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NSE Intra-day chart (08 May 2023)
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Market Commentary 09 May 2023
Markets likely to get cautious start amid mixed global cues

 

Indian equity benchmarks traded with traction throughout the session and gained more than a percent on Monday boosted by heavy buying in Auto, Realty and Banking stocks amid a rally in global stock markets. Domestic bourses started the week on a buoyant note as traders took some encouragement with Commerce & Industry Minister Piyush Goyal's statement that India-US partnership is at a defining stage and the two countries will continue to work towards diversifying and deepening trade and investment ties for mutual growth and prosperity. He said that the bilateral trade between India and US has been the highest in the couple of years and is aimed to increase multifold in the coming years. Some support also came as data available with the depositories showed Foreign portfolio investors (FPIs) continue to be buyers of Indian equities in May and invested Rs 10,850 crore in the last four trading sessions due to the country's stable macroeconomic environment, robust GST collection and better-than-expected corporate quarterly earnings. This came following a net infusion of Rs 11,630 crore in equities in April and Rs 7,936 crore in March. Markets extended gains in second half of trading session to settle near day's high points, taking support from a private report that India will likely grow at a moderate pace between 6 per cent and 6.5 per cent in FY2023-24 while the global economy continues to struggle. It further noted that growth in the next year will likely pick up as investment kickstarts the virtuous circle of job creation, income, productivity, demand, and exports supported by favourable demographics in the medium term. Some solace came as the Reserve Bank of India said India's foreign exchange reserves jumped $4.532 billion to $588.78 billion for the week ended April 28. The overall reserves had dropped $2.164 billion to $584.248 billion in the previous reporting week. Finally, the BSE Sensex rose 709.96 points or 1.16% to 61,764.25 and the CNX Nifty was up by 195.40 points or 1.08% to 18,264.40.

 

The US markets struggled for direction and ended mostly in green on Monday as traders seemed reluctant to make significant moves ahead to the release of key inflation data later in the week. The reports on consumer and producer price inflation, which are due to be released on Wednesday and Thursday, respectively, could have a significant impact on the outlook for interest rates. Ahead of the data, CME Group's FedWatch Tool is currently indicating an 88.0 percent chance the Federal Reserve will leave interest rates unchanged at its next meeting in June. Fed Chair Jerome Powell said following last week's rate hike that the central bank would take a data-dependent approach to future monetary policy decisions. On the economic data front, the Commerce Department released a report showing U.S. wholesale inventories were unexpectedly unchanged in the month of March. The report said wholesale inventories were virtually unchanged in March, while revised data showed inventories were also unchanged in February. Street had expected wholesale inventories to inch up by 0.1 percent, matching the uptick originally reported for the previous month. On the sectoral front, most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets. Telecom stocks showed a notable move to the downside, however, with the NYSE Arca North American Telecom Index falling by 1.1 percent to its lowest closing level in over a month. Weakness was also visible among tobacco stocks, as reflected by the 1.1 percent drop by the NYSE Arca Tobacco Index.

 

Crude oil futures ended higher on Monday as outlook for the energy demand remains optimistic due to last week's fairly encouraging non-farm payrolls data. Data from the Labor Department on Friday showed the U.S. economy added 253,000 jobs in April compared with 165,000 jobs in March. Economists had expected an addition of 180,000 jobs in April. The unemployment rate in the U.S. dropped to 3.4% from 3.5%. Economists had expected the rate to rise to 3.6%. China is likely to release the trade data on May 09. This will give an insight into the commodity imports by China during April. Benchmark crude oil futures for June delivery rose $1.82 or about 2.6 percent to settle at $73.16 a barrel on the New York Mercantile Exchange. Brent crude for July delivery added $1.71 or about 2.3 percent to settle at $77.01 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended lower against dollar on Monday despite firm trade in domestic markets. Traders ignored Reserve Bank of India's statement that India's foreign exchange reserves jumped $4.532 billion to $588.78 billion for the week ended April 28. The overall reserves had dropped $2.164 billion to $584.248 billion in the previous reporting week. Besides, the depositories showed foreign portfolio investors (FPIs) continue to be buyers of Indian equities in May and invested Rs 10,850 crore in the last four trading sessions due to the country's stable macroeconomic environment, robust GST collection and better-than-expected corporate quarterly earnings. This came following a net infusion of Rs 11,630 crore in equities in April and Rs 7,936 crore in March. On the global front, the ringgit trimmed last week's gains to end marginally lower against the US dollar on Monday on a lack of catalysts amid a slightly firmer greenback. Finally, the rupee ended at 81.80 (Provisional), weaker by 2 paise from its previous close of 81.78 on Thursday.

