Buying activity which took place
during late hour of trade mainly helped Indian equity indices to cut all of
their losses and to end Friday's session on optimistic note with gains of over
half percent. The indices staged a gap-down opening, tracking a global selloff
as coronavirus cases continued to surge. Traders were concerned after S&P
Global Ratings said India's external position should remain stable over the
next 12 months but COVID-19 pandemic-related risks to growth trajectory could
exert downward pressure of the sovereign ratings if there is a weak recovery.
S&P had projected India's economy to shrink by 5 per cent in the current
fiscal, and the growth recover to 8.5 per cent next fiscal. Selling further
crept in with the credit rating agency ICRA's report that the pace of credit
rating downgrades has accelerated with average monthly downgrades increasing by
22 percent in the past few months amid the rapid spread of the novel
coronavirus (Covid-19) across the globe as well as in India. Traders also
remained on sidelines ahead of industrial production data for April and CPI
inflation for May which are due later in the day. However, in the last hour of
trade, local barometer gauges recovered all of the day's losses to end higher,
as sentiments turned optimistic with Niti Aayog vice-chairman Rajiv Kumar's
statement that India's economy will recover after the containment of the
COVID-19 pandemic and the country will maintain its sound net external position.
He also said that India's strong democratic institutions promote policy
stability and the ongoing economic reforms, if executed well, should keep the
country's growth rate ahead of peers. Traders also found some solace with
Commerce and Industry Minister Piyush Goyal's statement that the country's
exports are drastically improving with the outbound shipments contracting 36
percent in May as compared to 60 percent in April. Finally, the BSE Sensex
gained 242.52 points or 0.72% to 33,780.89, while the CNX Nifty was up by 70.90
points or 0.72% to 9,972.90.
The US markets ended higher on
Friday as traders looked to pick up stocks at relatively reduced levels. The
advance on the day came on the heels of the sell-off seen in the previous
session. Adding to the positive sentiment, the University of Michigan released
a report showing a continued rebound in US consumer sentiment in the month of
June. The preliminary report showed the consumer sentiment index for June
climbed to 78.6 from 72.3 in May and 71.8 in April. Street had expected the
index to rise 75.0. Meanwhile, a separate report from the Labor Department
showed a bigger than expected jump in US import prices in the month of May. The
Labor Department said import prices surged up by 1.0 percent in May after
plunging by 2.6 percent in April. Street had expected import prices to increase
by 0.6 percent. The rebound in import prices came as fuel prices spiked by 20.5
percent in May following the 31.0 percent nosedive in the previous month.
However, upside remained capped as fears of an emerging second wave of the
epidemic in the U.S. persist, with half a dozen states, including Texas and
Arizona, facing rising infections of COVID-19. Arizona, Utah and New Mexico all
posted rises in new cases of 40% or higher, while Florida, Arkansas, South
Carolina and North Carolina saw cases rise by more than 30% for the week ended
June 7, on a rolling seven-day basis. Meanwhile, Richmond Federal Reserve Bank
President Tom Barkin said that the pandemic could have effects that last beyond
the next couple of months and cautioned that some of the millions of jobs that
have been lost during the viral outbreak may never return, echoing similar
remarks made by Fed Chairman Jerome Powell on Wednesday.
Crude oil futures ended marginally
lower on Friday on worries about a resurgence of coronavirus cases in the US.
Further, uncertainty about energy demand amid worries about the global growth
outlook weighed on the commodity. The International Monetary Fund's Gita
Gopinath said that the global economy is recovering more slowly than expected
and faces significant scarring. Crude oil futures for July lost 8 cents or 0.2
percent to settle at $36.26 a barrel on the New York Mercantile Exchange.
However, August Brent crude added 18 cents or 0.5 percent to settle at $38.73 a
barrel on London's Intercontinental Exchange.
