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NSE Intra-day chart (28 October 2022)
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Market Commentary 31 October 2022
Benchmarks to make gap-up opening on positive global cues

 

Indian equity benchmarks managed to end in green on Friday, helped by buying in index major Maruti Suzuki, Reliance Industries and NTPC. Key gauges made positive start and stayed in green for most part of the day, as buying in FIIs aided 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. Traders took some support 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. Some support also came with another private report that India can accelerate green investments to $12.1 trillion by 2050 and reap a host of benefits. However, key gauges erased most of their gains in late afternoon deals, as some concern came with the International Monetary Fund (IMF) stating that 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. But, markets recovered to settle in green, taking support from Prime Minister Narendra Modi stating that he and his British counterpart agreed on the importance of early conclusion of a comprehensive and balanced free trade agreement (FTA). Meanwhile, Investors awaited 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. Finally, the BSE Sensex rose 203.01 points or 0.34% to 59,959.85 and the CNX Nifty was up by 49.85 points or 0.28% to 17,786.80.

 

The US markets ended significantly higher on Friday with the Dow reaching a two-month closing high. Positive reaction on quarterly earnings reports supported the rally on Wall Street. Traders reacted positively to earnings news, with semiconductor giant Intel (INTC) soaring despite lowering its full-year guidance. Intel reported third quarter results that beat street estimates. Shares of Apple (AAPL) also moved sharply higher after the tech giant reported better than expected fiscal fourth quarter earnings but forecast slower revenue growth in the current quarter. Energy giant Exxon Mobil (XOM) also moved to the upside after reporting record profits in the third quarter due to higher energy prices. However, shares of Amazon (AMZN) plunged by 9.7 percent. Amazon came under pressure after reporting mixed third quarter results and providing disappointing fourth quarter revenue guidance. The Commerce Department's inflation gauge, known as the personal consumption expenditures index, rose 5.1% in September, not including food and energy prices, against an expected 5.2% gain over the same month last year. For the month, core PCE rose 0.5%. That comes hand in hand with data on personal income and spending that showed consumers continued to spend at a rate that outpaced the rise in prices. Personal spending rose 0.6% for the month, faster than the price of the average shopping basket. The price index for personal consumer expenditures rose 0.3%. Personal income rose 0.4% in the month. The PCE reading could ease investor fears that the Federal Reserve will continue on its aggressive interest rate hike path. There are expectations that the Fed, which is expected to raise rates another 0.75 percentage point next week, could start to ease off that pace when it next meets in December.

 

Crude oil futures settled lower on Friday amid worries about the outlook for energy demand due to increased Covid-19 restrictions in parts of China. Following the surge in cases, fresh lockdowns have been imposed in several cities in China, maintaining the country's Covid Zero policy that has contributed to the reduction of economic activity in the world's largest importer of crude. Traders also look ahead to the update from the Organization of the Petroleum Exporting Countries (OPEC) about its long-time oil demand forecasts, due on Monday. Meanwhile, a report from Baker Hughes showed the number of total active drilling rigs in the United States fell 3 this week. Benchmark crude oil futures for December delivery fell $1.18 or 1.3 percent at $87.90 a barrel on the New York Mercantile Exchange. Brent crude for January delivery declined $1.27 or about 1.3 percent to settle at $93.77 (Provisional) a barrel on London's Intercontinental Exchange. 

 

Indian rupee concluded weaker against dollar on Friday on account of continued dollar demand from importers and banks. Sentiments got hit after International Monetary Fund (IMF) stated that 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. On the global front, the yen weakened on Friday as the Bank of Japan stuck to its dovish stance, while the dollar was trying to rebound across the board from losses early in the week on expectations the Federal Reserve will hint at slowing its aggressive pace of rate hikes. Finally, the rupee ended at 82.48 (Provisional), weaker by 15 paisa from its previous close of 82.33 on Thursday.

 

The FIIs as per Friday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 14610.50 crore against gross selling of Rs 11111.59 crore, while in the debt segment, the gross purchase was of Rs 577.46 crore against gross selling of Rs 199.54 crore. Besides, in the hybrid segment, the gross buying was of Rs 8.67 crore against gross selling of Rs 29.59 crore.

 

The US markets closed higher on Friday amid hopes of slower rate hikes and healthy corporate earnings. Asian markets are trading mostly in green on Monday as markets look ahead to the US Fed meeting later this week. Indian markets ended higher on Friday for the second day, helped by buying in index major Reliance Industries, along with fresh foreign fund inflows. Today, markets are likely to get gap-up opening amid strong global cues and steady foreign inflows. Traders will be taking encouragement as Union Minister for Commerce and Industry Piyush Goyal said that foreign trade would become a truly defining feature that would help India become a $30 trillion economy in the Amrit Kaal. Some support will also come with a private report that India is expected to surpass its tax collection goal by more than Rs 2 lakh crore ($24.3 billion) in the current fiscal year. Traders may take note of report that after withdrawing over Rs 7,600 crore last month, foreign investors have slowed down the pace of equity selling in India in October so far, as they pulled out Rs 1,586 crore from capital markets. Also, foreign institutional investors (FIIs) net bought shares worth Rs 1,568.75 crore on 28 October, according to the provisional data available on the NSE. However, traders may be concerned as data released by Reserve Bank of India showed India's foreign exchange (forex) reserves declined $3.8 billion to $524.5 billion for the week ending October 21. Reserves are at their lowest levels since July 2020. Since last year, reserves have declined by $115 billion. Sugar stocks will be in focus as the government extended restrictions on sugar exports till October 31 next year, a move aimed at increasing availability of the commodity in the domestic market. Earlier, the restrictions were imposed till October 31 this year. Restriction on export of sugar (raw, refined, and white sugar) is extended beyond October 31, 2022 till October 31, 2023, or until further orders, whichever is earlier. Other conditions will remain unchanged. There will be some reaction in oil & gas industry stocks as the government data showed India's crude oil imports in September fell to 16.46 million tonnes, down 6.7% from a month ago. Data from the website of the Petroleum Planning and Analysis Cell showed on a yearly basis, imports dipped by 5.8%. Besides, investors await more of financial results from India Inc for domestic cues, with Bharti Airtel, Larsen & Toubro and Tata Steel due to post their earnings later in the day. Meanwhile, DCX Systems will float its maiden IPO on October 31. The issue will remain open for subscription till November 02 (Wednesday). The price band for the offer has been fixed between Rs 197-207 per equity share of face value Rs 2 each. The company plans to raise Rs 500 crore through this public issue.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,786.80

17,727.36

17,842.56

BSE Sensex

59,959.85

59,754.87

60,148.99

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

510.06

101.60

100.06

103.86

Oil & Natural Gas Corporation

229.18

133.70

131.80

135.60

NTPC

161.85

174.05

171.06

175.86

Coal India

140.76

244.40

240.70

247.95

ITC

130.69

345.80

344.40

347.90

 

  • NTPC has reported fall of 7.40% in its consolidated net profit at Rs 3417.67 crore for Q2FY23 as compared to Rs 3690.95 crore for Q2FY22.
  • Reliance Industries' wholly owned subsidiary -- Reliance Strategic Business Ventures has invested an amount of USD 15 million in its subsidiary, SkyTran Inc.
  • ITC has acquired 1000 Compulsorily Convertible Preference Shares of Rs 10 each of Mother Sparsh Baby Care. 
  • Electric vehicle charging infrastructure firm CHARGE+ZONE and Mahindra & Mahindra have entered into partnership to set up a charging network for the latter's electric SUVs.
News Analysis