 

The FIIs as per Monday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 16826.30 crore against gross selling of Rs 12973.69 crore, while in the debt segment, the gross purchase was of Rs 995.89 crore against gross selling of Rs 224.34 crore. Besides, in the hybrid segment, the gross buying was of Rs 32.22 crore against gross selling of Rs 180.88 crore.

 

The US markets ended mostly in green on Monday as investors readied for key inflation reports due later in the week. Asian markets are trading mostly in red on Tuesday ahead of China's April trade data release as well as US inflation reports later this week. Indian markets ended higher on Monday as investors indulged in strong buying at several counters across various sectors. Today, markets are likely to get cautious start amid mixed global cues and a sharp rebound in crude oil prices. However, traders may take some encouragement as Fitch Ratings affirmed India's sovereign rating with a stable outlook saying the country has a robust growth outlook and resilient external finances. Fitch Ratings has affirmed India's Long-Term Foreign-Currency Issuer Default Rating (IDR) at BBB- with a Stable Outlook, and added that strong growth potential is a key supporting factor for the sovereign rating. Foreign fund inflows likely to aid sentiments. Foreign institutional investors (FII) bought shares worth Rs 2,123.76 crore on May 8, provisional data from the National Stock Exchange showed. Some support will come as Economic Affairs Secretary Ajay Seth said Indian financial system is well protected and regulated despite the daunting global financial situation. Seth said The Indian financial sector is well protected, well regulated but at the same time, we have to be cautious and be on our toes as soon as early warning indicators are there. Besides, central bank data showed that the Reserve Bank's gold reserves increased by 34.22 tonne year-on-year to reach 794.64 tonne at March-end 2023. The Reserve Bank held 760.42 metric tonnes of gold (including gold deposits of 11.08 metric tonnes) at the March-end of 2022. Traders may take note of report that traders' body CAIT made a case for lowering the GST rate on beverages from 28 per cent, which comes to 40 per cent after inclusion of cess, arguing that it blocks the working capital of small retailers. Investors await more of financial results from India Inc for domestic cues, with broader market names like Lupin, SRF, Apollo Tyres, Raymond, Godrej Agrovet due to post its earnings later in the day. The Street will also track Mankind Pharma's market debut on Tuesday. The stock can list up to 10 per cent higher over the issue price of Rs 1,080, as per ipowatch.com. in the primary market, the Rs 3,200 crore IPO of Nexus Select Trust Real Estate Investment Trust (REIT) will open today and close on Thursday. The price band for the issue is fixed at Rs 95-100 per share.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

18,264.40

18,147.49

18,334.14

BSE Sensex

61,764.25

61,335.49

62,023.59

 

Nifty Top volumes

 

Stock

 

Volume

Previous close (Rs)

Support (Rs)

Resistance (Rs)

(in Lacs)

Tata Motors

235.15

500.55

485.00

509.20

Tata Steel

231.30

109.75

108.71

110.31

ICICI Bank

186.24

937.85

929.34

944.04

HDFC Bank

186.22

1646.75

1634.39

1654.74

State Bank of India

129.91

584.60

578.76

589.01

 

  • UPL has reported 37.75% fall in its consolidated net profit at Rs 1080 crore for Q4FY23 as compared to Rs 1735 crore for the same quarter in the previous year.
  • Bharti Airtel is planning to offer content from ALTT and FanCode to its subscribers. 
  • Coal India has reported fall of 17.68% in its consolidated net profit at Rs 5527.62 crore for Q4FY23 as compared to Rs 6715.00 crore for the same quarter in the previous year. 
  • Sun Pharmaceutical Industries is recalling pre-filled syringes of a drug, used to treat infertility in women, in the US market due to a manufacturing issue.
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