Sensex up, Nifty around 17,000

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Stock markets opened on a positive note. The Sensex rose 63.69 points or 0.11% to 57,039.68. Nifty rose 23.90 points or 0.14% to 17,093. About 1,502 shares were up, 486 shares were down and 107 shares were unchanged.

On Monday May 2, the Sensex was down 84.88 points or 0.15% at 56,975.99. The Nifty was down 33.40 points or 0.20% at 17,069.10.

Among the main winners of the Nifty were Britannia Industries, ONGC, Tata Motors, Bajaj Auto and Power Grid Corp. Laggards included Hindalco Industries, Apollo Hospitals, Bharti Airtel, Shree Cements and HDFC Life.

Consumer durables company Voltas traded down 3.00% at Rs 1194.70. Titan fell 2.08% to Rs 2337. Havells fell 1.73% to Rs 1267.05.

Healthcare stocks also came under selling pressure. NGL Fine-Chem Limited fell 12.01% to Rs 1,997.35. Alembic Pharmaceuticals Limited slipped 6.15% to Rs 738.45.

Apollo Hospitals also dipped 3.59 points to Rs 4,149.90, while Metropolis fell 3.43% to Rs 2,213.30. Dr Reddy’s stock also fell 2.72% to Rs 4,010.

Six of the 30 scrips that are part of the Sensex benchmark were trading in the positive. Power Grid Corporation, Infosys, State Bank of India and Wipro were among Sensex’s top winners.

Asian stocks on the rise

Asian stocks edged higher on Wednesday as investors braced for the Federal Reserve’s biggest interest rate hike since 2000 and awaited more clues about how aggressively it planned to fight inflation.

US stocks close higher

Major U.S. stock indexes ended higher on Tuesday after choppy trading on the eve of what is expected to be the most aggressive Federal Reserve monetary policy tightening in two decades. The market is split between those who think the Federal Reserve will have to do a lot of tightening and kill the economy” and those who think the Fed won’t have to do as much as is already “priced in” for this year.

MSCI’s all-country world index rose 0.4% and the pan-European STOXX 600 index closed up 0.53% after surviving a ‘flash crash’ in Nordic markets on Monday caused by a trade in Citigroup sell order. The Dow Jones Industrial Average rose 0.17%, the S&P 500 gained 0.48% and the Nasdaq Composite added 0.16%.

The Federal Open Market Committee kicked off a two-day meeting on Tuesday that is expected to end with its first half-percentage-point rate hike since 2000, as well as a plan to reduce the size of its balance sheet. Fed Chairman Jerome Powell will hold a press conference on Wednesday afternoon.

Economic data released on Friday highlighted a tight labor market. Job postings in the United States hit a record 11.5 million in March, while the number of people quitting also hit a record high. Meanwhile, orders for U.S. manufactured goods rose 2.2% stronger than expected in April.

Australia’s central bank raises interest rates

Overnight in Asia, the Australian central bank raised its key rate by 25 basis points more than expected. The Bank of England is expected to raise rates on Thursday for the fourth consecutive time.

Indian exports down in April

India’s merchandise exports stood at $38.19 billion in April (up 24.2 percent year-on-year), up from $42.22 billion a month ago. Imports, however, did not fall by the same magnitude, reaching $58.26 billion (up 26.6% year on year) from $60.74 billion in March. Thus, the merchandise trade deficit widened to $20.07 billion (up 31.2% year-on-year), from $18.51 billion during the period.

Crude oil prices under pressure

Crude oil settled on a weaker note in international markets on Tuesday, with WTI crude trading at $102.58 a barrel and Brent crude at $104.97 a barrel. Domestically, oil settled on a weaker note at 7,892 rupees a barrel, down 2.07%. China Covid shutdowns continued and investors weighed a possible ban on Russian oil from the EU amid weakening demand to put downward pressure on benchmarks. The EU has confirmed its intention to toughen sanctions against Russia, with Germany saying it is ready to support an immediate embargo on Russian oil. Similar data came out of China, with the world’s second-largest economy reporting that factory activity contracted for a second consecutive month to its lowest level since February 2020 amid further coronavirus-induced shutdowns.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd., said, “We expect crude oil prices to remain volatile and trading under pressure during today’s session. Oil has support at Rs 7,720-7,580; while resistance is at Rs 8,050-8,174″.

Gasoline and diesel prices remain unchanged

Gasoline and diesel prices remained flat for the 28th consecutive day on Wednesday. Since the end of a four and a half month long hiatus in tariff reviews on March 22, petrol and diesel prices have risen by Rs 10 per liter each via 14 reviews. Fuel prices were last increased on April 6 by 80 paise per liter each.

Thus, in Delhi, the price of gasoline 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 prices will remain volatile

On Tuesday, gold and silver prices were firm after Monday’s relentless selling pushed both precious metals to 2.5-month lows. Gold and silver prices are firmer due to short hedging by shorter term futures traders. The bulls are trying to stop the bleeding in bearish markets that have been punished by a strong US dollar and rising bond yields. In international markets, gold closed at $1,868.12 and silver at $22.58 an ounce. On the domestic market, gold closed up slightly by 0.29% at 50,808 rupees while silver ended up 0.33% at 63,132 rupees. .

Rahul Kalantri, Vice President Commodities, Mehta Equities Ltd., said, “Today bullion prices will remain volatile ahead of the outcome of US Federal Reserve policy meetings. Gold has support at $1850-1838, while resistance at $1882-1895. Silver has support at $22.10-21.80, while resistance is at $22.94-23.22. In INR terms, gold has support at Rs 50,550–50,320, while resistance is at Rs 52,110–52,350. Silver has support at Rs 62,650-62,215, while resistance is at Rs 63,830-64,210.

USD-INR Outlook

The USDINR futures contract for May 27 showed high volatility last week and showed profit taking at higher levels. On the weekly technical chart, a pair is trading above its resistance level of 76.3500. Consistent with the daily technical chart, we observed a pair forming a double top on the weekly technical chart. We expect a pair only breaking through the 77.20 levels may show additional strength in the coming sessions otherwise it may retest its support level of 76.35. As for the technical setup, a pair only breaking through the 77.20 levels might show additional strength in the upcoming sessions otherwise it might retest its support level of 76.35.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd., said, “Today USD-INR will remain volatile ahead of the outcome of US Federal Reserve policy meetings. We suggest watching the 76.3500 to 77.2000 levels closely to take new positions in the pair.

Results today

The following companies will announce their quarterly results today: Kotak Mahindra Bank, Tata Consumer Products, ABB India, Adani Green Energy, CarTrade Tech, Adani Total Gas, Equitas Small Finance Bank, Havells India, Bombay Dyeing & Manufacturing Company, Deepak Nitrite, Laxmi Organic Industries, Mahindra EPC Irrigation, Satin Creditcare Network, SIS, Oracle Financial Services Software, Rain Industries, EIH, IIFL Wealth Management, Aptech, Cigniti Technologies and MAS Financial Services.

(With contributions from Reuters, agencies)

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Posted: Wednesday May 4th 2022, 09:24 IST

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