Indian equity benchmarks were
struggling with extreme volatility but ended Wednesday's session on optimistic
note with gains of over half percent, amid buying across sectors led by
financial shares, as hopes of economic reopening and a generally improved
global risk sentiment outweighed concerns over the surge in domestic COVID-19
infections. Domestic bourses made positive start and stayed in green for whole
day, tracking gains in Asian equities. Traders took encouragement with the
Department for Promotion of Industry and Internal Trade' (DPIIT) data showing
that Cayman Islands has emerged as the fifth largest investor in India, with
foreign direct investment (FDI) from the nation increasing over three-fold to
$3.7 billion in 2019-20. Buying further crept in as the Ministry of Corporate
Affairs (MCA) amended the Companies (Share Capital and Debentures) Rules, 2014,
to allow startups to issue sweat equity shares not exceeding 50% of its paid-up
capital up for a decade after the registration of the firm. However, volatility
struck bourses in afternoon session, as traders got wary with private report
stating that consumer behaviour in India is radically changing due to COVID-19
with 60 percent of buyers in the country believing that the pandemic would
alter the way they shop. However, markets gained traction in final hour of
trade, as the sentiment got a boost after Fitch Ratings said that after a
contraction in the current financial year, India's economy is forecast to
bounce back with a sharp growth rate of 9.5 percent next year, provided it
avoids further deterioration in financial sector health. Finally, the BSE
Sensex gained 290.36 points or 0.86% to 34,247.05, while the CNX Nifty was up
by 69.50 points or 0.69% to 10,116.15.
The US markets ended mostly lower
on Wednesday even though the Federal Reserve pledged to hold interest rates
unchanged at near zero through 2022, while keeping up at least its current pace
of bond buying to support credit markets through the pandemic. The Fed
announced its widely expected decision to maintain the target range for the
federal funds rate at zero to 0.25 percent. The accompanying statement also
reiterated that the Fed expects to maintain this target range until it is
confident that the economy has weathered recent events and is on track to
achieve its maximum employment and price stability goals. Expectations that rates
will remain at record lows come as the Fed projects real GDP to nosedive by 6.5
percent in 2020, as the ongoing public health crisis weighs heavily on economic
activity. However, the Fed's projections call for real GDP to rebound by 5.0
percent in 2021 followed by a 3.5 percent jump in 2022. The unemployment rate
is expected to drop to 9.3 percent by the end of this year from the current
13.3 percent before pulling back further to 6.5 percent in 2021 and 5.5 percent
the next year. On the economic data front, the Labor Department released a
report showing a modest decrease in consumer prices in the month of May. The
Labor Department said its consumer price index edged down by 0.1 percent in May
after slumping by 0.8 percent in April. Street had expected consumer prices to
come in unchanged. The dip in consumer prices came amid a continued decrease in
energy prices, which tumbled by 1.8 percent in May after plunging by 10.1
percent in the previous month. Prices for gasoline and fuel oil showed notable declines.
Crude oil futures ended higher on
Wednesday on account of weakness in the dollar that followed the Federal
Reserve's announcement that it plans to keep interest rates at near zero
through 2022. The Fed said that it would do what it takes to support the
economy-easing worries about energy demand. Further, oil prices rose despite
data showing an increase in US crude inventories in the week ended June 5. The
Energy Information Administration (EIA) showed US stockpiles increased by 5.7
million barrels in the week ended June 5 to 538.1 million barrels. Street was
expecting a draw of more than 1.5 million barrels in the week. The American
Petroleum Institute on Tuesday had reported a climb of 8.4 million barrels. Crude
oil futures for July rose 66 cents or 1.7 percent to settle at $39.60 a barrel
on the New York Mercantile Exchange. August Brent crude gained 55 cents or 1.3
percent to settle at $41.73 a barrel on London's Intercontinental Exchange.
