Dear Trader…
Indian equity benchmarks wiped out early gains and settled lower for the third day in a row on Wednesday, pulled down by HDFC twins amid persistent foreign fund outflows. Markets made optimistic start, as traders took some support with the government data showing that the factory output rose 1.7 per cent in February, mainly on account of rise in the mining sector and power generation. The Index of Industrial Production (IIP) had declined 3.2 per cent in February 2021. Mining output rose 4.5 percent year-on-year in February and electricity was up by 4.5 percent.
Some optimism also came as Chief Economic Adviser V Anantha Nageswaran expressed hope that the private sector is expected to accelerate capital expenditure from the second half of the current fiscal and he also asserted that the economic situation is likely to improve during the year.
However, key gauges failed to hold on to opening gains and slipped into negative terrain in afternoon deals, as traders turned anxious with data showing that India's retail inflation jumped to a 17-month high of 6.95 percent in March from 6.07 percent in February. The Consumer Price Index (CPI) inflation print for March is well above the consensus estimate. This is the third consecutive month in which inflation has come in above the 6 percent upper bound of the Reserve Bank of India's (RBI) mandate, averaging 6.3 percent in January-March.
Nifty futures opened at 17615.75 points against the previous close of 17576.80 and opened at a low of 17488.40 points. Nifty Future closed with an average movement of 216.40 points and a decline of around 70.75 points and 17506.05 points...!!
On the NSE, the midcap 100 index will decline 0.03% and smallcap 100 index is closing rise 0.19%. Speaking of various sectoral indices, the NSE saw gains in only FMCG, Metal, Pharma and PSU Bank stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, April gold opened at Rs.52850, fell from a high of Rs.53150 points to a low of Rs.52807 with a rise of 168 points, a trend of around Rs.53046 and March Silver opened at Rs.68846, fell from a high of Rs.69500 points to a low of Rs.68772, with a rise of 530 points, a trend of around Rs.69320.
Meanwhile, Chief Economic Adviser (CEA) V Anantha Nageswaran has stated that the economic situation is likely to improve in the current financial year. Nageswaran expressed hope that the private sector is expected to accelerate capital expenditure from the second half of the current fiscal (H2FY23). The investment from private sector has been muted for past many years despite several measures, including corporate tax cut, taken by the government to reinvigorate it.
He mentioned ‘Bank credit is beginning to pick up especially in MSME sector. Therefore, I think probably by the end of the second quarter or in the second half of the year, private sector picking up the baton of capital expenditure... sooner rather than later Indian private sector will pick up the capital expenditure baton and run with it.’ Further, he said an RBI survey has shown a jump in capacity utilisation by the industry from 68 per cent to 74 per cent. He added the top four firms in several sectors are already operating over 80 per cent capacity.
Technically, the important key resistances are placed in Nifty future are at 17575 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 17676 – 17707 levels. Immediate support is placed at 17373 – 17232 levels.
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