Indian equity
benchmarks closed on a flat note after a volatile trade on Friday amid a
largely negative trend in global stocks. Markets made positive start, as
traders took some support with the Confederation of Indian Industry (CII) urged
the government to provide a fiscal stimulus worth Rs 3 trillion along with
direct cash transfers to perk up domestic demand. The industry body also sought
expansion in the Reserve Bank of India (RBI) balance sheet to meet the demand
exigencies of the pandemic. Also, India maintained 43rd rank on an annual World
Competitiveness Index compiled by the Institute for Management Development
(IMD) that examined the impact of COVID-19 on economies around the world this year.
However, key indices soon erased initial gains and slipped over half a percent
in morning trades, as sentiments turned pessimistic with a private report
stated that lockdowns imposed by the states in April and May to contain the
second wave of the deadly COVID-19 pandemic has likely led to the economy
contracting 12 per cent in the June quarter as against 23.9 per cent
contraction in the same quarter in 2020. Markets remained weak in late
afternoon deals, as assessment made by the Reserve Bank stating that the
devastating second wave of the coronavirus pandemic in April-May is estimated
to have cost the nation Rs 2 lakh crore in terms of output. It also said the
second wave's toll is mainly in terms of the hit to domestic demand on account
of regional and specific containment rather than a nation-wide lockdown. But
markets recovered lost ground in fag end of a trading session as buying emerge
in Telecom and FMCG stocks. Traders took note of report that Union Minister of
State for Labour & Employment (Independent Charge) Santosh Gangwar has said
that India is committed to improve employment outcomes for all youth in India,
including women and vulnerable section of the people, through an enduring,
long-term commitment for better opportunities. He said that the government is
making all-out efforts to improve the bridge between education and employment,
and to prepare young people for the future of work. Finally, the BSE Sensex
rose 21.12 points or 0.04% to 52,344.45, while the CNX Nifty was down by 8.05
points or 0.05% to 15,683.35.
The US markets ended sharply
lower on Friday amid concerns about the outlook for monetary policy continued
to weigh on the markets following the Federal Reserve's announcement on
Wednesday. The Fed's forecast for two interest rates hikes in 2023 has led to
speculation that the central bank will soon start tapering its asset purchases.
Fed Chair Jerome Powell said the central bank would provide advance notice
before making any changes to its asset purchases, but traders remain on edge
about stocks losing a key layer of support. The Dow extended a recent
downtrend, which saw the blue chip index close lower for the fifth straight
sessions and eight out of the past ten. However, overall trading activity was
somewhat subdued with a lack of major US economic data keeping some traders on
the sidelines. Brokerage stocks moved sharply lower over the course of the
session, dragging the NYSE Arca Broker/Dealer Index down by 2.7 percent to its
lowest closing level in a month. Substantial weakness was also visible among
oil stocks, reflected by the 2.8 percent slump by the NYSE Arca Oil Index. The
weakness in the oil sector came despite a rebound by the price of crude oil.
Natural gas, gold and networking stocks also saw considerable weakness on the
day, moving lower along with most of the other major sectors.
Crude oil futures ended higher on
Friday amid optimism about energy demand in the US thanks to reopening of
businesses after Covid-19 lockdowns. However, oil's upside was limited due to
concerns about outlook for energy demand in Europe following reports showing
coronavirus cases rose to four-month highs. According to a report from Baker
Hughes, US energy firms added oil and natural gas rigs for a second week in a
row, with surging oil prices prompting some drillers to return to the wellpad.
The report showed oil and gas rig count rose by nine to 470 this week, the
highest since April 2020. The total rig count rose by 204, up 77% over this
time last year. Crude oil futures for July gained $0.60 or 0.8 percent to
settle at $71.64 barrel on the New York Mercantile Exchange. August Brent crude
rose 43 cents or 0.6 percent to settle at $73.51 a barrel on London's
Intercontinental Exchange.