Indian rupee has erased most of
the day's gains and ended marginally higher against dollar on Wednesday, amid
volatile trade seen in the domestic equity market. Traders took some support
with the Department for Promotion of Industry and Internal Trade' (DPIIT) data
showing that Cayman Islands has emerged as the fifth largest investor in India,
with foreign direct investment (FDI) from the nation increasing over three-fold
to $3.7 billion in 2019-20. Dollar losing sheen against some other currencies
overseas also supported the forex sentiment. On the global front, dollar fell
against most currencies on Wednesday amid some speculation the U.S. Federal
Reserve could take steps to curb a recent rise in bond yields in a policy
decision later in the day. Finally, the rupee ended at 75.59, 2 paise stronger
from its previous close of 75.61 on Tuesday.
The FIIs as per Wednesday'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 6465.58 crore against gross
selling of Rs 5988.88 crore, while in the debt segment, the gross purchase was
of Rs 371.90 crore with gross sales of Rs 871.83 crore. Besides, in the hybrid
segment, the gross buying was of Rs 11.27 crore against gross selling of Rs
7.73 crore.
The US markets ended mostly lower
on Wednesday after the Fed indicated interest rates are likely to remain at
current near-zero levels through 2022. Asian markets are trading mostly in red
on Thursday after the dovish commentary from the US Federal Reserve. Indian
markets ended notably higher on Wednesday, after Fitch Ratings said that Indian
economy will likely bounce back with a sharp growth rate of 9.5 percent in next
fiscal. Today, the markets are likely to make pessimistic start tracking
weakness in the global markets. Traders will be concerned with rising
coronavirus cases in India. The total number of coronavirus cases in the
country jumped to 2,87,155, while 8,107 people have died from the disease so
far, according to Worldometer. Besides, the Organization for Economic
Co-operation and Development (OECD) has projected that India's economy will
contract 7.3 per cent in the current fiscal year if there is a second wave of
the coronavirus (Covid-19) later this year. This is so far the steepest
contraction that any agency has predicted for the country. There will be some
cautiousness a private report that India consumer price inflation is likely to
have moderated to a six-month low in May on a softer rise in food prices as
supply disruptions eased after businesses reopened from the coronavirus
lockdown in many parts of the country. Though, some respite may come later in
the day with report that the Finance Ministry released the third monthly installment
of Rs 6,195 crore to 14 states as of Post Devolution Revenue Deficit Grant to
provide additional resources during COVID-19 crisis. Some support may also come
as global rating agency S&P Global Ratings affirmed BBB- long-term and A-3
short-term unsolicited foreign and local currency sovereign credit ratings on
India, dispelling fears that a rating downgrade is on the cards. The agency
said the outlook on the long-term rating is stable. Meanwhile, the government
has for the third time extended the validity of e-way bills generated on or
before March 24 till June 30. There will be some buzz in the gas sector stocks
with a report by the International Energy Agency (IEA) on the gas sector for
the year 2020 stating that India is set to emerge as one of the primary drivers
of growth in gas demand in Asia, after a temporary slowdown in 2020. Telecom
stocks will be in focus as the Supreme Court will hear the AGR matter later in
the day.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
10,116.15
|
10,052.42
|
10,164.32
|
BSE Sensex
|
34,247.05
|
34,014.28
|
34,414.99
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
840.39
|
111.40
|
108.93
|
113.43
|
State Bank of India
|
673.36
|
187.70
|
184.67
|
189.87
|
Indusind Bank
|
425.48
|
499.60
|
471.75
|
518.85
|
ICICI Bank
|
362.93
|
353.00
|
346.58
|
358.13
|
Axis Bank
|
361.64
|
427.45
|
417.60
|
435.00
|
Wipro has expanded its global strategic relationship with Amazon Web Services in the area of DevOps.
Bharti Airtel's wholly owned subsidiary -- Bharti International (Singapore) has acquired an additional 6.3 percent stake in Bangladesh's telecom operator Robi Axiata.
Cipla has signed agreements to acquire shares representing 21.85% stake in GoApptiv on a fully diluted basis.
Hero MotoCorp has reported 21.62% fall in its consolidated net profit attributable to owners of the company of Rs 604.63 crore for Q4FY20 as compared to Rs 771.44 crore for Q4FY19.