Benchmark stock indices opened in the green in line with positive Asian and US stock markets. As of 9:16 a.m., the Sensex was up 516.68 points or 0.93% at 56,185.71. The wider Nifty rose 157.20 points or 0.94% to 16,834.80. About 1,610 stocks were up, 395 stocks were down and 60 stocks were unchanged.
Early Nifty winners included Hindalco Industries, Infosys, Tata Steel, ONGC and Tech Mahindra. Nestlé, Apollo Hospitals, Tata Consumer Products, Asian Paints and NTPC were among the main laggards.
Asian stocks on the rise
Stocks soared in Asia amid investor relief after the Federal Reserve raised interest rates as expected to fight inflation while countering fears of massive hikes.
Nifty fell sharply on May 4, following a sudden and unanticipated announcement by the RBI Governor increasing the repo rate and CRR. At the close, Nifty was down 2.29% or 391.5 points at 16,677.6. In the process, Nifty was the worst performing index in the Asian region.
Nifty has fallen below the crucial support level of 16,824 and now appears to be heading towards 16,013 over the next few sessions/weeks, albeit after some intermittent bounces one of which may occur today. On the upside, the 16,824-16,889 band may now act as resistance.
US stocks close higher after Fed rate hike
U.S. stocks ended sharply higher, after the Federal Reserve made the first 50 basis point interest rate hike since 2000, but said bigger increases of 75 basis points were not possible. in play. Powell said half-point raises remain on the table for the next two meetings.
The Fed also outlined plans to shrink its balance sheet by nearly $9 trillion. The 50 basis point move was the largest by the U.S. central bank since 2000, when President Bill Clinton occupied the White House, and comes as the central bank struggles to quell inflation without triggering an economic recession. .
Powell spoke of a strong economy, but also the pain consumers are feeling at the grocery store and at the gas pump, during the afternoon press conference, saying higher interest rates high are the remedy.
The central bank also outlined a process to shrink its balance sheet, initially by $47.5 billion per month starting in June, but increasing to $95 billion per month. This will result in a reduction of almost $3 trillion from its record size over the next three years.
The Dow Jones Industrial Average rose 932.27 points, or 2.81%, to 34,061.06, the S&P 500 gained 124.69 points, or 2.99%, to 4,300.17 and the Nasdaq Composite added 401.10 points, or 3.19%, to 12,964.86. Concerns about a hit to economic growth from a hawkish Fed, mixed earnings at some large growth companies, conflict in Ukraine and pandemic-related lockdowns in China have hammered Wall Street recently, with shares of highly valued growth bearing the brunt of the sell-off, Reuters mentioned.
US trade deficit hits record high
Private sector payrolls rose by 247,000 in April, according to the ADP’s National Employment Report released on Wednesday. The U.S. trade deficit jumped 22.3% to $109.8 billion in March, the U.S. Census Bureau and the U.S. Bureau of Economic Analysis reported on Wednesday. U.S. imports soared 10.3% to $351.5 billion, while U.S. exports rose 5.6% to $241.7 billion in March.
In addition, the Institute for Supply Management’s services index showed weaker growth in new orders and employment, with the number falling to 57.1% in April from 58.3%, below forecasts. .
RBI raises repo rates
The Monetary Policy Committee of the Reserve Bank of India, at an unscheduled meeting on Wednesday, unanimously decided to raise the repo rate by 40 basis points to 4.40% with effect immediately citing inflation concerns. This is the first increase in the key rate since May 2020, marking a reversal in the RBI’s monetary policy stance.
Crude prices up
Crude prices soared as the European Union clarified some of the details of its plan to ban the use of Russian oil, heightening supply concerns. MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 0.93%, although trading was weak with the Japanese and Korean markets closed for the public holiday.
