Indian equity
benchmarks ended over half a percent lower on Tuesday amid selling pressure
across sectoral indices and in the broader markets despite firm cues from
global markets. Markets made a slightly positive start but soon erased gains to
trade lower amid foreign fund outflows. Foreign Institutional Investors (FIIs)
sold shares worth Rs 2,168.75 crore on May 6. Also, geopolitical tensions
weighted on markets as Israel commenced its planned military offensive in Rafah
hours after it rejected Hamas's proposal for a ceasefire in Gaza. Key gauges
extended losses in late morning deals as traders remained anxious with a
private report stating that beyond geopolitical situations, the growing global
concern surrounding environmental issues and clean energy pose certain threats
to Indian companies planning to invest abroad. Sentiments remained dampened in
afternoon deals, even as India Ratings and Research revised upward the
country's GDP growth estimate for FY25 to 7.1 per cent from 6.5 per cent
earlier. The projection is marginally higher than the Reserve Bank's estimate of
7 per cent. The rating agency said strong support from the sustained government
capex, deleveraged balance sheets of corporate and banking sector, and the
incipient private corporate capex cycle make it revise its estimate. Meanwhile,
Finance Minister Nirmala Sitharaman said that the government has adopted a
pro-poor approach while implementing Goods and Services Tax, and despite lower
taxes rates the revenues as a percentage of GDP have reached the pre-GST level.
She said without GST, states' revenue from subsumed taxes from FY 2018-19 to
2023-24 would have been Rs 37.5 lakh crore. With GST, states' actual revenue
amounted to Rs 46.56 lakh crore. Finally, the BSE Sensex fell 383.69 points or
0.52% to 73,511.85 and the CNX Nifty was down by 140.20 points or 0.62% points
to 22,302.50.
The US markets ended mostly
higher on Tuesday. Markets saw modest strength throughout much of the trading
session but gave back ground in afternoon trading to end the day little
changed. The Dow still managed to close higher for the fifth consecutive
session, reaching its best closing level in a month. However, buying interest
waned after Minneapolis Federal Reserve President Neel Kashkari suggested
interest rates may need to remain at current levels for an extended period.
Kashkari said I would need to see multiple positive inflation readings
suggesting that the disinflation process is on track before cutting rates. Kashkari also said he could not rule out the Fed once again raising rates,
calling the bar for hiking rates quite high but not infinite. On the sectoral
front, most of the major sectors ended the day showing only modest moves,
contributing to the lackluster close by the broader markets. Airline stocks
showed a substantial move to the downside, with the NYSE Arca Airline Index
tumbling by 2.7 percent. Considerable weakness also emerged among computer
hardware stocks, as reflected by the 1.1 percent loss posted by the NYSE Arca
Computer Hardware Index. On the other hand, utilities stocks turned in a strong
performance on the day, driving the Dow Jones Utility Average up by 1.3
percent. Among individual stocks, shares of Disney (DIS) fell sharply even
though the entertainment giant reported better than expected fiscal third
quarter earnings.
Crude oil futures ended lower on
Tuesday as investors looked for direction, closely following the developments
on the geopolitical front, and awaiting weekly crude inventory. Hamas
reportedly accepted an Egyptian-Qatari cease-fire proposal to halt the
seven-month war with Israel, but the latter said the deal didn't meet its core
demand. Meanwhile, markets await weekly oil reports from the American Petroleum
Institute (API) and U.S. Energy Information Administration (EIA). EIA is
scheduled to release its inventory data on Wednesday. Benchmark crude oil
futures for June delivery fell $0.10 or about 0.12% to settle at $78.38 a
barrel on the New York Mercantile Exchange. Brent crude for July delivery lost $0.17
or 0.20% to $83.16 per barrel on London's Intercontinental Exchange.
