Dear Trader…
Indian equity benchmarks started on a positive note and stayed in green for most part of the day, as sentiments got boost as SBI Research projected the Indian economy to grow at 7.5 per cent in 2022-23, an upward revision of 20 basis points from its earlier estimate. It said ‘given the high inflation and the subsequent upcoming rate hikes, we believe that real GDP will incrementally increase by Rs 11.1 lakh crore in FY23’.
Key gauges maintained their upward momentum in the noon session, after India's dominant services sector expanded at the fastest pace in 11 years in May on strong demand, although inflationary pressures touched new highs, restricting optimism and weighing on consumers' pocketbooks. The S&P Global India Services Purchasing Managers' Index rose to 58.9 in May from 57.9 in April, its highest since April 2011 and comfortably beating the Reuters poll expectation of 57.5.
However, key indices trimmed all of their gains to enter into negative terrain as traders got anxious with report stated that as the country's fiscal policy is moving in sync with the monetary policy amid the runaway inflation, the tightening measures along with rising subsidies imply that the consolidated fiscal deficit may remain elevated at 10.2 per cent of GDP in FY23, down 20 bps from FY22.
Nifty futures opened at 16761.50 points against the previous close of 16621.20 and opened at a low of 16578.00 points. Nifty Future closed with an average movement of 212.00 points and a decline of around 20.20 points and 16601.00 points...!!
On the NSE, the midcap 100 index will decline 1.64% and smallcap 100 index is closing decline 0.86%. Speaking of various sectoral indices, the NSE saw gains in only IT stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, August gold opened at Rs.51340, fell from a high of Rs.51390 points to a low of Rs.51110 with a rise of 6 points, a trend of around Rs.51275 and July Silver opened at Rs.62666, fell from a high of Rs.62936 points to a low of Rs.62306, with a rise of 124 points, a trend of around Rs.62460.
Meanwhile, SBI Research in its latest report has projected the Indian economy to grow at 7.5 per cent in 2022-23, an upward revision of 20 basis points from its earlier estimate. SBI chief economist Soumyakanti Ghosh said ‘Given the high inflation and the subsequent upcoming rate hikes, we believe that real GDP will incrementally increase by Rs 11.1 lakh crore in FY23. This still translates into a real GDP growth of 7.5 per cent for FY23, up by 20 basis points over our previous forecast’. As per the government data, the economy grew by 8.7 per cent in FY22, net adding Rs 11.8 lakh crore in the year to Rs 147 lakh crore, the report said, adding this was however only 1.5 per cent higher than the pre-pandemic year of FY20.
Ghosh said nominal GDP expanded by Rs 38.6 lakh crore to Rs 237 lakh crore, or 19.5 per cent annualised. In FY23 also, as inflation remains elevated in the first half, nominal GDP will grow 16.1 per cent to Rs 275 lakh crore. The report basis its optimism on the rising corporate revenue and profit and the growing bank credit coupled with ample liquidity in the system. On rising corporate growth, the report noted that in FY22, around 2,000 listed companies reported 29 per cent top line growth and 52 per cent jump in net profit over the previous year. Construction sectors including cement, steel, etc reported impressive growth in both revenue as well as net income with 45 per cent and 53 per cent, rise respectively in revenue.
Technically, the important key resistances are placed in Nifty future are at 16660 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 16737 – 16808 levels. Immediate support is placed at 15535 – 15474 levels.
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