Daily Newsletter
NSE Intra-day chart (21 July 2022)
Top Gainers
Company NameClose% Change
Top Losers
Company NameClose% Change
World Indices
IndicesLast Trade% Change
Indices
IndicesLast Trade% Change
FII Activity(Rs. Cr)
DateMarketGross PurchaseGross SalesNet Change
Equity
Debt
Equity
Debt
Equity
Debt
 
Market Commentary 22 July 2022
Benchmarks likely to open in green on firm global cues

 

Indian equity benchmarks continued their winning momentum for the fifth consecutive day and settled with gains of over half percent on Thursday led by gains in telecom, capital goods and industrials stocks. After making cautious start, key gauges soon gained traction to trade in green, as traders took support 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. Some support also came as rating agency ICRA's report stated that the growth in assets under management (AUM) of non-banking financial companies (NBFCs) and housing finance companies (HFCs) is likely to be at 9-11 per cent in FY23 compared to a rise of 9.5 per cent in the last fiscal. Adding more optimism, Foreign Institutional Investors (FII) remained net buyers for the third day straight on Dalal Street on Wednesday. FIIs pumped in Rs 1,780 crore into domestic stocks. However, in the late afternoon deals, key gauges trimmed most of their gains as traders got anxious with a private report stating that India's economic activity showed early signs of cooling off in June as acute price pressures, rising interest rates, and a falling rupee dampened sentiment after a strong showing the previous month. But, markets regained traction to end higher taking support from Chief Economic Advisor (CEA) V Anantha Nageswaran's statement the depreciation of the rupee against the US dollar has been lower than other major global currencies such as the Euro, the British pound and the Japanese yen. He attributed depreciation in rupee and other currencies against the US dollar to the aggressive monetary tightening by the US Federal Reserve. Additional support also came after the labor ministry indicated that retirement fund body EPFO added 16.82 lakh, new subscribers, in May 2022, nearly 83 percent more than 9.2 lakh enrolled in the year-ago month. Finally, the BSE Sensex rose 284.42 points or 0.51% to 55,681.95 and the CNX Nifty was up by 84.40 points or 0.51% to 16,605.25.

 

The US markets ended higher on Thursday, with Nasdaq ending higher over one percent after shares of Tesla (TSLA) rose 9.8 percent on reporting second quarter earnings that beat expectations. However, cautiousness prevailed in the markets during the trading session as traders expressed some uncertainty about the outlook for the markets following the recent upward move. On the economic data front, the Labor Department showing initial jobless claims unexpectedly rose to an eight-month high in the week ended July 16th. The report showed initial jobless claims crept up to 251,000, an increase of 7,000 from the previous week's unrevised level of 244,000. The uptick surprised participants, who had expected jobless claims to edge down to 240,000. Jobless claims inched higher for the third straight week, reaching their highest level since hitting 265,000 in the week ended November 13, 2021. A separate report released by the Federal Reserve Bank of Philadelphia showed regional manufacturing activity unexpectedly contracted at a faster rate in the month of July. The Philly Fed said its current general activity index slumped to a negative 12.3 in July from a negative 3.3 in June, with a negative reading indicating a contraction in regional manufacturing activity. Street had expected the index to rebound to a positive 0.4. The Conference Board also released a report showing its index of leading economic indicators decreased for the fourth straight month in June. The Conference Board said its leading economic index slumped by 0.8 percent in June after falling by a revised 0.6 percent in May. Street had expected the leading economic index to decline by 0.5 percent compared to the 0.4 percent drop originally reported for the previous month.

 

Crude oil futures ended deeply in red on Thursday on weakened demand in the United States, the world's top oil consumer, and a pick-up in supply from Libya. Growing stockpiles of crude, concerns about the Chinese economy due to the country's zero-COVID approach and lingering worries about interest-rate hikes by major central banks also tempered fears of a tight market. Meanwhile, the European Central Bank (ECB) raised rates more than expected on Thursday looking to rein in inflation, with ECB President Christine Lagarde warning that inflation risks had intensified. Benchmark crude oil futures for September delivery fell $3.53 or 3.5 percent to settle at $96.35 a barrel on the New York Mercantile Exchange. Brent crude for September delivery lost $3.06 or 2.9 percent to settle at $103.86 a barrel on London's Intercontinental Exchange.

