Indian equity
benchmarks erased all the intraday gains and ended in the negative zone on
Tuesday, amid a fag-end sell-off in IT, TECK and Metal shares. That apart,
profit booking by investors ahead of the US Federal Reserve policy meeting
outcome, coupled with weekly expiry of the Bank Nifty F&O contracts
dampened sentiment. Benchmark indices made a positive opening and extended
gains as the day progressed as sentiments got a boost with economic think tank
National Council of Applied Economic Research (NCAER) stating that the Indian
economy has continued to do well in the last two months and forecast of an
above-normal monsoon augurs well for the immediate future. NCAER said a range
of high-frequency indicators reveal the resilience of the domestic economy with
the Purchasing Managers' Index (PMI) for manufacturing at a 16-year high and
UPI, the leading digital payments system, touching the highest volume since its
inception in 2016. Some support also came with exchange data showing that
Foreign Institutional Investors (FIIs) turned buyers on Monday after continuous
offloading. They bought equities worth Rs 169.09 crore. Sentiments remained
up-beat in afternoon deals, taking support from a private report stating that
India's services exports will increase to $800 billion by 2030 from $340
billion in 2023, making the external sector resilient to supply-side shocks and
reducing rupee volatility. It said India's foreign trade policy announced last
year targeted $1 trillion of service exports by 2030. Traders got support as
the government is looking at ways to improve the competitiveness of exports
amid mounting geopolitical tensions and has begun examining the export credit
landscape. The commerce and industry ministry has sought details on exporters'
financial needs, challenges faced in accessing export credit and the ways to
improve it. However, a sharp reversal in the last hour of trade dragged the
indices lower to settle the session in red. Traders turned cautious as Crisil
in its report stated that India Inc is likely to log 4-6 per cent revenue
growth in the January-March quarter of 2023-24, marking the slowest quarterly
growth since recovery from the Covid-19 pandemic which began in September 2021.
Finally, the BSE Sensex fell 188.50 points or 0.25% to 74,482.78 and the CNX
Nifty was down by 38.55 points or 0.17% points to 22,604.85.
The US markets ended mostly in
red on Wednesday following the Federal Reserve's monetary policy announcement.
The Federal Reserve announced its widely expected decision to leave interest
rates unchanged. Citing a lack of further progress toward its 2 percent
inflation objective in recent months, the Fed said it decided to maintain the
target range for the federal funds rate at 5.25 to 5.50 percent. Members of the
Fed also reiterated they need greater confidence inflation is moving
sustainably toward 2 percent before they consider cutting interest rates.
Meanwhile, the Fed said it would continue reducing its holdings of Treasury
securities and agency debt and agency mortgage-backed securities but revealed
plans to slow the pace of decline. The central bank said would slow the pace of
decline of its securities holdings by reducing the monthly redemption cap on
Treasury securities from $60 billion to $25 billion. The monthly redemption cap
on agency debt and agency mortgage-backed securities will be maintained at $35
billion, and the Fed will reinvest any principal payments in excess of this cap
into Treasury securities. The Fed's next monetary policy meeting is scheduled
for June 11-12, with the central bank likely to leave rates unchanged once
again. On the economic data front, payroll processor ADP released a report
showing private sector employment increased by more than expected in the month
of April. ADP said private sector employment shot up by 192,000 jobs in April
after jumping by an upwardly revised 208,000 jobs in March. Street had expected
private sector employment to climb by 175,000 jobs compared to the addition of
184,000 jobs originally reported for the previous month.
Crude oil futures ended deeply in
red on Wednesday after data showed an unexpected sharp jump in U.S. crude
inventories in the week ended April 26th. Data released by the Energy
Information Administration (EIA) showed crude oil inventories jumped by 7.3
million barrels last week after tumbling by 6.4 million barrels in the previous
week. Street had expected crude oil inventories to decrease by 2.3 million
barrels. Besides, the ongoing efforts to reach a cease-fire agreement between
Israel and Hamas weighed as well on oil prices. Benchmark crude oil futures for
June delivery fell $2.93 or 3.6% to settle at $79 a barrel on the New York
Mercantile Exchange. Brent crude for July delivery dropped $2.89 or 3.4% to
$83.44 per barrel on London's Intercontinental Exchange.
