Indian equity
benchmarks closed lower for a fourth straight session on Thursday as new Delta
and Delta plus variants of novel coronavirus push Covid-19 cases higher across
the globe. Markets made slightly positive start as traders took some support
with Principal Economic Adviser (PEA) Sanjeev Sanyal's statement that the
Indian economy is likely to witness close to double-digit growth in the current
fiscal year despite the second Covid-19 wave ravaging the country. Some support
came as data released by the RBI showed India reported a current account
surplus of 0.9 percent of GDP in the pandemic-hit FY21, as against a deficit of
0.9 percent in FY20. However, key indices erased gains and turned lower in
morning deals as Indian manufacturing activity fell back into decline in the
month of June, as the intensification of the pandemic and strict containment
measures negatively impacted on demand. As per the survey report, the Nikkei
India Manufacturing Purchasing Managers' Index (PMI) - a composite
single-figure indicator of manufacturing performance - fell to 48.1 in June as
against 50.8 in May. Markets continued to show choppy movement with negative
bias, as India's external debt surged by $11.5 billion year-on-year to $570
billion as of March-end 2021, according to the Reserve Bank of India data. The
external debt to GDP ratio rose to 21.1 per cent as of March-end 2021 from 20.6
per cent a year ago. Some concern also came with the rating agency -- Standard
and Poor's (S&P) has said Indian banks face systemic risks as the country
wades through the aftermath of the Covid-19 second wave. The banking sector's
weak loans are likely to remain elevated at 11-12 per cent of gross loans in
the next 12-18 months. Traders also took note of Principal Economic Advisor
Sanjeev Sanyal's statement that India's economy is on the mend after the
pandemic-induced shocks but it may take an additional year or so to achieve the
$5 trillion-mark. Meanwhile, India's fiscal deficit in April-May stood at 8.2
per cent of the budget estimates (BE), as compared to 59 per cent in the same
period last year. The deficit was less 30 per cent less of last-year's level of
Rs. 4.7 trillion amid the nationwide lockdown to contain the coronavirus.
Finally, the BSE Sensex fell 164.11 points or 0.31% to 52,318.60, while the CNX
Nifty was down by 41.50 points or 0.26% to 15,680.00.
The US markets ended higher on
Thursday ahead of the release of the Labor Department's closely watched monthly
employment report on Friday. Street currently expect the report to show
employment jumped by 690,000 jobs in June after surging up by 559,000 jobs in
May. The unemployment rate is expected to dip to 5.7 percent from 5.8 percent.
A day ahead of the release of the monthly jobs report, the Labor Department
released a report showing first-time claims for US unemployment benefits fell
by more than expected in the week ended June 26th. The report said initial
jobless claims slid to 364,000, a decrease of 51,000 from the previous week's
revised level of 415,000. Street had expected jobless claims to dip to 393,000
from the 411,000 originally reported for the previous week. Meanwhile, a
separate report released by the Institute for Supply Management (ISM) showed a
modest slowdown in the pace of growth in US manufacturing activity in the month
of June. The ISM said its manufacturing PMI slipped to 60.6 in June from 61.2
in May, although a reading above 50 still indicates growth in the manufacturing
sector. Street had expected the index to edge down to 61.0. On sectoral front, significant
strength emerged among airline stocks, as reflected by the 1.4 percent gain
posted by the NYSE Arca Airline Index. Housing stocks also turned in a strong
performance on the day, resulting in a 1.2 percent advance by the Philadelphia
Housing Sector Index.
Crude oil futures ended sharply
higher on Thursday amid optimism about the strong outlook for energy demand.
Despite concerns that oil demand could falter in the near term due to the surge
in the delta variant of the coronavirus cases and travel curbs in several
countries, Street expects demand to pick up during the later part of the year.
Further, the advance came ahead of a meeting among Organization of the
Petroleum Exporting Countries (OPEC) and non-OPEC partners, an energy alliance
often referred to as OPEC+, who have been positive about improved market
conditions and the outlook for fuel demand growth following a sharp rebound in
oil prices this year. OPEC+ meeting has been postponed to Friday. Crude oil
futures for August rose $1.76 or about 2.4 percent to settle at $75.23 barrel
on the New York Mercantile Exchange. September Brent crude surged $1.50 or 2
percent to settle at $76.10 a barrel on London's Intercontinental Exchange.
Indian rupee ended considerably
lower against dollar on Thursday on emergence of demand for the greenback from
importers. Traders were worried as India's manufacturing sector activities
contracted for the first time in 11 months in June as rise in coronavirus cases
and strict containment measures adversely impacted demand as well as resulted
in job losses. The seasonally-adjusted IHS Markit India Manufacturing
Purchasing Managers' Index (PMI) declined to 48.1 in June from 50.8 in May.
