Dear Trader…
Indian equity benchmarks edged lower by over half percent on Wednesday, following intense selling in Power Grid, Indusind Bank and Reliance Industries taking cues from subdued trading in other Asian markets. Sentiments were weighed by caution in global peers ahead of the US Federal Reserve’s interest rate decision.
Traders were also worried as global forecasting firm Oxford Economics said retail inflation spike in May might cause the RBI to revisit its focus on growth risks, adding that a rate hike is still unlikely this year. It stated that the underlying dynamics of the May inflation print augur caution and the recovery remains on uncertain ground and with fiscal support in retreat, the RBI will likely be hesitant to remove policy accommodation anytime soon.
Nifty futures opened at 15859.00 points against the previous close of 15879.00 and opened at a low of 15766.15 points. Nifty Future closed with an average movement of 118.85 points and a decline of around 102.15 points and 15776.85 points .. !!!
On the NSE, the midcap 100 index will decline 0.93% and smallcap 100 index is closing decline 0.52%. Speaking of various sectoral indices, the NSE saw gains in FMCG and IT stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, august gold opened at Rs.48458, fell from a high of Rs.48564 points to a low of Rs.48367, with a rise of 43 points, a trend of around Rs.48467 and July Silver opened at Rs.71500, fell from a high of Rs.71750 points to a low of Rs.71444, with a rise of 440 points, a trend of around Rs.71688..!!
Meanwhile, global forecasting firm Oxford Economics has said retail inflation spike in May might cause the RBI to revisit its focus on growth risks, adding that a rate hike is still unlikely this year. It stated that the underlying dynamics of the May inflation print augur caution and the recovery remains on uncertain ground and with fiscal support in retreat, the RBI will likely be hesitant to remove policy accommodation anytime soon.
It said that given the evidence from last year, when supply side disruptions had led to an unanticipated spike in inflation, such developments may partly be attributed for the inflation pick-up in May. However, it said ‘as we have highlighted, the 2021 lockdowns are not as stringent; and have allowed for greater movement of people, goods and vehicles. This suggests that other factors, such as the passthrough from WPI (Wholesale Price Index) to CPI (Consumer Price Index) and demand-side pressures, are at play as well.’
It mentioned the April industrial production growth print surprised to the upside. It said positive base effects notwithstanding; industrial production grew 1.1 per cent month-on-month seasonally adjusted in April after rising 2.2 per cent in March. This was led by continued expansion of manufacturing output.
Technically, the important key resistances are placed in Nifty future are at 15776 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 15888 – 15909 levels. Immediate support is placed at 15707 – 15630 levels.
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