Trends on SGX Nifty indicate a negative opening for the broader index in India. Indian markets could open lower in line with mostly negative Asian markets today and mixed US markets on Friday, said Deepak Jasani, Head-Retail Research, HDFC Securities.
Nifty snapped a three day losing streak and ended higher on April 8 after RBI's monetary policy committee kept the key rates unchanged. At close, Nifty was up 0.82 percent or 144.8 points at 17,784.3.
Nifty rose for the second week in a row though formed a doji after a rise on weekly charts suggesting caution at higher levels. Q4 results season will start from Monday and the market’s focus will shift to individual stocks. The RBI has turned mildly hawkish and this could impact the valuations in the markets over time. Nifty could now take support from 17,522-17,560 band and face resistance from 17900-17921 band over the next few days, Jasani added.
This week is a holiday-shortened one but it's going to be critical as it kickstarts the earnings season with two IT majors, TCS and Infosys announcing numbers.
Benchmark Indices are expected to open on a Negative note as suggested by trends on SGX Nifty, said Mohit Nigam, Head - PMS, Hem Securities. US stock markets ended on mixed note on fFriday as bank shares gained and investors grappled with how best to deal with an economy that could skid as the Federal Reserve moves to aggressively tackle inflation. Dow Jones was up by 137.55 points, whereas NASDAQ was down by 1.34 percent to 13,711.0 levels.
Asian markets are trading on negative side as they are early reacting to central bank meetings and US inflation data. Nikkei is trading 0.61 percent lower and Topix index is trading at 0.35 percent lower. Oil prices are trading lower on monday following the second straight weekly decline after world consumers announced plans to release crude from strategic stocks and as Chinese lockdowns continued.
On the technical front 17,600 and 17900 are immediate support and resistance in Nifty 50. For Bank Nifty 37400 and 38000 are immediate support and resistance respectively, Nigam added.
A rough session is on cards as the US Treasury yields have inverted, said y Prashanth Tapse, Vice President (Research), Mehta Equities Ltd. The short-term bond yields exceed those of longer-term bonds. It means investors are worried about the economy’s long-term prospects. Nifty’s intraday support is seen only at 17,689 mark with hurdles at 18,115 mark. For the day, Nifty is likely to trade choppy in a range likely to be in the 17,27-17,927 zone.
Tapse said, With RBI’s policy decision in the rear mirror, the street will now brace for start of the earning season which should at least give us some solid trend. The Q4 earning season is quite significant as it comes on backdrop of the scorching inflation conditions. The theme of the day revolves around TCS results and investors will focus on the management commentary —— primarily on future outlook, attrition rates, and deal momentum.
''Besides, on the macroeconomic front, participants will be eyeing IIP and CPI inflation data on April 12. Apart from domestic factors, global cues like updates on Russia-Ukraine and performance of global markets will remain on the radar,'' said Ajit Mishra, VP - Research, Religare Broking Ltd to PTI.
Asian shares slip
Asian shares slipped on Monday ahead of a week packed with central bank meetings and US inflation data, while the euro eked out a gain on relief the far right did not win the first round of the French presidential elections.
The mood in equity markets was cautious, with MSCI's broadest index of Asia-Pacific shares outside Japan easing 1.0 percent. Japan's Nikkei dropped 0.6percent , having shed 2.6 percent last week, while Chinese blue chips lost 1.8 percent.
S&P 500 stock futures eased 0.4 percent and Nasdaq futures 0.6 percent. EUROSTOXX 50 futures lost 0.4 percent, and FTSE futures 0.3 percent. Earnings season kicks off this week with JP Morgan, Wells Fargo, Citi, Goldman Sachs and Morgan Stanley all due to report.
US stocks close mixed
USstocks ended mixed Friday, with the technology-laden Nasdaq Composite and S&P 500 closing lower, as investors continued to digest the Federal Reserve’s plans to aggressively raise interest rates and shrink its balance sheet. Key inflation data and corporate earnings reports loom next week. For the week, the Dow declined 0.3 percent the S&P 500 fell 1.3 percent and the Nasdaq dropped 3.9 percent.
The yield on the 10-year US Treasury note rose 5.9 basis points Friday to 2.713 percent, the highest since March 5, 2019. The 10-year yield climbed 33.9 basis points this week and has risen in four of the past five weeks.
Gross tax revenues indicate steady economic recovery
India’s gross tax revenue for the last fiscal surpassed budget and revised estimates, indicating a steady economic recovery. The provisional tax revenue stood at Rs 27.07 lakh crore for FY22, Revenue Secretary Tarun Bajaj told the media on Friday. That’s 34 percent higher than the collections in FY21. The budget and revised estimates for FY22 were at Rs 22.17 lakh crore and Rs 25.16 lakh crore, respectively. Also, the tax-GDP ratio of 11.7 percent in FY22, according to Bajaj, was the highest since 1999.