On Wednesday, crude oil prices settled on a positive note in international markets. Brent crude gained more than 4.5% and settled at around $110.12 a barrel, while US West Texas Intermediate (WTI) crude futures climbed above 107.80 dollars per barrel. Domestic markets also settled on a positive note, with MCX Crude futures trading above Rs 8,225, up 4.41%. Crude oil prices rose after the EU announced it would gradually stop buying oil from Russia.
Crude oil prices rose as the EU commissioner proposed sanctions against Russia this morning. The EU will stop buying oil in phases over the next 6 months. Natural gas prices jumped more than 9% at one point to a high of $8.169 per million British thermal units (MMBtu), the highest level since September 2008. Natural gas jumped on outlook for growing US LNG export demand, while warmer than usual weather forecasts could increase cooling demand. However, disappointing data from the US, weakness in the dollar index and concerns over Chinese demand could limit gains.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said: “We expect Crude Oil prices to remain volatile during today’s session. Crude Oil has support at 105 $.20-$103.80 and resistance at $108.90-$110.40 In INR terms, Crude Oil has support at Rs8,050-7,940, while resistance is at Rs 8,380-8 520.”
Fuel prices remain unchanged
Gasoline and diesel prices remained unchanged for the 29th consecutive day on Thursday. In Delhi, the price of petrol and diesel remains at Rs 105.41 per liter and Rs 96.67 per liter respectively.
In Mumbai, the price of petrol remained unchanged at a record high of Rs 120.51 per litre. The price of diesel also continues to be at Rs 104.77 per litre, the highest among metros.
In Chennai, petrol costs Rs 110.85 per liter and diesel Rs 100.94 per litre. In Kolkata, petrol is Rs 115.12 per liter and diesel Rs 99.83 per litre.
Petrol and diesel prices were last increased by 80 paise per liter each on April 6, bringing the total tariff increase in 16 days to 10 rupees per litre.
Bullion likely to open positive
On Wednesday, gold and silver ended on a high note in international markets. The June gold futures contract settled at $1,881, up 0.30% and the July silver futures contract closed at $22.99, up 0.30%. 1.71%. However, bullion finished negative in the domestic market. The gold futures contract was settled at Rs 50,562 per 10 grams with a loss of 0.48% and the silver futures contract was settled at Rs 62,080 per kilogram with a loss of 1. 54%.
Gold and silver prices are moving firmly towards the psychological resistance of $1,900 and $23 respectively following a strong rise in gold from around $1,866.00 and silver from around $1,866.00. $22.25 as news of the Federal Reserve’s interest rate hike decision supported the precious metal against the dollar. The outcome of the US Fed meeting took the US Dollar Index sharply below the $103.00 round support level, but gold and silver prices surged after the President of the Fed chief Jerome Powell said the US central bank was not actively weighing a 75 basis point hike.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd., said, “On May 5th, bullion prices are expected to open positive today. Gold has support at $1884-1872 and resistance at $1912-1920, while silver has support at $22.88-21.64 and resistance at $23.40-23.55. In INR terms, gold has support at Rs 50,450-50,310 and resistance at Rs 52,110-52,350, while silver has support at Rs 61,920-61,715 and resistance at Rs 63,330-63,910.
USDINR will remain volatile
The USDINR futures contract for May 27 showed high volatility during yesterday’s trading session and showed profit taking at higher levels. USDINR fell after the RBI unexpectedly hiked interest rates by 40 basis points in a bid to combat rising inflationary pressures. After the result of the US FED which dragged the US Dollar index sharply below the round support level of $103.00.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said: “We expect the pair to break through the 76.92 levels, indicating more strength in the upcoming sessions otherwise it could rise again. test its support level of 76.05 Looking at the technical setup, the pair could show weakness in the next sessions down to 76.05 Today USD-INR will remain volatile ahead of the outcome of the USD-INR meetings US Federal Reserve policy. We suggest watching the 76.05 levels closely.
(With contributions from Reuters)
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Posted: Thursday 05 May 2022, 09:23 IST