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NSE Intra-day chart (27 October 2022)
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Market Commentary 28 October 2022
Benchmarks likely to get flat-to-positive start

 

Indian equity benchmarks managed to end in green on Thursday, helped by buying in Metal, Realty and Utilities stocks. Key gauges opened higher, as traders found support with S&P Global Market Intelligence stating that Asia-Pacific region, which produces 35 per cent of the world GDP, is expected to dominate global economic growth in 2023, supported by regional free-trade agreements, efficient supply chains, and competitive costs. It also said Southeast Asia and India will benefit from trade diversification away from mainland China. Besides, describing India as an economic superpower, Britain said that it was working towards the best Free Trade Agreement (FTA) that is beneficial to both the countries. Traders also took a note of China's General Administration of Customs (GAC) latest data showed that India and China bilateral trade continued to boom, crossing $100 billion for the second year in the first nine months of 2022 while India's trade deficit climbed to over $75 billion. However, markets cut most of their gains in afternoon deals, as formal job creation in India slowed down in August after remaining buoyant for the last four months across the Employees' Provident Fund Organisation, the Employees' State Insurance Corporation and the National Pension Scheme. Some concern also came as provisional data available on the NSE shows foreign institutional investors (FIIs) net sold shares worth Rs 247.01 crore on October 25. But, markets managed to finish the session in green taking support from Union Minister of Finance & Corporate Affairs Nirmala Sitharaman's statement that despite exogenous threats, India's well-targeted policy mix, accompanied by major structural reforms and sound external balance sheet, have aided its growth to remain resilient. Finally, the BSE Sensex rose 212.88 points or 0.36% to 59,756.84 and the CNX Nifty was up by 80.60 points or 0.46% to 17,736.95.

 

The US markets ended mostly in red on Thursday despite the Commerce Department released a report showing US economic activity rebounded by slightly more than expected in the third quarter. The report said real gross domestic product shot up by 2.6 percent in the third quarter following a 0.6 percent drop in the second quarter and a 1.6 percent slump in the first quarter. Street had expected GDP to jump by 2.4 percent. The rebound in GDP largely reflected a 2.8 percent boost from trade, as exports soared by 14.4 percent and imports, which are a subtraction in the calculation of GDP, plunged by 6.9 percent. A 1.4 percent increase in consumer spending also contributed the GDP growth, as a 2.8 percent jump in spending on services more than offset a 1.2 percent drop in spending on goods. The Commerce Department said the rebound in GDP also reflected increases in non-residential fixed investment, federal government spending and state and local government spending, while decreases in residential fixed investment and private inventory investment limited the upside. On the sectoral front, Biotechnology stocks showed a significant pullback on the day, with the NYSE Arca Biotechnology Index slumping by 1.9 percent after ending the previous session at its best closing level in well over a month. Significant weakness also emerged among semiconductor stocks, as reflected by the 1.5 percent drop by the Philadelphia Semiconductor Index. Gold stocks also showed a notable move to the downside amid a modest decrease by the price of the precious metal, dragging the NYSE Arca Gold Bugs Index down by 1.5 percent.

 

Crude oil futures ended higher on Thursday, magnifying gains from the previous session, on optimism about demand growth after data from the US Commerce Department showing bigger than expected rebound in US economic activity helped ease fears about a recession. The report from the Commerce Department showed real gross domestic product shot up by 2.6% in the third quarter following a 0.6% drop in the second quarter and a 1.6% slump in the first quarter. Street had expected GDP to jump by 2.4%. Benchmark crude oil futures for December delivery rose $1.17 or 1.3 percent at $89.08 a barrel on the New York Mercantile Exchange. Brent crude for December delivery surged $1.27 or about 1.35 percent to settle at $95.06 (Provisional) a barrel on London's Intercontinental Exchange. 

 

Indian rupee ended higher against dollar on Thursday, on persistent selling of the American currency by exporters. Sentiments were upbeat as S&P Global Market Intelligence said Asia-Pacific region, which produces 35 per cent of the world GDP, is expected to dominate global economic growth in 2023, supported by regional free-trade agreements, efficient supply chains, and competitive costs. It also said Southeast Asia and India will benefit from trade diversification away from mainland China. Besides, describing India as an economic superpower, Britain said that it was working towards the best Free Trade Agreement (FTA) that is beneficial to both the countries. On the global front, Sterling fell on Thursday against a strengthening U.S. dollar and steadied against the euro ahead of an expected 75 basis point interest rate hike from the European Central Bank. Finally, the rupee ended at 82.47 (Provisional), stronger by 34 paisa from its previous close of 82.81 on Tuesday.

