Dear
Trader…
Indian
equity benchmarks reversed early gains and ended the day with marginal losses
on Friday on late selling pressure in Metal, Utilities & Telecom stocks.
With this, the markets ended lower for the sixth straight day despite upbeat
global mood. Key gauges made gap-up opening, as traders took support with the
finance ministry stated that measures taken by the RBI and government will
squeeze the duration of high inflation fuelled by global factors.
However, key
indices came under fag-end selling pressure to close in the red as risk-off
sentiment prevailed amid unabated selling by foreign institutional investors
and concerns over inflation. Traders also got anxious with data showing that
India’s retail inflation surged to an eight-year high of 7.79 percent in April,
raising the prospect of another interest rate hike from the RBI in the next
policy meeting in June. Besides, Industrial production growth remained subdued
at 1.9 per cent in March compared to a year ago, mainly due to poor performance
by the manufacturing sector which showed staggered impact of the third wave of
the pandemic.
Nifty
futures opened at 15968.90 points against the previous close of 15810.75 and
opened at a low of 15744.10 points. Nifty Future closed with an average
movement of 346.90 points and a decline of around 27.10 points and 15783.65 points…!!
On the NSE, the
midcap 100 index will rise 1.03% and smallcap 100 index is closing rise 0.94%. Speaking
of various sectoral indices, the NSE saw gains in only Auto, FMCG, Pharma,
Media and PSU Bank stocks, while all other sectoral indices closed lower.
At the start
of intra-day trading, June gold opened at Rs.50067, fell from a high of Rs.50249
points to a low of Rs.49670 with a decline of 203 points, a trend of around Rs.49971
and May Silver opened at Rs.58954, fell from a high of Rs.59300 points to a low
of Rs.58192, with a rise of 413 points, a trend of around Rs.59164.
Meanwhile,
with headline inflation accelerating to an eight-year high of 7.79 per cent in
April, ratings agency Crisil said price rise is getting broad-based, and the
Reserve Bank is likely to respond with rate hikes of up to 1 percentage point
in FY23. It mentioned ‘Inflation is set to become broad-based this fiscal,
rising across food, fuel and core inflation….we expect the RBI to raise repo
rates by another 0.75 per cent to 1 per cent in the rest of this fiscal.’
The RBI
hiked its key rate by 0.40 per cent in a surprise move last week while keeping
an accommodative stance. Crisil said it now expects the average consumer price
inflation for FY23 to come at 6.3 per cent — above the RBI’s tolerance of 6
per cent — as against 5.5 per cent recorded in FY22.
The agency
made it clear that the rate hikes will be ineffective in bringing down food or
fuel inflation, but can help check a generalisation in inflation by curbing the
second-round effects. The government will need to pull its weight to control
price rise, admitting that it is a tradeoff where reducing taxes and subsidies
will lead to added fiscal pressure.
Technically, the important key resistances are placed in Nifty future are at 15909 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 16006 – 16060 levels. Immediate support is placed at 15676 – 15606 levels.
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