Dear Trader…
Indian equity benchmarks closed near their intraday low points, on the back of mixed cues from other Asian markets along with selling in Auto and Telecom stocks. Traders got cautious amid a private report stating that India's fast-depleting foreign exchange reserves are likely to drop more than was predicted just a month ago by end-2022 as the Reserve Bank of India will continue to shield the rupee from the dollar's strength.
The street overlooked report that credit to industries in September 2022 grew at the fastest pace it has grown in the last 100 months, aided primarily by a pick-up in working capital loans from corporates. Traders also paid no heed towards RBI governor Shaktikanta Das’ statement that India today presents a picture of resilience and optimism for the world.
Nifty futures opened at 18227.00 points against the previous close of 18211.20 and opened at a low of 18117.05 points. Nifty Future closed with an average movement of 112.40 points and a decline of around 68.60 points and 18142.60 points...!!
On the NSE, the midcap 100 index will decline 0.08% and smallcap 100 index is closing decline 0.12%. Speaking of various sectoral indices, the NSE saw gains in only Media, Pharma, Metal, Healthcare and Oil & Gas stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, October gold opened at Rs.50560, fell from a high of Rs.50833 points to a low of Rs.50550 with a rise of 301 points, a trend of around Rs.50803 and December Silver opened at Rs.58999, fell from a high of Rs.59263 points to a low of Rs.58742, with a rise of 353 points, a trend of around Rs.59199.
Meanwhile, the government has cut the windfall tax on domestically produced crude oil to Rs 9,500 per tonne from Rs 11,000 per tonne earlier, while increasing the rate on export of diesel and jet fuel (ATF) in line with rise in international oil prices.
In the fortnightly revision of windfall tax, the government has hiked the rate on export of diesel to Rs 13 per litre from Rs 12 per litre. The levy on jet fuel too was increased to Rs 5 a litre, from Rs 3.50. The levy on diesel includes Rs 1.50 per litre road infrastructure cess (RIC). When the levy was first introduced, a windfall tax on export of petrol alongside diesel and ATF too was levied. But the tax on petrol was scrapped in subsequent fortnightly reviews.
While the windfall profit tax is calculated by taking away any price that producers are getting above a threshold, the levy on fuel exports is based on cracks or margins that refiners earn on overseas shipments. These margins are primarily a difference of international oil price realised and the cost. India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super normal profits of energy companies.
At that time, export duties of Rs 6 per litre ($12 per barrel) each were levied on petrol and aviation turbine fuel and Rs 13 a litre ($26 a barrel) on diesel. A Rs 23,250 per tonne ($40 per barrel) windfall profit tax on domestic crude production was also levied. The duties were partially adjusted in the previous rounds on July 20, August 2, August 19, September 1, September 16, October 1 and October 16.
Technically, the important key resistances are placed in Nifty future are at 18303 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 18404 – 18474 levels. Immediate support is placed at 18108 – 18088 levels.
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