Dear Trader…
Indian equity benchmarks traded volatile and ended lower for the second consecutive session on Wednesday, amid worsening geopolitical situation in Europe. Moreover, rising bond yields in the debt market also soured markets mood. Benchmark indices made a cautious start, as traders were concerned with the government data showed that India’s economic growth hit a four-quarter low of 4.1%, partly driven by base effect. The growth was 20.1%, 8.4%, and 5.4%, in the first, second and third quarters, respectively.
Key gauges managed to trade in green in afternoon deals, as a monthly survey said that India's manufacturing sector growth steadied in May, with new orders and production increasing at similar rates to those registered in the previous month, while demand showed signs of resilience and improved further despite another uptick in selling prices. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) stood at 54.6 in May, little changed from 54.7 in April, pointing to a sustained recovery across the sector. But, after the initial uptick, the benchmark drifted gradually lower, amid reports that India's annual per capita income at constant prices remained below the pre-COVID level at Rs 91,481 in 2021-22.
Nifty futures opened at 16550.00 points against the previous close of 16577.60 and opened at a low of 16425.10 points. Nifty Future closed with an average movement of 214.90 points and a decline of around 47.95 points and 16529.65 points...!!
On the NSE, the midcap 100 index will rise 0.04% and smallcap 100 index is closing rise 0.28%. Speaking of various sectoral indices, the NSE saw gains in PSU Bank, PVT Bank, Bank, Financial Services and Metal stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, June gold opened at Rs.50654, fell from a high of Rs.50654 points to a low of Rs.50462 with a decline of 335 points, a trend of around Rs.50520 and May Silver opened at Rs.60752, fell from a high of Rs.61200 points to a low of Rs.60502, with a rise of 40 points, a trend of around Rs.61165.
Meanwhile, Chief Economic Adviser (CEA) V Anantha Nageswaran has ruled out the risk of stagflation for India, saying the economy is better placed than other nations. Stagflation is the phase when an economy faces moderation in GDP growth as well as high inflation. He stated that ‘Compared to the experience of many developed and developing countries, India is somewhat better placed and more importantly both central bank and the government are seized of the problem under addressing them. I would at this stage say that stagflationary risks for India are quite low compared to the rest of the world.’
The Indian economy grew at its slowest pace in a year during January-March at 4.1 per cent, pulling down the GDP growth in the full fiscal 2021-22 to 8.7 per cent. On the sequential low growth, Nageswaran said it is because of the Omicron wave that the nation experienced in January. He pointed out considering the fears and concerns expressed by many, the year-on-year growth rate at 4.1 per cent indicating that the momentum is intact and if you look at April numbers on GST, etc, there is considerable momentum in economic activity.
Technically, the important key resistances are placed in Nifty future are at 16606 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 16676 – 16707 levels. Immediate support is placed at 16474 – 16404 levels.
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