Extending their losing streak for
seventh straight session, Indian barometer gauges ended the F&O expiry
session in red terrain ahead of Reserve Bank of India's (RBI) policy outcome
amid expectations of yet another rate hike of 50 basis points to check high
inflation, in line with similar actions taken by other major central banks,
including the US Fed. Markets started the day on an optimistic note as traders
took encouragement with report that rating agency ICRA retained its India's
previous growth forecast of 7.2 per cent for the current fiscal, citing revival
in contact-intensive services and a pick-up in government and private
expenditure. It said growth is expected to pick up to pre-Covid levels on the
back of pent-up demand. Some support also came with report that Goods and
services tax (GST) collections in September are likely to be about Rs 1.45 trillion,
and the monthly average mop-up in FY23 could be around Rs 1.55 trillion.
However, initial rally get fizzled out and markets started losing gains as
traders turning cautious on report that India's current account deficit (CAD)
is expected to more than double sequentially to over $30 billion in the first
quarter of financial year 2022-23 (Q1FY23) to rise above 3 per cent of gross
domestic product (GDP) from $13.4 billion, or 1.5 per cent of GDP, in the
previous quarter. Selling in second half of the trade mainly played spoil
sports for local bourses and dragged them to end below neutral lines as market
participants were largely remained on sidelines amid a private report stating
that India's central bank is expected to increase its policy rate by half a
point for the third time in a row as the currency's plunge to a record low this
month complicates the battle against inflation. Finally, the BSE Sensex fell
188.32 points or 0.33% to 56,409.96 and the CNX Nifty was down by 40.50 points
or 0.24% to 16,818.10.
The US markets ended deeply in
red on Thursday, with the S&P 500 hitting a fresh low for the year and also
reaching a new closing low, as traders cashed in on yesterday's gains, as the
buying interest generated by the Bank of England's bond market intervention
quickly evaporated. Cautiousness also prevailed in the markets as the Commerce
Department released its third estimate of US economy activity in the second
quarter, showing the decrease in gross domestic product was unrevised from the
previous estimate. The report said real GDP fell by 0.6 percent in the second
quarter, unchanged from the drop reported last month and in line with street
estimates. The dip in GDP in the second quarter follows a 1.6 percent slump in
the first quarter, with the two consecutive decreases signaling the US economy
is in a technical recession. On the sectoral front, airline stocks turned in
some of the market's worst performances on the day, resulting in a 4.4 percent
nosedive by the NYSE Arca Airline Index. The index plummeted to a two-year
closing low. Interest rate-sensitive utilities and commercial real estate
stocks also saw substantial weakness, dragging the Dow Jones Utility Average
and the Dow Jones U.S. Real Estate Index down by 4.1 percent and 3.1 percent,
respectively. Significant weakness was also visible among semiconductor stocks,
with the Philadelphia Semiconductor Index plunging by 3.3 percent to its lowest
closing level in almost two years. Telecom, computer hardware and housing
stocks also showed notable moves to the downside amid broad based weakness on
Wall Street.
Crude oil futures ended lower on
Thursday as the dollar eased off 20-year highs. Concerns about the outlook for
energy demand contributed to the pullback by oil prices amid ongoing worries
about a potential global recession. However, a private report stated that the
Organization of the Petroleum Exporting Countries and its allies, known as
OPEC+, are considering reducing output at a meeting next week helped limit the
downside. Benchmark crude oil futures for November delivery fell $0.92 or about
1.1 percent at $81.23 a barrel on the New York Mercantile Exchange. Brent crude
for November delivery dropped $0.83 or about 0.92 percent to settle at $88.49 a
barrel on London's Intercontinental Exchange.
