Dear Trader…
Indian equity benchmarks extended their fall for the second straight session on Thursday and ended with losses of over two and half percent as fears over slower economic growth due to rising inflation dented investor sentiment. Markets made a gap-down opening and stayed in red for whole day, as traders were anxious as the United Nations said India is expected to grow 6.4% in 2022, well below the 8.8% growth in 2021, as higher inflationary pressures and uneven recovery of the labour market are likely to curb private consumption and investment.
Trading sentiments remained subdued in the late trade with a private report stated that equity investors became poorer by over Rs 5 lakh crore in early trade on Thursday as domestic benchmark indices tumbled mirroring weak trends in global equities. That apart, selling by foreign institutional investors (FIIs) also added to the pessimism in the markets. FIIs have been net sellers for eight straight months, and have dumped equities worth nearly Rs 38,000 crore in the month of May so far.
Nifty futures opened at 15981.30 points against the previous close of 16226.05 and opened at a low of 15740.00 points. Nifty Future closed with an average movement of 241.30 points and a decline of around 442.05 points and 15784.00 points...!!
On the NSE, the midcap 100 index will decline 2.99% and smallcap 100 index is closing decline 2.68%. Speaking of various sectoral indices, IT, Metal, Media, PSU Bank, PVT Bank and Auto 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.50280, fell from a high of Rs.50710 points to a low of Rs.50058 with a rise of 447 points, a trend of around Rs.50665 and May Silver opened at Rs.60700, fell from a high of Rs.61750 points to a low of Rs.60175, with a rise of 767 points, a trend of around Rs.61545.
Meanwhile, expressing optimism over India’s economy, Moody's Analytics in its latest report has said that the country’s economy is back on track after the pandemic and it does not expect the military conflict (in Ukraine) to derail the recovery. Several months into the conflict, fears over the impact have moderated. It said ‘following a robust rebound of over 9 per cent in the year ending March 2022 (fiscal 2021), we expect real GDP to grow 8.2 per cent in fiscal 2022, the fastest expansion among G20 countries globally and partly reflecting ongoing base effects from pandemic-led disruptions’.
The report said the buoyant economy creates favourable operating conditions for the country's banks, besides their loan performance and profitability are improving, albeit from a low base. Capital and liquidity levels are also stable. It added the global economic fallout from the Russia-Ukraine military conflict will push up inflation and interest rates in India, and create supply constraints. India, as an agricultural economy, is a net food exporter but depends on significant agricultural imports such as palm oil. It noted that higher food prices will therefore directly affect inflation, while soaring fuel prices will have an even larger adverse impact. India's Consumer Price Index (CPI) was 6.1 per cent before the conflict and had risen to 7 per cent in March.
Technically, the important key resistances are placed in Nifty future are at 15808 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 15888 – 15909 levels. Immediate support is placed at 15676 – 15606 levels.
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