Indian equity
benchmarks traded volatile and settled marginally in the green on the day of
monthly expiry of May month contracts. Markets made a cautious start, as rating
agency Crisil in its research report said higher input prices and disruptions
to the rural economy have resulted in price pressures and inflation is back to
haunt us. The report by Crisil said it sees upside risks to its 5 per cent
estimate on consumer price inflation in FY21 because of this. Besides, India
recorded over 211,000 new Covid infections, while deaths from the disease rose
by 3,842. The country's total cases now stand at 27.36 million. However,
benchmarks moved higher in noon deal as traders took some support with private
report that the government may at the beginning of the unlock phase announce
another stimulus package for the most hit sectors such as small business and
self-employed, with the world's worst pandemic outbreak scarring nascent
economic recovery. However, key indices erased all the gains to turn negative
in late afternoon session, as traders got anxious with Reserve Bank of India's
statement that the second wave of COVID-19 pandemic has triggered revision of
growth projections for the current financial year with consensus gravitating
towards its earlier forecast of 10.5 per cent. Reserve Bank's projection 10.5
per cent for the year 2021-22 -- 26.2 per cent in Q1, 8.3 per cent in Q2, 5.4
per cent in Q3 and 6.2 per cent in Q4. But, markets managed to end session in
green terrain, taking support from report that amid the second wave of COVID-19
pandemic, CII President Uday Kotak has strongly recommended the government to
consider another fiscal package to support the lower end of the society as well
as small and medium businesses. Traders took a note of report that the
shortfall in GST compensation payable to states in the current fiscal is
estimated at Rs 2.69 lakh crore, of which Rs 1.58 lakh crore would have to be
borrowed this year. The Centre expects to collect over Rs 1.11 lakh crore
through cess on luxury, demerit and sin goods which will be given to the states
to compensate them for the shortfall in revenue arising out of GST
implementation. Finally, the BSE Sensex rose 97.70 points or 0.19% to
51,115.22, while the CNX Nifty was up by 36.40 points or 0.24% to 15,337.85.
The US markets
ended mostly higher on Thursday as investors cheered stronger-than-expected
labor-market data. A report released by the Labor Department showed first-time
claims for US unemployment benefits fell by more than expected in the week
ended May 22nd. The Labor Department said initial jobless claims slid to
406,000, a decrease of 38,000 from the previous week's unrevised level of
444,000. Street had expected jobless claims to dip to 425,000. Jobless claims
decreased for the fourth consecutive week, once again falling to their lowest
level since hitting 256,000 in the week ended March 14, 2020. The report showed
the less volatile four-week moving average also fell to its lowest level in
over a year, dropping to 458,750 from the previous week's unrevised average of
504,750. However, the lackluster performance on the day came as traders
continued to look ahead to a highly anticipated reaching on inflation due out
Friday. The inflation reading is said to be preferred by the Federal Reserve
and could have a significant impact on the outlook for monetary policy.
Meanwhile, a separate report from the Commerce Department showed an unexpected
pullback in durable goods orders in April, although the decrease was largely
due to a steep drop in orders for transportation equipment. The report showed
durable goods orders tumbled by 1.3 percent in April after jumping by an
upwardly revised 1.3 percent in March. The pullback surprised participants, who
had expected durable goods orders to climb by 0.7 percent compared to the 0.8
percent increase that had been reported for the previous month.
Crude oil futures ended higher
for 5th Straight Session on Thursday bolstered by strong US economic data that
offset investors' concerns about the potential for a rise in Iranian supplies.
Data released by the Labor Department said initial jobless claims in the US
slid to 406,000 in the week ended May 22nd, a decrease of 38,000 from the
previous week's unrevised level of 444,000. Street had expected jobless claims
to dip to 425,000. Iran and world powers are in talks in Vienna, discussing
reviving the 2015 nuclear deal, formally known as the Joint Comprehensive Plan
of Action. According to recent reports, the latest round of talks was
constructive and the parties made meaningful progress. Meanwhile, the Organization
of the Petroleum Exporting Countries and its allies are scheduled to meet next
Wednesday (June 1), to discuss energy market conditions and the cartel's
production policy. Crude oil futures for July surged $0.64 or 1 to settle at
$66.85 barrel on the New York Mercantile Exchange. July Brent crude rose $0.43
or 0.63 percent to settle at 69.16 a barrel on London's Intercontinental
Exchange.