Erasing previous session
drubbing, Indian rupee ended stronger significantly against dollar on Friday,
owing to dollar sale by exporters and banks. Traders took encouragement as the
CII urged the government to provide a fiscal stimulus worth Rs 3 trillion along
with direct cash transfers to perk up domestic demand. Traders ignored report
that RBI has revealed that the devastating second wave of the coronavirus
pandemic in April-May is estimated to have cost the nation Rs 2 lakh crore in
terms of output. On the global front, dollar was headed for its best week in
nearly nine months on Friday, with rival currencies struggling to shake the
pressure exerted by the Federal Reserve's sudden hawkish shift in tone.
Finally, the rupee ended 73.86, stronger by 22 paise from its previous close of
74.08 on Thursday.
The FIIs as per Friday's data
were net seller in both equity and debt segment. In equity segment, the gross
buying was of Rs 6766.95 crore against gross selling of Rs 7680.66 crore, while
in the debt segment, the gross purchase was of Rs 403.81 crore with gross sales
of Rs 530.25 crore. Besides, in the hybrid segment, the gross buying was of Rs
3.58 crore against gross selling of Rs 10.74 crore.
The US markets ended lower on
Friday with investors wary of a more hawkish stance from the US Federal
Reserve, while the dollar posted the strongest gains in over a year and oil
prices continued a steady climb. Asian markets are trading mostly in red on
Monday as Japan's markets plummeted in the morning. Indian markets recovered from
the day's losses to end flat on Friday. Today, the markets are likely to make
gap-down opening amid sell-off in the global markets. There will be some
cautiousness as Care Ratings said the credit growth for FY22 is likely to
remain in low double-digit on the back of muted economic activity. However,
downside may remain capped as India's fresh Covid cases have stayed below 1
lakh for the last 14 days while on Sunday, the country reported 58,419 fresh
cases, the lowest in 81 days. Some support may come as Chief Economic Advisor
(CEA) K V Subramanian said the government is open to coming out with more
measures to boost the economy which has been hit by the second wave of the
coronavirus pandemic. Also, Reserve Bank Governor Shaktikanta Das has pitched
for policy support from all sides -- fiscal, monetary and sectoral -- to
nurture recovery of the economy hit by the second wave of the coronavirus
pandemic. Meanwhile, the Finance Industry Development Council (FIDC) has urged
the Ministry of Micro, Small & Medium Enterprises (MSME) to address issues
faced by MSME borrowers and the NBFCs catering to these enterprises. Besides,
foreign portfolio investors (FPIs) pumped in a net Rs 13,667 crore so far in
June as Indian markets continued to remain attractive to overseas investors.
There will be some buzz in oil & gas sector stocks as the commerce and
industry ministry floated a draft cabinet note seeking inter-ministerial views
on a proposal to allow up to 100 percent foreign investment under automatic
route in oil and gas PSUs, which have an 'in-principle' approval for
disinvestment. Telecom stocks will be in focus reacting to their subscribers'
data. Reliance Jio added 79.18 lakh wireless subscribers, Bharti Airtel added
40.5 lakh users and Vodafone Idea gained 10.8 lakh customers during March.
There will be some buzz in insurance industry stocks with investment
information firm ICRA's statement that the general insurance industry is
expected to clock 7 to 9 per cent growth in gross direct premium income during
FY22. This will be supported by growth in health segment and uptick in motor
segment.
Support and Resistance:
NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
15,683.35
|
15,502.34
|
15,812.94
|
BSE
Sensex
|
52,344.45
|
51,768.23
|
52,753.53
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Oil
& Natural Gas Corporation
|
879.12
|
120.25
|
117.91
|
123.56
|
Adani
Ports And Special Economic Zone
|
762.66
|
694.35
|
653.44
|
719.94
|
Tata
Motors
|
494.40
|
337.40
|
328.64
|
346.54
|
State
Bank of India
|
457.48
|
412.90
|
402.40
|
423.65
|
NTPC
|
439.27
|
113.55
|
111.59
|
116.84
|
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