Dear Trader…
Indian equity benchmarks continued their lackluster trade in today session on account of profit booking in front line blue chip counters. The Sensex slipped by over 500 points, while the Nifty fell below 16500 level. Investors were trading cautiously ahead of the US Fed rate decision on Wednesday. Sentiments were fragile as Minister of State for Finance Pankaj Chaudhary said the Central government's total liabilities are seen rising to Rs 155.33 lakh crore in FY23.
This would represent an increase of 12 percent over the FY22 figure of Rs 138.88 lakh crore. Traders were also worried with private report that while the monsoon in India is tracking at 11% above normal, the distribution is uneven across the country and could pose a threat to this year’s foodgrain production and may worsen the inflation outlook.
Nifty futures opened at 16635.10 points against the previous close of 16632.10 and opened at a low of 16475.15 points. Nifty Future closed with an average movement of 159.95 points and a decline of around 152.50 points and 16479.60 points...!!
On the NSE, the midcap 100 index will decline 1.25% and smallcap 100 index is closing decline 1.48%. Speaking of various sectoral indices, the NSE saw gains in only Media stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, August gold opened at Rs.50598, fell from a high of Rs.50705 points to a low of Rs.50501 with a rise of 33 points, a trend of around Rs.50569 and July Silver opened at Rs.54610, fell from a high of Rs.54846 points to a low of Rs.54320, with a rise of 34 points, a trend of around Rs.54441.
Meanwhile, Crisil Ratings in its latest report has said that India's diamond industry is likely to witness 15-20 per cent decline in revenue in this financial year (FY23) due to falling demand and rising prices of rough gemstone globally. It said revenue of the Indian diamond industry is set to be cut 15-20 per cent to $19-20 billion this fiscal, compared with a decadal high in the last financial year, following a double blow from falling demand and rising prices of roughs across the globe.
The report stated that while volatility in rough diamond prices is typically passed on to the polished diamond prices -- albeit with a lag due to the long operating cycle in the trade -- tepid demand has kept polished prices from fully catching up with rough prices this time around. This could squeeze the operating profitability of Indian diamond polishers by 75-100 basis points to 4-4.25 per cent this fiscal. Accordingly, interest coverage may weaken marginally.
According to the report, a surge in Covid-19 cases has led to lockdowns in several regions in China, which is one of the largest consumers of Indian polished diamonds. Further, it noted that inflation and opening up of other avenues of discretionary spending such as travel and hospitality will dampen demand growth in the US and Europe in the near term. As for prices, the US sanctions on Russian diamond mining company Alrosa following the invasion of Ukraine has cut supplies of rough diamonds by almost 30 per cent.
Technically, the important key resistances are placed in Nifty future are at 16505 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 16575 – 16606 levels. Immediate support is placed at 16434 – 16373 levels.
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