Indian rupee ended significantly
higher against dollar on persistent selling of the American currency by
exporters. This was the second consecutive session when the rupee was traded
higher against dollar. Sentiments perked up as Prime Minister Narendra Modi and
French President Emmanuel Macron discussed the positive outcomes of the
recently concluded India-EU Leaders' Meeting. India and the European Union (EU)
had on May 8 announced their decision to resume negotiations for a balanced and
comprehensive trade agreement after a gap of eight years and unveiled an
ambitious connectivity partnership. On the global front, sterling recovered
from an overnight drop against the dollar that took it to a 10-day low on
Thursday, as the greenback's spike higher fizzled out by the start of European
trading. Finally, the rupee ended 72.60, stronger by 17 paise from its previous
close of 72.77 on Tuesday.
The FIIs as per Thursday's data
were net buyer in equity segment, while net seller in debt segment. In equity
segment, the gross buying was of Rs 12548.11 crore against gross selling of Rs
11053.23 crore, while in the debt segment, the gross purchase was of Rs 577.55
crore with gross sales of Rs 875.22 crore. Besides, in the hybrid segment, the
gross buying was of Rs 33.23 crore against gross selling of Rs 50.96 crore.
The US markets ended mostly
higher on Thursday as data showing improvement in the labor market helped
bolster expectations in the economic recovery and spurred a minor rotation
towards stocks seen as more likely to benefit from the rebound. Asian markets
are trading mostly in green on Friday as investors bet the US will lead the
world out of the COVID-19 pandemic, with the focus turning to a multi-trillion
dollar spending boost by the Biden administration. Indian markets ended higher
with Nifty at record closing high boosted by banks and IT stocks, as rise in
Asian peers. Today, the markets are likely to get positive start tracking
global peers coupled with decline in covid cases in the country. India recorded
179,770 fresh Covid-19 cases in the last 24 hours, the lowest daily count in 44
days, as infections continued to decrease in the country. Investors will be
eyeing the goods and services tax (GST) Council meet today after a span of
seven months. There are reports that some opposition ruled states could pitch
for an extension of the GST compensation regime for five more years beyond
2022. Sources say that the Council is expected to discuss the compensation
shortfall, which is estimated at Rs 1.6 lakh crore for the current fiscal, and
is likely to be funded by borrowings this year as well. Some support will come
with a private report that the government is hopeful of a speedy launch of
single-dose COVID-19 vaccine Sputnik Light in India and all stakeholders,
including the Russian manufacturer and its Indian partners, have been directed
to fast-track the application and regulatory approval procedures for the jab to
boost the country's vaccination drive. Besides, the government said India is
witnessing a downswing in the second wave of COVID-19 and hopefully it will be
sustained even when restrictions are gently, systematically and cautiously
relaxed. Though, there may be some cautiousness as the central bank, in its
annual report, issued caution over the meteoric rise in stock prices at a time
when the country's gross domestic product (GDP) has contracted. Meanwhile,
Foreign Institutional Investors (FII) turned net sellers on Thursday, pulling
out Rs 660 crore from domestic markets. Domestic Institutional Investors (DII)
were net buyers, pumping in Rs 112 crore into domestic equities. Banking stocks
will be in focus as Reserve Bank of India (RBI) asked banks to closely monitor
their bad loans and prepare themselves for higher provisioning in the wake of
second COVID wave and the Supreme Court order lifting the ban on classification
of non-performing assets. Also, RBI data showed financial frauds reported by
banks decreased by 15 percent in numbers and by 25 percent in total value terms
compared to the previous financial year. There will be some reaction in realty
sector stocks as ratings agency Crisil said although the market is growing in
2021-22, a full recovery in the residential realty sector is expected only in
2024. According to it, the country's housing market is expected to grow by 5-10
per cent in the current fiscal year.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,337.85
|
15,278.71
|
15,390.76
|
BSE
Sensex
|
51,115.22
|
50,910.28
|
51,301.52
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State
Bank of India
|
733.92
|
425.20
|
415.10
|
432.20
|
Bharat
Petroleum Corporation
|
514.94
|
467.85
|
459.90
|
481.90
|
Tata
Motors
|
494.84
|
318.60
|
315.61
|
322.51
|
ITC
|
475.54
|
211.15
|
209.59
|
213.44
|
Indian
Oil Corporation
|
343.23
|
110.25
|
108.90
|
112.65
|
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