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NSE Intra-day chart (20 July 2022)
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Market Commentary 21 July 2022
Markets likely to get flat-to-positive start amid mixed global cues

 

Rising for fourth consecutive day, Indian equity benchmarks ended Wednesday's session with gains of over a percent, led by strong buying in IT, TECK and Metal stocks amid positive global market sentiments. Key gauges made positive start and stayed in green for whole day, as traders took encouragement with Finance ministry's statement that the economy is on course to achieve projected 8-8.5 per cent growth based on high-frequency indicators for the first quarter of the current fiscal. Traders also found some solace from Economic Affairs Secretary Ajay Seth's statement that the rupee is managed well and there is nothing to be 'overtly' worried about the depreciation in the domestic currency against the US dollar. Sustained buying by FIIs also aided the sentiment in the markets. Foreign Institutional Investors (FIIs) were net buyers for the second day running on Dalal Street. FIIs pumped in Rs 976 crore on July 19. Markets extended gains in afternoon deals, taking support from the commerce and industry ministry stating that foreign direct investment (FDI) inflows in the research and development sector have increased to $343.64 million in 2021 against $55.77 million in 2020. Traders also took a note of Rajya Sabha informed that cases of frauds on public sector banks have come down by about 50 per cent in FY'22 to 2,369 as against 4,680 recorded in the previous fiscal. The amount involved in the frauds too declined to Rs 3,204 crore from Rs 7,306 crore in 2020-21. Market participants overlooked the Securities and Exchange Board of India (Sebi) in its latest data showed that investment in the Indian capital markets through participatory notes (P-notes) declined to Rs 80,092 crore till June-end, making it the lowest level in 20 months, on aggressive rate hike by the US Federal Reserve. Finally, the BSE Sensex rose 629.91 points or 1.15% to 55,397.53 and the CNX Nifty was up by 180.30 points or 1.10% to 16,520.85.

 

The US markets ended higher on Wednesday, fueled by a rally in tech stocks. Wednesday marked the highest closing level for the Nasdaq since June 8 - and the highest since June 9 for the Dow and the S&P 500. Those moves follow Tuesday's rally as investors, betting that markets have finally found a bottom, shifted into more risky assets such as tech stocks. The jump by the Nasdaq reflected strong among tech stocks, which came amid a positive reaction to earnings news from Netflix (NFLX). Shares of Netflix surged by 7.4 percent to a three-month closing high after the streaming giant reported better than expected second quarter earnings and a smaller than expected subscriber loss. Semiconductor stocks also turned in a strong performance on the day, with the Philadelphia Semiconductor Index spiking by 2.5 percent. Significant strength was also visible among computer hardware stocks, as reflected by the 1.7 percent advance by the NYSE Arca Computer Hardware Index. On the economic data front, a report released by the National Association of Realtors (NAR) showed existing home sales tumbled by much more than expected in the month of June. NAR said existing home sales plunged by 5.4 percent to an annual rate of 5.12 million in June after slumping by 3.4 percent to an annual rate of 5.41 million in May. Street had expected existing home sales to decrease by 0.6 percent to a rate of 5.38 million. Existing home sales declined for the fifth consecutive month, falling to their lowest level since June of 2020.

 

Crude oil futures ended lower on Wednesday after US government data showed lower gasoline demand during the peak summer driving season. Data showed US gasoline inventories rose 3.5 million barrels last week as against an expected increase of 71,000 barrels. Product supplied of gasoline - a proxy for demand - was about 8.5 million barrels per day, or about 7.6% lower than the same time a year ago. Besides, worries about interest rate hikes by central banks weighed as well on oil prices. However, downside remained capped as data from US Energy Information Administration (EIA) showed crude inventories in the US dropped by 446,000 barrels last week. Benchmark crude oil futures for August delivery fell $1.96 or 1.9 percent to settle at $102.26 a barrel on the New York Mercantile Exchange. Brent crude for September delivery lost $0.43 or 0.38 percent to settle at $106.92 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended considerably weaker on Wednesday amid strong dollar demand from importers amid high crude oil prices. Traders were worried even after economic Affairs Secretary Ajay Seth stated that the rupee is managed well and there is nothing to be 'overtly' worried about the depreciation in the domestic currency against the US dollar. Meanwhile, according to private report India's central bank is prepared to sell a sixth of its foreign exchange reserves to defend the rupee against a rapid depreciation after it plumbed record lows in recent weeks. On the global front, Sterling steadied on Wednesday against the dollar as data showed British inflation climbed to its highest rate in 40 years, but only slightly above forecast. Finally, the rupee ended at 80.05 (provisional), weaker by 13 paisa from its previous close of 79.92 on Tuesday.

