Dear Trader…
Indian equity benchmarks closed lower for a fourth straight session as public sector banks and information technology companies fell on Thursday, while investors worried about aggressive interest rate hikes by the Federal Reserve after hot U.S. inflation data. Selling in frontline blue chip stocks such as Axis Bank, SBI and Hindustan Unilever restricted the markets to go up. However, depreciating rupee for the fourth straight session continue to keep investors on sidelines.
Rupee weakened after the US consumer price index rose to a multi-year high of 9.1 percent in June, that fuelled the speculation that the US Federal Reserve will raise interest rates aggressively to tame soaring prices. The partially convertible rupee was at 79.88, down by 7 paise, against previous close of 79.81 per dollar. On the global front, Asian markets were trading mixed after higher U.S. inflation stoked expectations of more rate hikes that investors worry will chill economic growth.
Nifty futures opened at 15979.90 points against the previous close of 15980.00 and opened at a low of 15860.00 points. Nifty Future closed with an average movement of 219.00 points and a decline of around 38.90 points and 15941.00 points...!!
On the NSE, the midcap 100 index will decline 0.09% and smallcap 100 index is closing decline 1.14%. Speaking of various sectoral indices, the NSE saw gains in Pharma and Auto stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, August gold opened at Rs.50725, fell from a high of Rs.50729 points to a low of Rs.50275 with a decline of 440 points, a trend of around Rs.50362 and July Silver opened at Rs. 56950, fell from a high of Rs.56988 points to a low of Rs.55560, with a decline of 1422 points, a trend of around Rs.55705.
Meanwhile, State Bank of India (SBI) in a research report has expected the inflation in India to be about 5 per cent by March 23. It also said the 7.01 per cent consumer price index (CPI) inflation announced by the Indian government for June 2022 confirms the fact that the peak point has passed.
According to the SBI report, CPI inflation attributable to supply side factors started moving up after September 2021 while demand led CPI remained more or less constant. The two have been moving together post February 2022 (since the starting of Russia-Ukraine conflict). However, in the recent months demand led CPI inflation has moved up a bit, while supply led CPI inflation continues to moderate. Clearly, the RBI may have to raise rates further though, the clear downward trend in inflation attributable to supply side factors bodes quite well for inflation trajectory going forward.
The report further said the core inflation has trended down from its peak in April (taking last 12-months as reference period). The moderation is on account of fall in contribution of transport and communication from 1.7 per cent in April to 1.1 per cent in June. The fall in core CPI largely the product of fall in demand owing to lagged effect of high inflation in the past months. Further correction in prices of precious metal around April has contributed to correction in personal care and effect.
Technically, the important key resistances are placed in Nifty future are at 16006 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 16060 - 16106 levels. Immediate support is placed at 15808 – 15676 levels.
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