Deepak Jasani, Head-Retail Research, HDFC Securities, said that Indian markets may open flat today despite largely Asian markets and on Tuesday, despite slight positivity in US markets.
Major domestic benchmark indices may register gains in early trade, tracking a rise in other Asian gauges, but volatility will continue amid rising inflation levels, US bond yields and uncertainty on the back of fresh jump in oil prices. Prashant Taapsee, Vice President (Research), Mehta Equities Ltd. said, “Market volatility could be a theme in today’s trading session as Dalal Street heads for a long weekend.
Stock selection is likely to be more important because investors need to differentiate which companies are most affected by rising costs, and which ones have the potential to pass those higher costs through to consumers and maintain their profit margins. For pricing power.
The focus will also be on Infosys’ fourth quarter results which will be the biggest catalyst for the day. Street Management will spy commentary with a big eye — primarily on future outlook, attrition rates and deal momentum.
Compared to other global markets, Nifty closed for the second consecutive session on April 12 with a fall. Nifty closed 0.82 per cent or 144.7 points lower at 17,530.3.
After falling the gap-down, Nifty has formed a hammer-like pattern after the fall, which indicates the possibility of an upside reversal. The forward drawdown ratio fell significantly below 1:1, which suggests broad based profit taking in the markets. Nifty may remain in the band 17,405-17,601 in the short term.
Mohit Nigam, PMS Head, Hem Securities said, “As per the trends in SGX Nifty, benchmark indices are expected to open on a flat to positive note. US stock markets ended lower on Tuesday as investors react to inflation data, as US inflation jumped 8.5 percent in the past year, the highest since 1981. The Dow Jones was down 87.4 points, while the NASDAQ was down 0.36 percent at 13,940.0.
On the technical front, 17,400 and 17700 are immediate support and resistance in Nifty 50. 37200 and 38000 are immediate support and resistance respectively for Bank Nifty.
Infosys, Den Networks and Lesha Industries to release quarterly results today
Asian stocks rise
Asian stocks and US equity futures rose on Wednesday, while Treasuries fell as investors calibrated economic risks from inflation.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent and Japan’s Nikkei rose 1.54 per cent. In Asia trade, S&P500 futures were up 0.2 per cent and Nasdaq futures were up 0.57 per cent.
Asian markets are trading on the positive side as investors watch the market’s reaction to slightly warmer than expected US inflation. Nikkei is trading with a gain of 0.55 percent and Topix index 0.39 percent.
Chinese blue chips shares fall
Chinese blue chips fell 0.7 per cent and Hong Kong lost 0.2 per cent. They changed little from Wednesday’s customs data, which showed China’s exports in yuan terms grew 13.4 percent year-on-year in January-March, while imports grew by 7.5 percent. China on Wednesday reported 26,525 new asymptomatic coronavirus cases and 1,513 symptomatic cases.
US stocks fall
US shares ended marginally lower on Tuesday, erasing earlier gains, as investors questioned whether the sharpest rise in the consumer price index in more than 40 years was at the peak of inflation.
The Labor Department reported Tuesday that US consumer prices rose 1.2 percent in March. Year over year, prices rose 8.5% – the fastest pace since January 1982.
The core price increase slowed to a 0.3 percent monthly increase versus a 0.5 percent increase. That still pushed the year-over-year rate to a 40-year high of 6.5 percent.
The Treasury Department said on Tuesday that the US federal budget deficit narrowed sharply to $192.7 billion in March from $659.6 billion in the same month last year. Last March, the government was still sending payments to Americans as part of the last stimulus package during the pandemic.
India Industrial Growth Up
According to the Index of Industrial Production (IIP), India’s industrial growth accelerated to 1.7 per cent in February, from 1.5 per cent in January. Although industrial output grew at a higher rate in February than in January, the rate of expansion has remained subdued. The manufacturing sector, which makes up three-fourths of IIP, grew just 0.8 per cent in February, from 1.3 per cent in the first month of 2022.
