Trends in SGX Nifty indicate a gap-down opening for Indian indices. Indian markets could open lower in line with negative Asian markets today and sharply lower US markets on Tuesday, said Deepak Jasani, Head-Retail Research, HDFC Securities.
Nifty broke a two day losing streak on April 26 becoming the best performing index in the Asian region. At close Nifty was up 1.46 percent or 246.9 points at 17,200.
Nifty rose with an upgap on April 26 and in the process made a bullish island reversal pattern. It is important for the Nifty not to go below 17,054 so that the bullishness of the pattern is not negated. Low volumes accompanied by positive advance decline ratio means that FPIs were not aggressive on the sell side but at the same time local traders chose to focus more on the large and midcaps. 17,009-17,315 could be the band for the Nifty in the near-term, Jasani added.
The market is seen heading southward in early trades much in tandem with the rout in other global indices amid concerns about global economic growth stemming from China, said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd.. As on date, the world economy once again finds itself in a problematic position due to growth concerns amidst renewed COVID surge in China and Russia’s Ukrainian invasion. "Our call of the day suggests Nifty may trade volatile with interweek support seen only at 16597 mark. Intraday support for the index is seen at the psychological 17000 mark. To regain momentum on the buy side, Nifty needs to stay above its 200-DMA at 17207 mark," Tapse added.
Mohit Nigam, Head - PMS, Hem Securities said, markets are likely to get gap-down opening as an uptick in oil prices and the Russia-Ukraine conflict continued to weigh on market sentiment. Traders may take note of Acting Director of the IMF's Asia and Pacific Department stating that the surge in oil prices due to the Ukrainian war has pushed up inflation in India, which needs monetary tightening and measures to address structural weaknesses to improve growth potential.
There will be some reaction in edible oil industry stocks with private report that India's palm oil imports in May are set to rise above 600,000 tonnes despite the restriction imposed by Indonesia.
Back home, Bulls made come back after two days of continuous drubbing as traders opted to buy beaten down but fundamentally strong stocks. Key gauges made a gap up opening taking encouragement with CII President TV Narendran’s statement that India’s economy is expected to grow 7.5-8 percent this fiscal year with exports playing a key role in the country’s success story. Some support also came with report that India and the EU will return to the negotiating table to start serious talks for a free trade agreement (FTA) in June after a gap of nine years.
On technical front, Nifty50 may take support at 17,200 levels and may face resistance at 17,450 levels. In case of Bank Nifty immediate support and resistance levels are 36,000 and 36,850 level respectively, Nigam added.
On April 26, at close, the Sensex was up 776.72 points or 1.37 percent at 57,356.61. The broader Nifty was up 246.80 points or 1.46 percent at 17,200.80.
Asian stocks decline
Asian stocks declined on Wednesday amid mixed corporate earnings, worries that Russia may choke gas flows to Europe, China’s pandemic struggles and the prospect of aggressive Federal Reserve monetary tightening
US stocks close sharply lower
US stock benchmarks ended sharply lower Tuesday, with the Nasdaq Composite booking its lowest close since 2020, as investors sifted through a raft of company results and awaited earnings reports that came after the bell from tech giants, including Microsoft Corp. and Google parent Alphabet Inc. China's COVID-19 curbs and fears of aggressive U.S. Federal Reserve tightening continued to damp risk appetite. The CBOE Volatility Index jumped to around 33 on Tuesday. The yield on the 10-year US Treasury note fell 5.2 basis points to 2.773 percent.
Direct tax collection registers 49.02% growth
India’s net direct tax collection has registered a whopping 49.02 percent growth to over Rs 14.09 lakh crore in the 2021-22 fiscal as the country’s economy “bounced back” after being hit by the COVID-19 pandemic.
LIC IPO price band set at Rs 902-Rs 949
The price band for the initial public offering of Life Insurance Corporation of India (LIC) has been set at Rs 902 to Rs 949, with a discount of Rs 60 for policyholders, as per reports. For retail and employees, the discount will be of Rs 40. The IPO is set to open on May 4, and is likely to close on May 9. The IPO could raise as much as 210 billion rupees ($2.7 billion) at the top end of the price range. That’s far lower than the 500 billion rupees targeted earlier.
China's industrial profits up
China’s industrial profits rose 8.5 percent year-on-year in the January-March period.
Crude prices up
Oil prices were trading up on Tuesday after Monday's brief selloff, as China's central bank promised to provide monetary policy support to its economy after the lockdown. The price moves remain a testament to the hyper volatility that exists in the market post covid and post-Russian invasion.
In international markets, crude oil prices were again more than 5 percent, as WTI crude settled at $101.70 per barrel and Brent settled at $105.13 per barrel. Domestic markets also settled on a positive note at Rs 7,869 per barrel, up by 5.64 percent. Crude oil prices also showed strength amid escalating tensions between Russia-Ukraine. Russian foreign minister also warned western countries for supporting Ukraine. Natural gas prices also gained and crossed $7 per BTU on Tuesday on supply concerns from Russia which is supporting natural gas prices.
However, concerns about demand weighed on futures, as authorities in Beijing raced to stamp out a nascent COVID-19 outbreak and avert the same debilitating city-wide lockdown that has shrouded Shanghai for a month.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd. said, "We expect crude oil prices to remain volatile in today’s session. Crude oil is having support at $98.20-$95.40 and resistance is at $102.50–105.10, In INR terms crude oil has support at Rs 7,550-7,380, while resistance is at Rs 8,050–8,174".
On Tuesday, Gold and silver prices were modestly higher and are back above $1,900.00, $23.50 respectively as the bulls bounced back after the recent downdraft that saw the market hit a nine-week low on Monday. Shortcovering in the futures market and some perceived bargain hunting in the cash market were featured. Gold and silver bulls still have more work to do to break the near-term price downtrend lines that are now in place on the daily bar charts. In international gold futures were up $6.50 at $1,902.50 while silver was down $0.125 at $23.545 an ounce. In domestic market also gold was up by Rs 176 at Rs 51,569 and silver was down by Rs 166 at Rs 64950.
Gold and silver gained in the early trading session on Tuesday but prices loss its early morning gain after better than expected US durable goods orders and core durable goods orders data. After good US data dollar index extended its gain and put more pressure on bullion.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd said, Gold has support at $1,888-1876, while resistance at $1,914-1928. Silver has support at $23.31-23.07, while resistance is at $23.88-24.10. In INR terms, gold has support at Rs 51,220–50,960 while resistance is at Rs 51,820–52,050. Silver has support at Rs 64,620- 64,365 while resistance is at Rs 65,650–66,050.
USDINR dropped as easing of oil prices, inflows into local stocks and anticipated LIC IPO related inflows created rupee demand. On the daily technical chart, a pair is trading above its resistance level of 76.35. Rahul Kalantri, VP Commodities, Mehta Equities Ltd said, "We expect a pair continue to hold its key support level of 76.0600 on a daily closing basis. We suggest buying in the pair on dips around 76.3500 with a stop loss of 76.0500 on a daily closing basis for the targets of 76.7000-76.8500".
The following companies will release their quarterly earnings today (April 27): Hindustan Unilever, Bajaj Auto, HDFC Asset Management Company, Hatsun Agro Product, Indian Energy Exchange, 5paisa Capital, Indian Hotels Company, Persistent Systems, Syngene International, Trent, Mahindra Lifespace Developers, Chennai Petroleum Corporation, KPR Mill, MPL Plastics, Shree Digvijay Cement, Supreme Petrochem, and Swaraj Engines.
(With inputs from Reuters)