Dear Trader…
Indian equity benchmarks trimmed most of their losses in today session, but close below the neutral lines with Sensex and Nifty trading below at 51950 and 15650 respectively. Stocks from oil and gas, consumer durables and energy counters were supporting the markets, while those from metal, basic materials and realty counters were adding to the underlying cautious undertone.
Traders were worried as State Bank of India (SBI) revised India's growth outlook downwards for the current financial year as the second wave of Covid-19 and the resultant restrictions will again cripple economic activities. The latest SBI Ecowrap report has projected a 7.9 per cent growth for India's GDP, down from its previous projection of 10.4 per cent growth. However, markets trimmed most of their losses as the output of eight core sectors jumped by 56.1% mainly due to low base effect and uptick in production of natural gas, refinery products, steel, cement and electricity.
On the global front; Asian markets were trading mostly higher as investors looked ahead to U.S. jobs data for reassurance the biggest global economy is improving following the previous month’s big hiring miss.
Nifty futures opened at 15612.50 points against the previous close of 15583.20 and opened at a low of 15546.10 points. Nifty Future closed with an average movement of 113.90 points and a rise of around 40.20 points and 15623.40 points .. !!!
On the NSE, the midcap 100 index will decline 0.10% and smallcap 100 index is closing decline 0.65%. As far as various sectoral indices are concerned, only IT, media and pharma stocks were seen gain on the NSE, while all other sectoral indices closed lower.
At the start of intra-day trading, June gold opened at Rs.49049, fell from a high of Rs.49225 points to a low of Rs.48914, with a rise of 270 points, a trend of around Rs.49091 and July Silver opened at Rs.72500, fell from a high of Rs.73147 points to a low of Rs.72460, with a rise of 1006 points, a trend of around Rs.72904..!!
Meanwhile, Revenue Secretary Tarun Bajaj has said that Indian economy has not suffered as much this year amid the second wave of COVID-19 as compared to last year when there was complete lockdown. Giving two scenarios, he said if Rs 1.10 lakh crore GST is collected per month, the deficit in states’ revenue would be Rs 1.50 lakh crore. If Rs 1.15 lakh crore GST is collected monthly, then that deficit would be Rs 1.25 lakh crore. So since Rs 1.58 lakh crore would be borrowed this fiscal towards compensating states, the extra borrowing, over and above what is the shortfall this year, would be utilised to make good the shortfall in states’ revenue of previous years.
Bajaj has stated that the Indian economy contracted 8 percent in the previous fiscal ended March 2021. Last month, the RBI retained its growth forecast at 10.5 per cent for the current financial year, while ADB projected a growth rate of 11 per cent. However, rating agencies have lowered growth forecasts for India, saying that the second wave of infections will hamper economic recovery. They, however, have estimated that the negative impact on economic output will be limited to the April-June quarter.
Technically, the important key resistances are placed in Nifty future are at 15623 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 15676 – 15777 levels. Immediate support is placed at 15505 – 15474 levels.
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