Dear Trader…
Domestic equities succumbed to weakness in global markets as investors’ fret over the Federal Reserve’s stress on the tightening of the monetary policy to tame inflation. Nifty opened lower and traded in negative territory throughout the session to close with loss of 75 points at 17801 levels. All sectorial indices ended in red with PSU Bank, Realty and IT down 1-2% each. Volatility index, India VIX rose by 8% to 13.7 levels.
We expect market to remain lackluster as investors await key economic data on global as well as domestic front to provide some clear direction. Domestic CPI data to be announce today post market, while US would release its monthly CPI data on Tuesday along with Europe’s GDP numbers. Auto and Capital goods stocks likely to do well on back of good quarterly results.
Nifty futures opened at 17852.05 points against the previous close of 17877.10 and opened at a low of 17745.00 points. Nifty Future closed with an average movement of 155.50 points and a decline of around 75.25 points and 17801.85 points...!!
On the NSE, the midcap 100 index will decline 1.50% and smallcap 100 index is closing decline 1.45%. Speaking of various sectoral indices, the NSE saw gains in only FMCG stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, April gold opened at Rs.56762, fell from a high of Rs.56920 points to a low of Rs.56502 with a rise of 33 points, a trend of around Rs.56774 and March Silver opened at Rs.66275, fell from a high of Rs.66583 points to a low of Rs.66160, with a decline of 224 points, a trend of around Rs.66440.
Meanwhile, Credit rating agency ICRA on Monday said the inflation-linked toll hike should be relatively modest at 2-5 per cent in FY24 as compared to 8.7-14.6 per cent last fiscal. ICRA has revised the outlook on the toll road sector to stable from positive for FY24. "In the backdrop of easing WPI inflation to 4.95 per cent in December 2022 and an expected WPI inflation of sub-2 per cent in March 2023, the inflation-linked toll hike should be relatively modest at 2-5 per cent in FY2024 compared to the 8.7-14.6 per cent toll rate hike in FY2023," ICRA said. According to ICRA, the change in outlook to stable primarily reflects the expected moderation in toll collection growth to 6-9 per cent in FY2024, compared to a stellar 17-20 per cent growth witnessed in FY2023.
The strong growth in toll collections in FY2023 was driven by a healthy toll rate increase on the back of high inflation as well as improved economic activity. "Toll rates for projects which are linked to December WPI would witness a 5 per cent growth while the toll rates for projects linked to March WPI will witness a sub-2 per cent growth. Consequently, the toll collection growth in FY2024 is estimated at 6-9 per cent, primarily supported by 4 per cent-5 per cent growth in traffic," Vinay Kumar G, Sector Head, Corporate Ratings said. Despite the moderation in toll collection growth, lower outflow towards O&M and major-maintenance expense on account of the recent moderation in key commodity prices, especially bitumen and steel, should support the debt coverage metrics for BOT toll road assets, he added.
Technically, the important key resistances are placed in Nifty future are at 17880 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 17939 – 18008 levels. Immediate support is placed at 17707 – 17676 levels.
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