Indian rupee ended higher against
the U.S. dollar on Tuesday amid foreign capital inflows. Traders got support
amid a private report stating that India's services exports will increase to
$800 billion by 2030 from $340 billion in 2023, making the external sector
resilient to supply-side shocks and reducing rupee volatility. It said India's
foreign trade policy announced last year targeted $1 trillion of service
exports by 2030. Besides, National Council of Applied Economic Research (NCAER)
in its monthly economic review said that the Indian economy could grow faster
than 7% in this financial year. On the global front, the yen dropped against
the dollar on Tuesday, giving up some of its sharp gains the previous day
sparked by suspected intervention by Japanese authorities. Finally, the rupee
ended at 83.42 (Provisional), stronger by 3 paise from its previous close of
83.45 on Monday.
The FIIs as per Tuesday's data
were net buyers in equity segment, while they were net sellers in debt segment.
In equity segment, the gross buying was of Rs 13838.91 crore against gross
selling of Rs 13833.38 crore, while in the debt segment, the gross purchase was
of Rs 794.69 crore with gross sales of Rs 1198.22 crore. Besides, in the hybrid
segment, the gross buying was of Rs 2.54 crore against gross selling of Rs
10.99 crore.
The US markets ended mostly in
red on Wednesday after the Federal Reserve left its key interest rate
unchanged, as expected, and indicated that while its next move will likely be a
rate cut, continued progress on inflation is not assured. Asian markets are
trading mixed on Thursday after Japan's factory activity shrank at a slower
pace in April as declines in output and new orders eased, a private-sector
survey showed. Indian markets wiped out early gains and ended lower on Tuesday
due to fag-end selling pressure weighed by metal and IT shares. Investors also
remained cautious ahead of the US Federal Reserve policy meeting outcome.
Equity markets remained closed on Wednesday on account of Maharashtra Day.
Today, markets are likely to get positive start amid mixed global cues.
Sentiments will get boost as India's Goods and Services Tax (GST) collections
in gross terms hit a record high in April 2024 at Rs 2.1 lakh crore. Finance
ministry said this represents a 12.4 percent year-on-year growth, driven by a
strong increase in domestic transactions (up 13.4 percent) and imports (up 8.3
percent). The government had collected Rs 1.87 lakh crore as GST in the same
period last year. Some optimism will come as Finance Minister Nirmala Sitharaman
said GST collection breached the Rs 2 lakh crore milestone on the back of
strong economic momentum and efficient tax realisation. Investors will be
eyeing manufacturing PMI data to be out later in the day. However, upside may
remain capped as foreign portfolio investors (FPIs) have turned net sellers in
Indian stocks in April, after remaining net buyers in the two preceding months,
as the ongoing geopolitical crisis in the Middle East coupled with strength US
bond yield likely pushed investors to take money off their portfolios. There
may be some cautiousness as data released by the Ministry of Commerce and
Industry showed that India's eight core sectors posted a growth of 5.2 percent
in March. The growth in India's core sector during the previous month was
slower compared to February 2024, which came in at 7.1 percent, it was higher
than March 2023 at 4.2 percent. There will be some buzz in oil & gas sector
stocks as the government said India has cut its windfall tax on petroleum crude
to 8,400 Indian rupees ($100.66) a metric ton from 9,600 rupees with effect
from May 1. Sugar stocks will be in focus with report that India's sugar
production has been higher than expected this year after the completion of cane
crushing at most of its mills, with a late pick-up in rains raising output.
There will be some reaction in power stocks with the government data showing
that India's power consumption rose around 11 per cent to 144.25 billion units
(BU) in April as compared to the year-ago period, mainly due increase in
temperatures. Auto stocks will be in limelight reacting to their monthly sales
numbers. As per a private report, domestic passenger vehicle sales in April
rose by only 1.76 per cent year-on-year (YoY) to 338,341 units, impacted by a
high base effect, the ongoing general elections and low demand for small cars.
Traders will keep close eye on earnings of India Inc.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
22,604.85
|
22,521.05
|
22,736.00
|
BSE
Sensex
|
74,482.78
|
74,182.33
|
74,947.32
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Steel
|
550.43
|
164.75
|
163.36
|
167.26
|
Power
Grid
|
332.89
|
301.85
|
295.15
|
306.45
|
ICICI
Bank
|
295.68
|
1150.25
|
1141.49
|
1164.29
|
SBIN
|
274.49
|
821.00
|
815.65
|
830.60
|
HDFC
Bank
|
261.54
|
1515.45
|
1507.06
|
1531.66
|
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