 

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 18884.96 crore against gross selling of Rs 18553.91 crore, while in the debt segment, the gross purchase was of Rs 97.18 crore against gross selling of Rs 39.51 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.70 crore against gross selling of Rs 17.40 crore.

 

The US markets ended mostly in red on Thursday as investors contended with solid economic data and a mixed bag of corporate earnings. Asian markets are trading mostly lower on Friday ahead of the Bank of Japan's interest rate decision. Indian markets managed to finish a choppy session in the green on Thursday tracking weakness in the dollar index in international markets. Today, markets are likely to get flat-to-positive start amid mixed global cues. Buying in FIIs likely to aid domestic sentiments. As per provisional data available on the NSE, foreign institutional investors (FIIs) have net bought shares worth Rs 2,818.40 crore on October 27. Some support will come with a private report that Indian economy's recovery from the coronavirus pandemic, as well as the pace of the economy is better as compared to global peers despite headwinds such as high inflation, monetary policy tightening, rising interest rate, and the Russia-Ukraine war. Traders will be taking support with another private report that India can accelerate green investments to $12.1 trillion by 2050 and reap a host of benefits. However, there may be some cautiousness as bank borrowings from the central bank's liquidity adjustment facility (LAF) window have climbed sharply. Latest data from the Reserve Bank of India (RBI) showed banks borrowed Rs 73,297 crore from the central banks through different LAF windows in a drastic change from the situation just five months ago in May when as much as Rs 3.10 lakh crore was kept with the central bank in excess liquidity. Traders may be concerned as the International Monetary Fund (IMF) said the strong recovery in South Asia is expected to take a breather with India's economy expanding at 6.8% in FY23, revised down by 1.4 percentage points since the April 2022 World Economic Outlook, due to a weaker-than-expected recovery in the second quarter and subdued external demand. Investors may remain on sidelines ahead of the Reserve Bank of India's Monetary Policy Committee (MPC) meeting to be held on November 3. The Reserve Bank of India said it would hold a special meeting of its rate-setting committee to prepare a report for the government on why it failed to keep retail inflation below the target of 6 percent for three consecutive quarters since January. Meanwhile, Capital markets regulator SEBI has said block mechanism facility pertaining to demat accounts will not be applicable for clients having arrangements with custodians for clearing and settling trades. Electric Utilities industry stocks will be in focus as the International Energy Agency (IEA) in its World Energy Outlook said India is likely to see the world's biggest rise in energy demand this decade, with demand climbing 3 per cent annually due to urbanisation and industrialisation. There will be some reaction in textile industry stocks as Union minister Piyush Goyal said India's textiles sector aims to hit $100 billion exports in 5-6 years, which would take the industry's combined domestic and international economic value to $250 billion. Outbound shipments from the country's textiles segment stood at around $42 billion in 2021-22.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,736.95

17,666.34

17,795.74

BSE Sensex

59,756.84

59,515.78

59,978.92

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

743.49

104.40

102.75

105.35

ITC

185.58

345.95

343.75

348.25

Power Grid Corporation of India

182.23

224.35

219.51

227.01

NTPC

162.25

170.65

168.30

172.25

ICICI Bank

160.80

924.90

918.86

932.31

 

  • Tata Steel has entered into an agreement with American carmaker Ford to supply zeremis green steel from its Netherlands-based IJmuiden plant after the unit shifts to hydrogen-based steel making. 
  • JSW Steel's subsidiary -- JSW Steel USA has tied-up long-term financing with two Italian banking institutions, Intesa Sanpaolo and Banco BPM, for its Plate Mill modernisation project in Baytown, Texas. 
  • Reliance Industries' subsidiary company -- Reliance Retail is expanding its business into the fast-growing toy sector through its brand Rowan to operate in affordable segment with a smaller shop size. 
  • Mahindra & Mahindra has incorporated wholly owned subsidiary company namely -- Mahindra Electric Automobile on October 25, 2022.
News Analysis