Some anxiety also came as India's external debt surged by $11.5 billion
year-on-year to $570 billion as of March-end 2021, according to the Reserve
Bank of India. The external debt to GDP ratio rose to 21.1 per cent as of
March-end 2021 from 20.6 per cent a year ago. On the global front, sterling
fell on Thursday after Bank of England Governor Andrew Bailey warned against
over-reaction to rising inflation in Britain. Finally, the rupee ended 74.55,
weaker by 22 paise from its previous close of 74.32 on Wednesday.
The FIIs as per Thursday's data
were net seller in both equity and debt segment. In equity segment, the gross
buying was of Rs 6287.00 crore against gross selling of Rs 7407.02 crore, while
in the debt segment, the gross purchase was of Rs 343.73 crore with gross sales
of Rs 366.49 crore. Besides, in the hybrid segment, the gross buying was of Rs
16.27 crore against gross selling of Rs 7.59 crore.
The US markets ended higher on
Thursday as a new quarter and the second half of the year began with upbeat
economic data and a broad-based rally. Asian markets are trading mostly in
green on Friday as investors look ahead to a closely-watched US jobs report set
to be released later. Indian markets closed in the red for the fourth
consecutive day on Thursday, as micro data weighed on sentiment coupled with
losses in energy, IT and financial stocks. Today, the start of session is
likely to slightly positive tracking gains in global markets. Investors will
continue to watch out for the OPEC+ meet outcome that was delayed to today
after the United Arab Emirates blocked a plan for an immediate reduction in
supply cuts. Some support will come as the India Meteorological Department
(IMD) said Southwest Monsoon over the country is likely to be normal in July.
In the forecast for July, IMD Director General Mrutunjay Mohapatra said
rainfall is not expected to be good in the first week, but it is likely to pick
up in the second half of the second week of July. Traders may take note of
report that former Union agriculture minister Sharad Pawar said agricultural
universities are essential for strengthening the country's economy. However,
traders may be concerned as India recorded 43,360 infections and 796 fatalities
in the last 24 hours. The total coronavirus caseload stands at 30,453,937,
while Covid-19 deaths in India have crossed 400,000. In just over five weeks,
from May 23 to July 1, the country reported 100,000 deaths from Covid even as
the second wave waned. The World Health Organization has said the Delta variant
of Covid-19 is now present in nearly 100 countries as per conservative
estimates, and warned that in the coming months the highly transmissible strain
will become the dominant variant of the coronavirus globally. There may be some
cautiousness as Reserve Bank Governor Shaktikanta Das said the second wave of
the pandemic took a grievous toll on India, but the dented economic activity
has started recovering from late-May. In a first, Das flagged the rising data
breaches and cyber-attacks as a risk facing the economy, along with others like
firming global commodity prices. There will be some reaction in banking stocks
as the Financial Stability Report of Reserve Bank of India showed banks did not
see their bad loan position worsening during the pandemic year of 2020-21 as
the gross non-performing asset (GNPA) ratio stayed stable at 7.48% of the gross
advances at the end of March 31. It added that The GNPA ratio of banks may rise
to 9.8-11.22 percent by March 2022 under various stress scenarios due to the
impact of the COVID pandemic. Auto stocks will be in focus as major automakers,
including Maruti Suzuki, Hyundai, Tata Motors, Mahindra & Mahindra, Kia,
Toyota and Honda, reported healthy growth in passenger vehicles sales in June,
recovering from the disruptions induced by the second wave of COVID-19. There
will be some buzz in power sector stocks with power ministry data showing that
power consumption in the country grew by nearly 10 per cent in June to 115.39
billion units (BU) compared to a year ago, but is still lower than the
pre-COVID level.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,680.00
|
15,646.19
|
15,734.69
|
BSE
Sensex
|
52,318.60
|
52,186.90
|
52,544.39
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
279.44
|
344.25
|
341.16
|
347.36
|
State Bank of India
|
161.61
|
420.40
|
417.14
|
423.69
|
Oil & Natural Gas Corporation
|
160.12
|
118.85
|
117.51
|
119.96
|
NTPC
|
124.79
|
117.35
|
116.10
|
118.20
|
ICICI Bank
|
105.17
|
630.85
|
628.14
|
635.49
|
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Bharti Airtel has further upgraded its high speed data network in Andhra Pradesh and Telangana to deliver the best network experience to its customers.
Tech Mahindra has entered into a partnership with TAC Security, the global leader of risk & vulnerability management, to enable next-generation enterprise security for customers globally.