Dear Trader…
Indian equity bourses extended their fall for the sixth straight session on Friday, largely taking cues from the global markets, in absence of any major domestic event. After the tepid start, the benchmarks continued trade with volatility till the end amid unabated foreign fund outflows, and rising crude oil prices. As per exchange data, foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 3,257.65 crore on Thursday. Traders got anxious as referring to economic crisis in Sri Lanka, a Reserve Bank article said states are showing warning signs of building stress, and the 5 most indebted ones -- Punjab, Rajasthan, Bihar, Kerala and West Bengal -- need to take corrective measures by cutting down expenditure on non-merit goods.
However, losses remain capped as some support came with a periodic labour force survey by the National Statistical Office (NSO) showed the unemployment rate for persons aged 15 years and above in urban areas dipped to 8.2 per cent in January-March 2022 from 9.3 per cent in the year-ago quarter. Some support also came in as advance tax paid by companies in the first quarter of the fiscal year grew 46 per cent over that in the equivalent period in 2021-22, indicating healthy tax buoyancy that will provide the government the cushion to absorb part of the higher subsidy bill.
Nifty futures opened at 15305.10 points against the previous close of 15348.55 and opened at a low of 15211.65 points. Nifty Future closed with an average movement of 216 points and a decline of around 0.25 points and 15348.80 points...!!
On the NSE, the midcap 100 index will decline 1.16% and smallcap 100 index is closing decline 0.80%. Speaking of various sectoral indices, the NSE saw gains in only PVT Bank, Bank, Financial Services, Media and Metal stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, August gold opened at Rs.50977, fell from a high of Rs.51145 points to a low of Rs.50881 with a rise of 114 points, a trend of around Rs.51100 and July Silver opened at Rs.61415, fell from a high of Rs.61720 points to a low of Rs.61311, with a rise of 73 points, a trend of around Rs.61600.
Meanwhile, RBI Deputy Governor M Rajeshwar Rao has said despite the improvement in asset quality, financial institutions, including banks, need to proactively undertake stress testing of loan books to examine their loss absorption limits and take steps to improve them wherever required. Rao stated the gross non-performing assets (GNPAs) and net NPAs of banks improved to 5.97 per cent and 1.7 per cent as of March 31, 2022, from 9.23 per cent and 3.66 per cent as of September 2019, respectively.
He noted although the asset quality has improved from the pre-pandemic levels, lenders should ascertain whether this is on account of better fundamentals or due to the regulatory support extended to deal with the impact of the pandemic. He said while the central bank has attempted to combat the impact of the pandemic on the financial system, (but) the task is only half done.
Technically, the important key resistances are placed in Nifty future are at 15373 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 15404 – 15474 levels. Immediate support is placed at 15272 – 15202 levels.
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