Indian rupee gave up most of its
losses to close marginally down against dollar on Friday, due to fresh demand
for the American currency from banks and importers. Traders remained wary with
S&P Global Ratings' statement that India's external position should remain
stable over the next 12 months but COVID-19 pandemic-related risks to growth
trajectory could exert downward pressure of the sovereign ratings if there is a
weak recovery. S&P had projected India's economy to shrink by 5 per cent in
the current fiscal, and the growth recover to 8.5 per cent next fiscal. Traders
also remained on sidelines ahead of industrial production data for April and
CPI inflation for May which are due later in the day. However, most of losses
got trimmed as some support came with Commerce and Industry Minister Piyush
Goyal's statement that the country's exports are drastically improving with the
outbound shipments contracting 36 percent in May as compared to 60 percent in
April. On the global front, euro edged up slightly against the U.S. dollar on
Friday, not far from the three-month high it rose to earlier in the week, as
traders paused from cashing in the latest profits. Finally, the rupee ended at
75.84, 5 paise weaker from its previous close of 75.79 on Thursday.
The FIIs as per Friday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 5398.25 crore against gross selling of Rs 4540.44 crore, while
in the debt segment, the gross purchase was of Rs 782.72 crore with gross sales
of Rs 663.95 crore. Besides, in the hybrid segment, the gross buying was of Rs 21.11
crore against gross selling of Rs 15.75 crore.
The US markets ended higher on
Friday following massive losses in the prior session. Asian markets are trading
mostly in red on Monday as fears of a second wave of coronavirus infections in
China sent investors scurrying for safe-havens. Indian markets erased early
losses and ended higher on Friday, tracking gains in European markets. Today,
the start of new week is likely to be pessimistic following weakness in the
Asian peers as fears resurface over the coronavirus pandemic. Investors will be
looking ahead to the Wholesale price index inflation numbers for May which are
scheduled for release later the day. Traders will be concerned with rising
coronavirus cases in the country. As per the report, India is witnessing a
rapid increase in the number of coronavirus cases. With 11,220 new COVID-19
cases and 325 deaths registered on June 14, the total number of infections and
the death toll in India reached 3,32,777 and 9,521 respectively. There will be
some cautiousness as the government has not released the headline IIP growth for
April, Consumer Price Inflation (CPI) for May saying that it is not appropriate
to compare these readings with the previous months. The March IIP reading has
been revised further lower to -18.3 percent versus -16.7 percent said earlier.
Besides, it said the May CPI combined food price index is at 9.28 percent and
risen up 0.1 percent versus the April reading. Traders may react to the private
report that with the protracted lockdown pushing the Indian economy into deep
recession in the current fiscal, the escalating new COVID-19 cases after easing
of restrictions poses further downside risks to the economic outlook. Though,
some respite may come later in the day as the Goods and Services Tax (GST)
Council, in its first meeting after the lockdown was imposed, eased the
compliance burden for small businesses by slashing late fees and halving the
interest rate on them. Also, the GST Council has decided to reduce the late fee
on the filing of GSTR-3B returns for the period between July 2017 and January
2020. Meanwhile, the Reserve Bank came up with a modified oversight framework
for financial market infrastructure and retail payment systems with a view to
ensure safety and stability of payment structure. There will be some buzz in
the banking stocks with report that privatisation of any public sector bank
(PSB) during the current fiscal is very unlikely due to their low valuations
and mounting stressed assets amid the COVID-19 crisis. There will be some
reaction in power stocks with report that soaring mercury levels during the
second week of June in many parts of the country has resulted in narrowing of
power demand slump to 10.5 percent, compared with a fall of 19.7 percent during
the previous week.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
9,972.90
|
9,679.48
|
10,131.18
|
BSE Sensex
|
33,780.89
|
32,800.57
|
34,308.74
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
929.97
|
105.30
|
100.12
|
108.37
|
State Bank of India
|
927.62
|
179.15
|
172.63
|
182.83
|
Indusind Bank
|
574.32
|
528.45
|
496.27
|
547.67
|
Axis Bank
|
478.15
|
408.00
|
393.93
|
417.28
|
ICICI Bank
|
475.10
|
344.20
|
330.15
|
352.20
|
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