Dear Trader…
Indian equity benchmarks ended lower for the second straight day in choppy trade on Wednesday, amid selling in frontline bluechip counters. Initially, benchmarks traded in a narrow band with a negative bias, as traders got anxious as Fitch Ratings has kept India's sovereign rating unchanged at 'BBB-' with a negative outlook. It stated that the rating balances a still-strong medium-term growth outlook and external resilience from solid foreign-reserve buffers against high public debt, a weak financial sector and some lagging structural issues.
However, key gauges recouped initial losses to trade marginally in green in afternoon deals, as traders took some support with Commerce and Industry Minister Piyush Goyal’s statement that India attracted ‘record’ foreign direct investments (FDI) in the last seven years and this trend is expected to continue in the coming years as well on account of major structural reforms being undertaken by the government. Though, markets failed to hold recovery and extended losses in late afternoon trading tracking weakness across other Asian markets.
Nifty futures opened at 17934.00 points against the previous close of 18004.00 and opened at a low of 17894.35 points. Nifty Future closed with an average movement of 134.45 points and a decline of around 107.00 points and 17897.00 points...!!
On the NSE, the midcap 100 index will decline 0.67% and smallcap 100 index is closing rise 0.13. Speaking of various sectoral indices, the NSE saw gains in Auto, Media, IT, PSU Bank and FMCG stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, December gold opened at Rs.49068, fell from a high of Rs.49162 points to a low of Rs.48985.00 with a rise of 53 points, a trend of around Rs.49091 and December Silver opened at Rs.66329, fell from a high of Rs.66675 points to a low of Rs.66255, with a rise of 266 points, a trend of around Rs.66500.
Meanwhile, Fitch Ratings has kept India's sovereign rating unchanged at 'BBB-' with a negative outlook. It stated that the rating balances a still-strong medium-term growth outlook and external resilience from solid foreign-reserve buffers against high public debt, a weak financial sector and some lagging structural issues. It said the country's rapid economic recovery from the Covid-19 pandemic and easing financial sector pressures are narrowing risks to the medium-term growth outlook.
However, the negative outlook on the rating reflects lingering uncertainty around the medium-term debt trajectory, particularly given India's limited fiscal headroom relative to rating peers. It mentioned ‘We forecast robust GDP growth of 8.7 per cent in the fiscal year ending March 2022 (FY22) and 10 per cent in FY23 (ending March 2023), supported by the resilience of India's economy, which has facilitated a swift cyclical recovery from the Delta Covid-19 variant wave in 2Q21.’
Besides, it stated ‘the potential remains for a resurgence in coronavirus cases, though we anticipate the economic impact of further outbreaks would be less pronounced than previous surges, particularly given the sustained improvement in the Covid-19 vaccination rate, which has now surpassed 1 billion doses administered.’
Technically, the important key resistances are placed in Nifty future are at 17933 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 17989 – 18008 levels. Immediate support is placed at 17808 – 17770 levels.
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