Dear Trader…
Snapping four-day falling streak, Indian equity benchmarks finished a choppy session higher by over half percent on Friday on renewed buying interest from foreign funds and firm global trends. Key gauges made optimistic start and stayed in green for most part of the day, as sentiments got some support with the government data showed India's overall exports, merchandise and services combined, rose to $64.91 billion in June 2022, registering a year-on-year growth of 22.95 per cent. For the April-June 2022 period, the overall exports stood at $189.93 billion, exhibiting a positive growth of 25.16 per cent over the same period last year.
However, markets trimmed most of their initial gains in afternoon deals, as some concern came with the Finance Ministry in its monthly economic review report has said that India's current account deficit is likely to deteriorate in the current fiscal (FY23) on account of costlier imports and tepid merchandise exports. The review also said that global headwinds would continue to pose a downside risk to growth as crude oil and edibles, which have driven inflation in India, remain major imported components in the consumption basket.
Nifty futures opened at 15989.95 points against the previous close of 15932.55 and opened at a low of 15930.30 points. Nifty Future closed with an average movement of 153.60 points and a rise of around 141.45 points and 16074.00 points...!!
On the NSE, the midcap 100 index will rise 0.77% and smallcap 100 index is closing rise 0.34%. Speaking of various sectoral indices only Metal, PSU Bank and IT stocks were seen selling on the NSE, while all other sectoral indices closed higher.
At the start of intra-day trading, August gold opened at Rs.50262, fell from a high of Rs.50280 points to a low of Rs.49970 with a decline of 79 points, a trend of around Rs.50149 and September Silver opened at Rs.55174, fell from a high of Rs.55319 points to a low of Rs.54533, with a rise of 221 points, a trend of around Rs.55256.
Meanwhile, Fitch Ratings has said mounting repayment pressure for some borrowers, particularly micro, small and medium-sized enterprises, amid India's interest rate hikes will test banks' loan underwriting quality. However, it stated asset-quality risks from higher rates should generally be moderate for most banks.
It underlined that higher rates will also affect securities valuations and could make it harder for banks to raise fresh capital, particularly at state banks, although wider net interest margins (NIM) will have offsetting positive credit effects.
It mentioned ‘We expect rates to rise further, reaching 5.90 per cent by end-2022 and 6.15 per cent by end-2023, then remaining at this level through 2024’.it added banks have been quick to pass on higher rates through loan portfolios, which are mainly floating in nature but have been slower in raising deposit rates. Moreover, it said this trend should support higher NIM, but the lack of competition for deposits may point to relatively muted demand for new credit. The Reserve Bank of India (RBI) raised policy interest rates by 50 bps to 4.90 per cent in June.
Technically, the important key resistances are placed in Nifty future are at 16106 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 16160 – 16202 levels. Immediate support is placed at 15808 – 15676 levels.
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