Indian rupee consolidated in a
narrow range and settled almost unchanged against the US dollar on Tuesday,
amid a weak trend in domestic equities. The strength of the American currency
in the overseas market, elevated crude oil prices and foreign fund outflows
weighed on the local unit. However, traders took some support as India Ratings
and Research revised upward the country's GDP growth estimate for FY25 to 7.1
per cent from 6.5 per cent earlier. The projection is marginally higher than
the Reserve Bank's estimate of 7 per cent. The rating agency said strong
support from the sustained government capex, deleveraged balance sheets of
corporate and banking sector, and the incipient private corporate capex cycle
make it revise its estimate. On the global front, the U.S. dollar edged higher
on Tuesday, attempting a comeback after the sharp losses at the end of last
week, while the Japanese yen retreated despite more intervention threats. Finally,
the rupee ended at 83.51 (Provisional), stronger by 1 paisa from its previous
close of 83.52 on Monday.
The FIIs as per Tuesday's data
were net sellers in equity segment, while they were net buyers in debt segment.
In equity segment, the gross buying was of Rs 13576.97 crore against gross
selling of Rs 14727.95 crore, while in the debt segment, the gross purchase was
of Rs 2378.93 crore with gross sales of Rs 2015.39 crore. Besides, in the
hybrid segment, the gross buying was of Rs 9.05 crore against gross selling of
Rs 46.84 crore.
The US markets ended mostly in
green on Tuesday as investors weighed potential Federal Reserve rate cuts.
Asian markets are trading mixed on Wednesday after a slow US session. Some
investors doubt if the recent rally can hold amid economic uncertainties.
Indian markets ended lower on Tuesday due to continued profit booking as
selling prevailed across the board amid disappointing Q4 earnings. Today,
markets are likely to get a flat-to-positive start mirroring a mixed trend in
global markets. Fall in crude oil prices likely to aid domestic sentiments. Oil
steadied near its mid-March lows amid Middle East tensions and a slightly
bearish US stockpiles report. However, foreign fund outflows likely to dent
sentiments. FIIs sold shares worth Rs 3,668.84 crore on May 7. There will be
some cautiousness as an industry wise analysis of the National Accounts
Statistics 2024 data showed gross capital formation (GCF) - or investment - in
manufacturing, construction, and mining sectors contracted in FY23 primarily
due to a fall in export demand and low private consumption during the year.
Traders may take note of ICRA’s report that incremental credit flow in the
Indian economy from domestic sources is expected to moderate to Rs 24.5
trillion in the ongoing financial year. It was Rs 25.4 trillion in the previous
financial year. However, the corporate bond issuances are expected to rise by
9.9 per cent. Stocks of Oil & Gas Industry likely to be in focus as data
from the Petroleum Planning and Analysis Cell (PPAC) of the oil ministry showed
that India's fuel consumption, a proxy for oil demand, rose by 6.1%
year-on-year to 19.858 million metric tons in April. There will be some reaction
in FMCG industry stocks with a private report that the Indian FMCG industry
experienced a 6.5 per cent growth in volume terms at a national level in the
January-March period of 2024, with rural consumption surpassing urban for the
first time in five quarters. Aviation industry stocks will be in limelight with
a private report that the average daily domestic air traffic experienced a
month-on-month increase of 1.6 per cent, reaching 442,783, fueled by sustained
demand during the summer season. Meanwhile, investors will watch out for key
results including Hero MotoCorp, L&T, TVS Motors, and Tata Power among
others.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
22,302.50
|
22,190.01
|
22,457.01
|
BSE
Sensex
|
73,511.85
|
73,171.80
|
73,939.34
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Steel
|
436.12
|
164.20
|
161.69
|
167.34
|
ITC
|
259.69
|
441.00
|
435.46
|
446.26
|
SBIN
|
167.25
|
803.65
|
793.01
|
814.46
|
ICICI
Bank
|
150.98
|
1130.80
|
1120.49
|
1146.94
|
HDFC
Bank
|
142.40
|
1505.10
|
1498.15
|
1518.05
|
- Tata Motors has rolled out
9,00,000th vehicle from its state-of-the-art Lucknow facility.
- Bharti Airtel has registered
significant increase in 5G users in Himachal Pradesh and Haryana.
- Infosys has been certified with
ISO 42001:2023, world's first international standard on Artificial Intelligence
Management Systems, by TUV.
- LTIMindtree has collaborated with
IBM to establish a global, joint Generative AI CoE in India, a co-innovation
center combining the power of the IBM watsonx AI and data platform and the
engineering skills of LTIMindtree.