In a highly volatile day, Indian
equity benchmarks ended higher on Friday after a three-session losing streak,
propped up by buying at IT, TECK and Realty counters amid a positive trend
overseas. After making a positive start, key gauges soon slipped into red and
traded with volatility for most part of the day, as traders got anxious with a
report by economic think tank GTRI stating that India's exports of products
like coffee, leather hides and paperboard worth $1.3 billion annually to the
European Union will get impacted due to the deforestation regulation adopted by
the EU earlier this week. Traders also took a note of report that India and
Britain are struggling to make progress in free trade talks due to differences
on some key tariff lines and investment protection rules, making a deal
unlikely during Prime Minister Narendra Modi's second term ending next year.
However, markets gained traction in late afternoon deals and settled with gains
of around half a percent, as traders got solace after S&P Global Ratings
affirmed India's sovereign rating at BBB- for the long term and A-3 for the
short term, with a stable outlook, as sound economic fundamentals were expected
to underpin growth over the next two to three years. Some support also came
with provisional data from the National Stock Exchange showing that foreign
institutional investors (FIIs) remained net buyers and bought shares worth Rs
970.18 crore on May 18, 2023. Meanwhile, the Securities Exchange Board of India
(Sebi) has proposed to make the total expense ratio (TER) charged by mutual
funds (MFs), inclusive of the Goods and Services Tax (GST) charged on
management fee and has shared revised expense slabs for MFs to account for the
tax outgo. Finally, the BSE Sensex rose 297.94 points or 0.48% to 61,729.68 and
the CNX Nifty was up by 73.45 points or 0.41% to 18,203.40.
The US markets snapped two-day
gaining streak and ended lower on Friday as Republican negotiators walked out
of a meeting over raising the U.S. debt ceiling, offsetting recent optimism
about an impending deal. However, selling pressure remained relatively subdued
as traders still expect lawmakers to eventually reach a debt ceiling deal.
Comments from Federal Reserve Chair Jerome Powell reinforcing expectations the
central bank will leave interest rates unchanged next month also helped limit
the downside. Citing recent turmoil in the banking sector, Powell suggested
interest rates may not need to rise as much as it would have otherwise to
achieve our goals. However, Powell noted inflation remains too high and
stressed the Fed would be steadfast in pursuit of its goal of bringing
inflation down to its 2 percent target. On the sectoral front, Airline stocks
moved sharply lower over the course of the session, dragging the NYSE Arca
Airline Index down by 1.8 percent. Significant weakness also emerged among
housing stocks, with the Philadelphia Housing Sector Index falling by 1.4
percent after reaching its best intraday level in well over a year in early
trading. Retail stocks also moved to the downside as the day progressed,
resulting in a 1.3 percent drop by the Dow Jones U.S. Retail Index. On the
other hand, biotechnology stocks turned in a strong performance on the day, driving
the NYSE Arca Biotechnology Index up by 1.1 percent.
Crude oil futures trimmed their
initial gains and settled lower on Friday amid reports that the debt ceiling
talks paused after Republican negotiators walked out the meeting, offsetting
recent optimism about an impending deal. Comments by Federal Reserve Chairman
Jerome Powell that inflation remains far above the central bank's objective,
and that no decisions had been made yet on the next interest rate action also
weighed on markets. Meanwhile, according to a report from Baker Hughes, the oil
rig count in the U.S. dropped by 11 to 575 this week, the biggest weekly
decline since September 2021. Benchmark crude oil futures for June delivery
fell $0.31 or about 0.4 percent to settle at $71.55 a barrel on the New York
Mercantile Exchange. Brent crude for July delivery declined $0.14 or 0.17
percent to settle at $75.72 a barrel on London's Intercontinental Exchange.
Rupee settled lower against
dollar on Friday weighed down by a strong greenback overseas and surging crude
prices in the international market. Traders got anxious as a report by economic
think tank GTRI said India's exports of products like coffee, leather hides and
paperboard worth $1.3 billion annually to the European Union will get impacted
due to the deforestation regulation adopted by the EU earlier this week. On the
global front, the pound was heading for its second straight weekly fall against
the dollar on Friday, weighed down by a resurgent dollar and weakness in the
British economy. Finally, the rupee ended at 82.67 (Provisional), weaker by 5
paise from its previous close of 82.62 on Thursday.