Indian rupee ended significantly
higher against dollar on Thursday, on persistent selling of the American
currency by exporters. Sentiments got a boost as rating agency Icra retained
its India's previous growth forecast of 7.2 per cent for the current fiscal,
citing revival in contact-intensive services and a pick-up in government and
private expenditure. It said growth is expected to pick up to pre-Covid levels
on the back of pent-up demand. Traders overlooked private report that India's
current account deficit (CAD) is expected to more than double sequentially to
over $30 billion in the first quarter of financial year 2022-23 (Q1FY23) to
rise above 3 per cent of gross domestic product (GDP) from $13.4 billion, or
1.5 per cent of GDP, in the previous quarter. On the global front, Sterling
fell on Thursday after British Prime Minister Liz Truss defended economic plans
that have triggered chaos in the country's markets. Finally, the rupee ended at
81.73 (Provisional), stronger by 20 paisa from its previous close of 81.93 on
Wednesday.
The FIIs as per Thursday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 7709.16 crore against gross selling of Rs 9805.25 crore, while
in the debt segment, the gross purchase was of Rs 1261.31 crore against gross
selling of Rs 1636.85 crore. Besides, in the hybrid segment, the gross buying
was of Rs 3.33 crore against gross selling of Rs 16.22 crore.
The US markets ended lower on
Thursday on worries that the US Federal Reserve's aggressive fight against
inflation could hobble the US economy, and as investors fretted about a rout in
global currency and debt markets. Asian markets are trading in red on Friday
following weakness overnight on Wall Street. Indian markets fell for a seventh
straight session on Thursday as the selloff in the global markets continued.
Today, start of the session is likely to be negative as the Street eyes the
Reserve Bank of India's (RBI) interest rate hike announcement later in the day
coupled with lingering fears of a global recession. The central bank is likely
to raise key repo rate by up to 50 basis points today as it struggles to tame
record inflation. Traders will be concerned as the Reserve Bank of India (RBI)
said India's current account deficit (CAD) in April-June was at $23.9 billion,
or 2.8 per cent of gross domestic product (GDP), much higher than the $13.4 billion,
or 1.5 per cent of GDP, in January-March 2022. Some pessimism will also come as
another data released by RBI showed that India's external debt has risen by 7.1
per cent as it stood at $617.1 billion in June 2022, against $575.3 billion
during the corresponding period of last year. Besides, foreign institutional
investors sold a net Rs 35.99 billion ($441.7 million) worth of equities on
Thursday, as per provisional data available with the National Stock Exchange.
However, some respite may come later in the day as S&P Global Ratings said
rising rates and increased European energy insecurity are hitting growth in
almost every country, but India with an estimated 7.3 per cent growth this
fiscal, would be the star among emerging market economies. Traders may be
taking encouragement as Union Minister Piyush Goyal said India will be the
pillar of the global economic revival as it exhibited steady growth and emerged
as the fastest-growing country among large economies of the world. Besides,
Economic Affairs Secretary Ajay Seth said India's economic recovery remains on
course, supported by key structural reforms, despite exogenous shocks and
challenges. Traders may take note of report that the Centre has reduced its
borrowing target for the financial year 2022-23 (FY23) by Rs 10,000 crore to Rs
14.21 trillion amid robust tax collections. Meanwhile, capital markets
regulator Sebi has allowed Foreign Portfolio Investors (FPIs) to participate in
the exchange-traded commodity derivatives segment, a move that will further
increase depth and liquidity in the market. Auto stocks will be in focus as the
government deferred until October 2023 the implementation of norms mandating
six airbags in all cars, giving the industry a one-year extension. Also,
Moody's Investor Service said robust car sales during the ongoing festive
season amid the easing of chip shortage will help the Indian automobile
industry outshine its regional and global peers this year. There will be some
reaction in gems and jewelry industry stocks as ICRA Ratings expects India's
exports of cut and polished diamonds (CPDs) to taper by 8-10% to $22.0-22.5
billion in FY2023, amid the demand moderation.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
16,818.10
|
16,729.11
|
16,966.56
|
BSE
Sensex
|
56,409.96
|
56,093.96
|
56,946.05
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
608.84
|
96.95
|
96.15
|
98.00
|
Power Grid Corporation
|
275.71
|
207.35
|
204.90
|
210.95
|
Tata Motors
|
207.25
|
404.00
|
397.99
|
411.64
|
Oil & Natural Gas Corporation
|
205.97
|
126.80
|
124.14
|
128.84
|
ITC
|
182.81
|
334.35
|
329.76
|
336.91
|
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