 

The FIIs as per Wednesday's data were net buyers in equity segment, while they were sellers in debt segment. In equity segment, the gross buying was of Rs 6206.60 crore against gross selling of Rs 5147.13 crore, while in the debt segment, the gross purchase was of Rs 129.82 crore against gross selling of Rs 541.96 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.64 crore against gross selling of Rs 12.96 crore.

 

The US markets ended higher on Wednesday as investors flocked to buy tech stocks. Asian markets are trading mostly in red on Thursday amid concerns about steep hikes in COVID-era interest rates and their impact on economic growth. Indian markets ended higher for the fourth day straight on Wednesday as bulls asserted control on Dalal Street and index heavyweights such as Reliance Industries surged. Today, markets are likely to get flat-to-positive start amid mixed global cues. Traders will be taking encouragement with former Niti Aayog Vice Chairman Arvind Panagariya's statement that Indian economy, which has grown fairly rapidly in the last 17 years, will grow at 7-8 per cent in the next couple of decades. He noted that the country's economy grew 7.4 per cent between 2014-15 to 2019-20. Some support will come with a private report that private equity players and venture capital funds have pumped in 28 per cent more money into domestic companies, mostly into start-ups, totalling $34.1 billion in the first half of the year. Some optimism may also come as Foreign Institutional Investors (FII) were net buyers for the third day straight on Dalal Street. FIIs pumped in Rs 1,780 crore into domestic stocks. Traders may take note of report that chief economic advisor (CEA) V Anantha Nageswaran said the depreciation of the rupee against the greenback has been lower than that of other major global currencies, such as the euro, the British pound and the Japanese yen. Meanwhile, minister of consumer affairs, food, and public distribution Piyush Goyal has said that the Centre has no plans to subsidise the export of pulses. Besides, Karnataka Chief Minister Basavaraj Bommai said the Centre has cleared GST dues to the tune of Rs 8,800 crore and the rest will be paid soon. There will be some buzz in metal stocks as Union Minister Faggan Singh Kulaste said the exports of finished steel from India jumped over 25 per cent to 13.49 million tonne (MT) in 2021-22. During the preceding 2020-21 fiscal, the exports stood at 10.78 MT. sugar stocks will be in focus with a private report that India may allow sugar mills to export more than previously permitted to help them prevent contract defaults, according to people familiar with the matter. A slew of corporate earnings will guide investor sentiments in today's trade as companies like Hindustan Zinc, PVR, RBL Bank, and JSW Energy report their June quarter 2022 (Q1FY23) results.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

16,520.85

16,478.54

16,575.59

BSE Sensex

55,397.53

55,253.76

55,585.79

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Oil and Natural Gas Corporation

603.17

132.55

130.96

135.36

State Bank of India

192.80

508.60

502.46

512.66

Tata Motors

171.54

453.45

449.89

458.89

ITC

157.89

298.20

294.70

300.60

Wipro

126.18

412.10

406.96

417.36

 

  • Hindustan Unilever has reported a rise of 11.06% in its net profit at Rs 2,289 crore for Q1FY23 as compared to Rs 2,061 crore for the same quarter in the previous year.
  • Maruti Suzuki India has rolled out its game changer SUV The Grand Vitara.
  • Bajaj Finserv's subsidiary company -- Bajaj Allianz Life Insurance has entered into strategic partnership with DBS Bank India to offer a wide array of life insurance solutions to the bank's 3M customers.
  • Grasim Industries has received board's approval for foray into B2B e-commerce platform for the Building Materials segment with an investment of around Rs 2,000 crore over the next 5 years.
News Analysis