Dear Trader…
Indian equity benchmarks continue to trade flat in negative terrain in noon session, with Sensex and Nifty trading below their psychological levels of 57100 and 17000, respectively. Significant foreign fund outflows, concerns about aggressive interest rate hikes by global central banks, and potential global recession fears have impacted traders’ sentiments. Foreign Institutional Investors (FIIs) were stood net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,823.96 crore, exchange data showed. Depreciating rupee too added some pressure on the markets.
However, downfall remain capped as Economic affairs secretary Ajay Seth dismissed the concerns over depletion of forex reserve as overblown and said India has fairly large reserve to tide over the current situation. On the global front, Asian markets were trading mostly lower as surging borrowing costs intensified fears of a global recession.
Nifty futures opened at 16863.05 points against the previous close of 17018.65 and opened at a low of 16833.70 points. Nifty Future closed with an average movement of 199.30 points and a decline of around 180.55 points and 16838.10 points...!!
On the NSE, the midcap 100 index will decline 0.31% and smallcap 100 index is closing decline 0.54%. Speaking of various sectoral indices, the NSE saw gains in only Auto and Pharma stocks saw gains on the NSE, while all other sectoral indices also closed lower.
At the start of intra-day trading, October gold opened at Rs.49160, fell from a high of Rs.49390 points to a low of Rs.48980 with a rise of 52 points, a trend of around Rs.49371 and December Silver opened at Rs.55200, fell from a high of Rs.55275 points to a low of Rs.54355, with a decline of 132 points, a trend of around Rs.55247.
Meanwhile, India Ratings and Research (Ind-Ra) has upgraded its outlook on non-banking finance companies (NBFCs) and housing finance companies (HFCs) to ‘neutral’ from ‘improving’ on better collection efficiencies and asset growth in the sector. However, it said that liability management is key for managing margins and loan growth for NBFCs and HFCs. It also said with the onset of normalcy in lending, the on-balance sheet liquidity would also normalise, negating the impact of the rising cost of funds, thereby protecting margins to a certain extent.
In the mid-year outlook on the sector, Ind-Ra said that a lower credit cost for 2HFY23 would aid profitability during the fiscal. Higher inflationary pressure on borrowers and interest rates may deter demand normalisation in the near term but the festive season demand could support the baseline credit offtake. On the securitisation front, a major source of balance sheet management for lenders, the agency said it has witnessed a strong asset performance in the first half of FY23, which leads it to give a 'stable' rating outlook for outstanding transactions in the second half of the fiscal. It expects securitisation volumes to reach pre-COVID levels, subject to stabilised market sentiments.
Technically, the important key resistances are placed in Nifty future are at 16888 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 16939 – 17007 levels. Immediate support is placed at 16737 – 16676 levels.
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