 

Erasing previous session losses, Indian rupee ended substantially stronger on fresh selling of American currency by banks and exporters. Traders got support 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. Additional support came with Chief Economic Advisor (CEA) V Anantha Nageswaran's statement the depreciation of the rupee against the US dollar has been lower than other major global currencies such as the Euro, the British pound and the Japanese yen. Adding more optimism, Foreign Institutional Investors (FII) remained net buyers for the third day straight on Dalal Street on Wednesday. FIIs pumped in Rs 1,780 crore into domestic stocks. On the global front, pound slid against the dollar on Thursday amid worsening risk appetite ahead of the European Central Bank rate decision and amid political turmoil in Italy. Finally, the rupee ended at 79.85 (provisional), stronger by 20 paisa from its previous close of 80.05 on Wednesday.

 

The FIIs as per Thursday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 12813.31crore against gross selling of Rs 5801.49 crore, while in the debt segment, the gross purchase was of Rs 1130.26 crore against gross selling of Rs 92.23 crore. Besides, in the hybrid segment, the gross buying was of Rs 0.32 crore against gross selling of Rs 6.66 crore.

 

The US markets ended higher on Thursday after investors flocked to growth stocks. Asian markets are trading mostly in green with marginal gains on Friday after Japan's inflation rose 2.2 per cent in June. Indian markets rose around half a percent each on Thursday to extend gains for a fifth straight session as the corporate earnings season gathered steam. Today, markets are likely to open in green amid strong foreign inflows, sustained rally in the US markets, and easing crude oil prices. Foreign institutional investors (FIIs) have net purchased shares worth Rs 1,799.32 crore, continuing buying for the fourth consecutive session on July 21, as per provisional data available on the NSE. Traders may take note of Commerce Secretary BVR Subrahmanyam's statement that negotiations for the India-UK free trade agreement will be concluded by August 31 and ready for signing by Diwali in October. However, there may be some cautiousness as the Federation of Indian Chambers of Commerce and Industry's (FICCI) quarterly survey showed that the Indian economy is expected to expand 7% in fiscal 2022/23, slower than a previous estimate of 7.4% and the central bank's 7.2% projection. The survey said the war in Ukraine is likely to keep inflation high and dent consumer demand. Also, the Asian Development Bank (ADB) has slashed its growth forecast for India to 7.2 per cent for FY23 from 7.5 per cent estimated earlier citing higher than anticipated inflation since April and subsequent monetary tightening by the central bank. Meanwhile, capital markets regulator Sebi has proposed a regulatory framework for the online bond platforms that are selling listed debt securities. Under the proposal, bond platforms should register as stock brokers (debt segment) with the Securities and Exchange Board of India (Sebi) or be run by Sebi-registered brokers. There will be some buzz in pharma industry stocks as the government launched three schemes to strengthen Micro, Small and Medium Enterprises (MSMEs) in the pharmaceutical sector. Union minister Mansukh Mandaviya noted that the schemes envisage technology upgradation, setting up of common research centres and effluent treatment plants in clusters for the pharma MSMEs. Banking stocks will be in focus as S&P Global Ratings said non-performing loans of banks are expected to decline to 5-5.5 per cent of the total advances by March 2024. There will be some reaction in preventive healthcare industry stocks with a private report stating that India's preventive healthcare sector - fitness, wellness, foods and supplements, early diagnostics and health tracking - is projected to reach $197 bn by 2025, growing at a CAGR of 22 per cent. Investors awaited corporate earnings from India Inc for domestic cues, with Reliance Industries and UltraTech among the large-cap companies slated to report their financial results later in the day. Reliance Industries is likely to report strong earnings for the quarter ended June 30, 2022.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

16,605.25

16,517.11

16,660.16

BSE Sensex

55,681.95

55,388.97

55,856.71

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

IndusInd Bank

235.81

948.10

906.46

975.86

Wipro

226.91

414.00

405.24

420.14

Oil and Natural Gas Corporation

208.53

133.10

132.10

133.80

ITC

160.42

299.55

297.64

301.84

State Bank of India

138.14

512.05

508.06

514.71

 

  • IndusInd Bank has reported a rise of 60.53% in its consolidated net profit at Rs 1,631.14 crore for Q1FY23 as compared to Rs 1,016.11 crore for the same quarter in the previous year. 
  • State Bank of India has received approval for raising capital of Rs 11000 crore by way of issuance of Basel III compliant debt instrument in USD/INR and/or any other convertible currency during FY23. 
  • JSW Steel is undertaking various initiatives to reduce carbon footprint in line with India's net zero ambitions.
  • NTPC has inked a MoU with Moroccan Agency for Sustainable Energy for cooperation in renewable energy.
News Analysis