While growth in capital goods output slowed to 1.1 per cent on a year-on-year basis from 1.4 per cent in January, consumer durables and non-durables saw contraction compared to the same month last year.
Retail inflation at 17-month high
India’s retail inflation rose to a 17-month high of 6.95 per cent in March from 6.07 per cent in February, driven by rise in food prices. Fuel prices, which were raised at the end of March, are not fully included in the current figures, suggesting that inflation may remain high. Core inflation, excluding food and fuel, rose to 6.53 per cent in March from 6.22 per cent in February.
This is the highest since June 2014.
Private Sector Capital Expenditure Cycle to See Revival
Emphasizing on the possibility of improvement in the economic situation during the year, Chief Economic Adviser V Ananth Nageswaran on Tuesday expressed hope that capital expenditure from the private sector is expected to pick up from the second half of the current fiscal.
Investment from the private sector has been muted for the past several years, despite several measures taken by the government to rejuvenate it, including a cut in corporate tax.
Crude prices rise
On Wednesday, Brent crude futures rose 0.38 percent to $105.09 and US West Texas Intermediate rose 0.55 percent to $101.12.
Oil prices rose higher on Tuesday as lockdowns were eased in Shanghai and Russian oil and gas condensate production fell to 2020 lows and OPEC warned it would be impossible to reverse a potential supply loss from Russia.
WTI crude futures on Tuesday jumped more than 7 per cent to reach above $100 a barrel, recovering from a fall of 4 per cent in the previous session, the domestic market also gained 6.55 per cent on relief on demand and to strengthen at Rs 7646 per barrel. Some virus restrictions were eased after Shanghai in China closed down.
In addition, OPEC warned that a possible embargo from the EU would make it nearly impossible to replace lost Russian oil. The European Union is reportedly drafting proposals for an oil embargo on Russia, although no agreement was reached to impose sanctions on Russian crude. Meanwhile, the cartel cut forecasts for both global oil consumption and supply this year. Crude oil prices are also finding support as US natural gas futures hit a more than 13-year high, their highest since 2008 due to short supplies from Russia.
Rahul Kalantri, VP-Commodities, Mehta Exports said, “We expect crude oil prices to remain volatile in today’s session, crude is finding support at $98.10-$95.50 and resistance at $102.40-104.50, In INR terms, crude oil has support at Rs 7,540-7,380, while resistance lies at Rs 7,840-7,980.”
Treasury yields rose for the fifth consecutive day after key US inflation data largely beat expectations, reducing the likelihood of a long-term aggressive policy tightening by the Federal Reserve. Gold June futures contract rose 1.43 per cent to $1,976.10 per troy ounce and silver May futures contract rose 2.98 per cent to $25.73 an ounce.
Domestic markets also closed with a positive trend. The rise in crude oil and natural gas prices also contradicts the world growth story which is supportive of bullion. Despite inflation being warmer than expected in March, some economists believe the first month of spring will peak under price pressure.
Gold and silver saw good gains in the first two days of the week; They appeared to break out and reverse the trend. Rahul Kalantri, VP-Commodities, Mehta Equities said, “We expect gold and silver to maintain their positive momentum, but may see low liquidity ahead of the long weekend break.
Gold has support at $1948-1930, while resistance is at $1982-2000. Silver has support at 25.10- 24.82, while resistance lies at $25.84-26.05. 69,100-69,440 at Rs.
The USDINR April 27 futures contract again broke its key resistance level of 76.06 on a daily close basis. The pair is trading above its resistance level of 75.85 on the daily technical chart. Going by the daily technical chart, we see that a pair is forming above the 75.85 level and the technical chart is showing positive momentum. “Looking at the technical set-up, if a pair sustains above 76.06, it may show further strength towards 76.40-76.55 in the coming sessions,” said Rahul Kalantri, VP-Commodities, Mehta Exports.