Dear
Trader…
Friday
turned out to be a horrendous day of trade for Indian equity benchmarks with
frontline gauges shaved off over one and a half percent each as traders were
worried that aggressive interest rate hikes to tame surging inflation may dent
global economic growth in the coming time. Markets started the day on
pessimistic note as India Ratings said inflation, supply chain disruptions and
a weak consumption demand could upset the revival in credit growth in the
medium term. It said the reversal of the interest rate cycle–marked by the
Reserve Bank of India’s 40 basis points increase in policy repo rate — would
weigh down credit growth as borrowings become costlier.
Sentiments
continued to remain dampened throughout the day as traders remain concerned
amid a private report stating that India’s central bank hiked its key lending
rate in a surprise move fearing ‘shocker’ inflation numbers for April, adding
the ultimate aim is to reverse its pandemic-era ultra-loose rate regime. Adding
some more worries, India has raised concerns at the World Trade Organization
(WTO) over a host of trade barriers built in by Indonesia, including export
restrictions on palm oil and import curbs on bovine meat and automotive (auto)
parts, holding that such measures have adversely impacted India.
Nifty
futures opened at 16451.25 points against the previous close of 16694.30 and
opened at a low of 16346.75 points. Nifty Future closed with an average
movement of 148.05 points and a decline of around 254.30 points and 16440.00 points…!!
On the NSE, the
midcap 100 index will decline 1.79% and smallcap 100 index is closing decline 2.53%.
Speaking of various sectoral indices, Realty, IT, Financial Services, PVT Bank
and Metal stocks saw heavy selling on the NSE, while all other sectoral indices
also closed lower.
At the start
of intra-day trading, June gold opened at Rs.50936, fell from a high of Rs.51330
points to a low of Rs.50905 with a rise of 360 points, a trend of around Rs.51259
and May Silver opened at Rs.62086, fell from a high of Rs.63030 points to a low
of Rs.62085, with a rise of 366 points, a trend of around Rs.62702.
Meanwhile,
expressing optimism over economic growth, commerce and industry minister Piyush
Goyal has said all the key indicators such as jump in exports and high GST collection
in April reflect that the country’s economy is on the growth path. He said that
goods and services exports have touched $675 billion in 2021-22, while the GST
(Goods and Services Tax) collection in April touched the highest ever level of
about Rs 1.68 lakh crore, up 20 per cent from the year-ago period.
He also
asked project exporters to diversify and foray into markets of the developed
world and urged them not to restrict themselves to government’s line of credit
projects and projects in the developing world. He outlined the challenges that
the global economy has been facing such as the Omicron wave, global supply
chain disruptions, soaring raw material costs, container shortages, financial
market volatility and geopolitical tensions.
Technically, the important key resistances are placed in Nifty future are at 16560 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 16676 – 16808 levels. Immediate support is placed at 16373 – 16303 levels.
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