China inflation
China’s producer inflation for March was higher than expected. The producer price index surged 8.3 percent as compared with a year ago, official data showed Monday, above expectations for a 7.9 percent increase in a Reuters poll. Chinese consumer inflation also rose more than expected in March, with the consumer price index climbing 1.5 percent year-on-year. That was above expectations in a Reuters poll for a 1.2 percent increase.
FPIs turn net buyers in April
After a six-month selling spree, foreign investors have turned net buyers in April so far by infusing Rs 7,707 crore in Indian equities as a correction in markets provided them a good buying opportunity. According to latest data with the depositories, foreign portfolio investors (FPIs) have made a net investment of Rs 7,707 crore in Indian equities during April 1-8.
Apart from equities, FPIs put in Rs 1,403 crore in the debt markets during the period under review, after pulling out a net Rs 8,705 crore in the last two months (February and March).
Gold imports surge to $46.14 bn in 2021-22
India's gold imports, which have a bearing on the country's current account deficit (CAD), rose by 33.34 per cent to $46.14 billion during the 2021-22 fiscal on account of higher demand, according to official data.
Gold imports were worth $34.62 billion in 2020-21. The surge in gold imports during the last financial year contributed to the widening of the trade deficit to $192.41 billion, against $102.62 billion in 2020-21.
Bullion Outlook
On Friday, gold and silver were settled on a positive note in the international markets. Sentiment in the gold market remains bullish as the precious metal continues to consolidate in the face of rising bond yields as the Federal Reserve looks to aggressively tighten its monetary policy through 2022.
Despite all this bearish news, gold has managed to consolidate between $1,900 and $1,950 an ounce, while silver is maintained in range of $24 and $25.65. Rahul Kalantri, VP Commodities, Mehta Equities Ltd., said, While we don't see a breakout just yet, we expect prices to continue to test the top end of the range. Gold and silver catches safe haven demand amid Russia-Ukraine conflicts, slower global growth prospects and fear of rising global inflations.
Gold has support at $1928-1912, while resistance at $1951-1962. Silver has support at $24.55- 24.40, while resistance is at $25.05-25.30. In INR terms gold has support at Rs 51,780–51,550, while resistance is at Rs 52,340–52,510. Silver has support at Rs 66540- 66,220 while resistance is at Rs67,690–68050.
Results today
Tata Consultancy Services, Birla Tyres, Delta Corp, Elnet Technologies, Kesoram Industries, and Lasa Supergenerics etc.
Crude prices down
Brent was down $1.51 at $101.27, while US crude lost $1.48 cents to $96.78.
On Friday, Crude oil prices recovered from their lows and settled on a positive note but on weekly basis price of oil has fell for a second week. On Monday also in early Asian trading crude is trading at 2 percent negative after hefty release of strategic reserves by many countries and as China lockdowns continued. However, price is getting support at lower as supply concerns from Russia due to ongoing war between Russia-Ukraine and strict sanctions imposed by western countries.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said, "We expect crude oil prices to remain volatile to negative in today’s session. Crude oil is having support at $92.80-$90.50 and resistance is at $98.20–100.50, In INR terms crude oil has support at Rs7,140-6,960; while resistance is at Rs 7,550–7,770."
Fuel prices unchanged
The prices of petrol and diesel have remained unchanged for the fifth consecutive day on Monday. Accordingly, in Delhi, the price of petrol and diesel remains Rs 105.41 per litre and Rs 96.67 per litre respectively. Mumbai, the price of petrol was held unchanged at an all-time high of Rs 120.51 per litre. Diesel price also continues to be at Rs 104.77 a litre, the highest among metros.
In Chennai, petrol costs Rs 110.85 per litre and diesel Rs 100.94 per litre. In Kolkata, petrol is at Rs 115.12 per litre and diesel Rs 99.83 per litre.
Petrol and diesel prices were last hiked by 80 paise a litre each on Wednesday, taking the total increase in rates in 16 days to Rs 10 per litre.
Currency outlook
USDINR 27April futures contract unable to sustain above 76.0600 and slipped again. Rahul Kalantri, VP Commodities, Mehta Equities Ltd., said, On the weekly technical chart, a pair is trading above its resistance level of 75.8000. As per the weekly technical chart, we observed that a pair is sustaining above 75.8000 levels and technical indicators are showing positive momentum in the pair. Looking at the technical set-up, if a pair cross and sustain above 76.0600; could show further strength towards 76.3500-76.5500 in the upcoming sessions. We suggest for closely watching the level of 76.0600 in today’s session for taking any positions in the pair.
Stock under F&O ban on NSE
RBL Bank is under the F&O ban for April 11.
(With inputs from Reuters)