The FIIs as per Friday's data
were net buyers in equity segment, while net sellers in debt segment. In equity
segment, the gross buying was of Rs 8521.76 crore against gross selling of Rs
6717.12 crore, while in the debt segment, the gross purchase was of Rs 686.38
crore against gross selling of Rs 856.66 crore. Besides, in the hybrid segment,
the gross buying was of Rs 4.28 crore against gross selling of Rs 9.80 crore.
The US markets ended lower on
Friday as investors fretted over debt default. Asian markets are trading mixed
on Monday ahead of debt ceiling talks between U.S. President Joe Biden and
House Republican Speaker Kevin McCarthy later in the day. Indian markets
reversed their three-day losing streak on the back of renewed buying interest
in auto and IT stocks. Today, start of new week is likely to be cautious amid
weakness in global markets as investors remain worried about the ongoing debt
ceiling negotiations in the US, the resilience of the banking space and the
geopolitical situation in Europe. Some volatility may come in the markets ahead
of F&) expiry later in the week. Foreign fund outflows likely to dent
sentiments. Foreign institutional investors (FIIs) sold shares worth Rs 113.46
crore on May 19, provisional data from the National Stock Exchange showed.
However, some respite may come later in the day as the engineering export
promotion council said exports of engineering goods to Russia jumped 11 times
in April this year to $133.6 million as compared to year-ago month while the US
and China markets continued to soften. Some support may come as the RBI said
rising for the second consecutive week, India's forex kitty jumped $3.553
billion to $599.529 billion for the week ended May 12. The overall reserves had
jumped by $7.196 billion to $595.976 billion for the previous reporting week.
Traders may take note of report that the Reserve Bank approved Rs 87,416 crore
dividend payout to the central government for 2022-23, nearly triple of what it
paid in the previous year. The dividend payout was Rs 30,307 crore for
accounting year 2021-22. Besides, retail inflation for farm workers and rural
labourers eased marginally to 6.5 per cent and 6.52 per cent in April compared
to 7.01 and 6.94 per cent, respectively, in March this year. Meanwhile, the RBI
said that currency notes of Rs 2,000 denomination will be withdrawn from
circulation. The central bank has asked banks to provide deposit and/or
exchange facility for Rs 2,000 notes until September 30, 2023. former finance
secretary Subhash Chandra Garg said withdrawal of Rs 2,000 currency notes is a
non-event and will have zero impact on the economy and monetary policy. Banking
stocks will be in focus with Reserve Bank of India (RBI) data showing that
credit offtake remained robust early into the current financial year, with 15.5
per cent growth year on year (YoY) clocked till May 05, 2023 as against 11.8
per cent a year ago. There will be some reaction in the hospitality sector stocks
with a private report that the Indian hospitality sector seems to be a in
bullish phase after hitting a low due to the pandemic. A blend of diverse
positives for the sector in the form of new and emerging trends seems to have
led this push. Investors await more of financial results from India Inc for
domestic cues, with AB Fashion and Retail, BPCL and Indiabulls Housing Finance,
among others due to post its earnings later in the day.
Support
and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
18,203.40
|
18,103.16
|
18,260.86
|
BSE
Sensex
|
61,729.68
|
61,392.71
|
61,925.62
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State
Bank of India
|
422.94
|
575.65
|
568.29
|
584.64
|
Tata
Steel
|
298.49
|
104.70
|
103.94
|
105.59
|
ITC
|
257.68
|
420.10
|
413.26
|
425.01
|
Tata
Motors
|
193.44
|
525.00
|
511.04
|
532.69
|
ICICI
Bank
|
154.27
|
954.00
|
945.06
|
959.46
|
State Bank of India has entered into partnership with Godrej Agrovet's Oil Palm Business to offer loans to oil palm farmers for setting up micro irrigation facility.
JSW Steel has reported 11.91% rise in its consolidated net profit at Rs 3741 crore for Q4FY23 as compared to Rs 3343 crore for the same quarter in the previous year.
HCL Technologies has launched its ADvantage Code software solution on AWS Marketplace.
Power Grid Corporation of India has reported 3.95% rise in its consolidated net profit at Rs 4,320.43 crore for Q4FY23 as compared to Rs 4,156.44 crore for Q4FY22.