

 

The US markets ended higher on Monday as key earnings reports eased some of investors' fears and oversold tech names enjoyed a rebound rally. The Nasdaq's strong day was helped by some speculative tech names, with Zoom Video gaining 6% and Chinese internet stocks outperforming. Bank of America reported better-than-expected results, sending the stock up 6%. Bank of New York Mellon also posted results that beat Street expectations and its shares jumped 5%. Besides, the strength on markets also came following news the U.K. government is reversing course on previously announced fiscal plans that contributed to turmoil in the global bond markets. Britain's new finance minister Jeremy Hunt reversed almost all of the tax measures announced by his predecessor Kwasi Kwarteng in the mini-budget on September 23. On the sectoral, retail stocks turned in some of the market's best performances on the day, resulting in a 3.7 percent spike by the Dow Jones U.S. Retail Index. Substantial strength was also visible among interest rate-sensitive commercial real estate stocks, as reflected by the 3.7 percent surge by the Dow Jones US Real Estate Index. Networking stocks also showed a significant move to the upside, driving the NYSE Arca Networking Index up by 3.3 percent. Computer hardware, banking and telecom stocks also saw considerable strength amid broad based buying interest on Wall Street.

 

Crude oil futures ended slightly lower on Monday as worries about a recession weighed on outlook for energy demand. However, the dollar's weakness and signs of improved demand for oil from China helped limit the commodity's downside. The dollar index dropped to 111.92, down more than 1.2% from Friday's close. Chinese President Xi Jinping's assurance that the government will take steps to boost the struggling economy helped raise hopes about higher demand for fuel in the world's second largest economy. Benchmark crude oil futures for November delivery fell $0.15 or 0.2 percent at $85.46 a barrel on the New York Mercantile Exchange. Brent crude for December delivery lost slightly to settle at $91.62 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended lower against the US dollar on Monday, on increased demand for the greenback from importers and banks. Traders failed to take support with Finance Minister Nirmala Sitharaman's statement that Indian economy will stay on course despite global headwinds and is projected to grow at seven per cent in fiscal 2022-23, and attributed this to the conducive domestic policy environment and focus on key structural reforms. She also reiterated that the inflation rate, which is hovering over 7 per cent in India, is at a manageable level compared to where some other countries are at present. On the global front, the rouble strengthened to a one-week high against the dollar on Monday, supported by the start of a favourable month-end tax period, as oil prices edged lower and the spectre of geopolitical risk continued to lurk over Russian markets. Finally, the rupee ended at 82.30 (Provisional), weaker by 11 paisa from its previous close of 82.19 on Friday.

 

The FIIs as per Monday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 5029.48 crore against gross selling of Rs 5544.88 crore, while in the debt segment, the gross purchase was of Rs 1257.67 crore against gross selling of Rs 1870.86 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.20 crore against gross selling of Rs 39.85 crore.

 

The US markets ended higher on Monday after Britain reversed course on an economic plan, while Bank of America was the latest financial company to post solid quarterly results, which lifted optimism about the corporate earnings season. Asian markets are trading mostly in green on Tuesday after Wall Street's rally overnight. Indian markets closed higher for a second straight session on Monday following buying in index majors Reliance Industries, ICICI Bank and recovery in global markets. Today, the markets are likely to open in green on firm global cues. Some support will come as a new Multidimensional Poverty Index (MPI) released jointly by the United Nations Development Programme (UNDP) and the Oxford Poverty and Human Development Initiative (OPHI) at the University of Oxford showed that the number of people living below the poverty line in India decreased by 415 million between 2005-06 and 2019-21. Traders may take note of an RBI article stating that India needs to set up a dedicated wing in the environment ministry to release estimates of Green GDP periodically on a regular basis and create a user-friendly data dissemination platform. However, there may be some cautiousness as the State of the Economy report released by the Reserve Bank of India (RBI) stated that the headline consumer price index (CPI)-based inflation, which stood at 7.4 per cent in September, might have peaked and could fall going ahead thanks to easing momentum and favourable base effects. Besides, foreign institutional investors (FIIs) have net sold shares worth Rs 372.03 crore on October 17, as per provisional data available on the NSE. Meanwhile, Crisil said the Reserve Bank of India's revised guidelines for asset reconstruction companies (ARCs) would structurally fortify the sector through improved governance norms, better disclosures, and lower funding requirement for asset acquisition. The sugar industry stocks will be in focus as industry body ISMA said the country's sugar production is projected to be 36.5 million tonnes in the 2022-23 marketing season, an increase of 2 per cent compared to the year-ago period. There will be some reaction in power sector stocks as the union minister for power, new and renewable energy said India will have more than 65 per cent of its power generation from renewable energy sources by 2030. He also said initiatives by the Centre including the Production Linked Scheme (PLI) scheme will ensure India to have a 90 Gw solar module capacity. Investors awaited more earnings from India Inc for domestic cues.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,311.80

17,164.05

17,394.05

BSE Sensex

58,410.98

57,884.18

58,693.38

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

375.68

99.70

98.40

100.70

State Bank of India

134.85

543.20

530.04

550.54

NTPC

134.26

168.30

165.19

170.24

Tata Motors

95.43

397.00

393.36

399.76

Axis Bank

94.63

816.50

803.40

823.30

 

  • ICICI Bank has launched four Digital Banking Units (DBUs) to offer banking services to its customers digitally.
  • NTPC has signed a MoU with Mitsubishi Heavy Industries, Japan and its subsidiary Mitsubishi Power India to demonstrate the feasibility for Hydrogen co-firing blended with natural gas in MHI 701D gas turbines installed at NTPC Auraiya Gas Power Plant in Uttar Pradesh.
  • HDFC Life Insurance Company has completed Exide Life merger.
  • JSW Steel has signed a MOU with Smartex to explore the potential to promote innovation and turnkey approaches - from financing to technology availability and market access aimed at decarbonisation of the steel sector in India.
News Analysis