Trends in SGX Nifty point to a cautious open for the broader index in India, up 19 points. Indian markets could open flat to slightly higher on Wednesday, in line with mostly higher Asian markets today and mixed US markets, said Deepak Jasani, head-retail research, HDFC Securities.
Nifty fell on April 27 after rising the previous day as it was dragged down by weak Asian cues. At the close, Nifty was down 0.94% or 162.4 points at 17038.4.
Jasani said: The company’s subdued fourth-quarter results add to concerns from investors already shaken by existing worries about inflation, tightening central banks, a resurgence of COVID cases in China and high commodity prices. Markets are sold on every decent upleg. Unless global markets rise for several days in a row (triggered by an economic or geopolitical event), sentiment at the local or FPI level may not improve sustainably. The small grace is that Nifty did not close at the daily low on April 27th. Nifty could remain in the 17149-16954 range in the short term, Jasani added.
Prashanth Tapse, Vice President (Research) of Mehta Equities Ltd. said: Markets could see steady gains in early trading but volatility is likely to be high amid the April F&O expiration. The inflation genie needs to be put back in the bottle for the bulls to survive and thrive. Technically, bears can only turn bulls if Nifty reclaims its 200 DMA level at 17213. The India VIX, which gauges the expected volatility of the market, also rose to 20.61 during yesterday’s trading. The April streak suggests that Nifty is likely to be in a 16,500-17,500 trading range. The maximum call OI is 17,500 followed by a strike price of 17,300. So the 17,500 level will be the key resistance zone of Nifty. The maximum open put interest is 17,000 levels, followed by 16,400 levels, Tapse said.
On April 27, the Sensex lost 537.22 points, or 0.94 percent, to 56,819.39. The broader Nifty lost 162.40 points, or 0.94 percent, to 17,038.40.
Asian stocks are trading high
Asian stocks were slightly higher on Thursday as investor sentiment improved following a surge in Facebook parent Meta Platforms Inc. and more pledges of economic support from China. The latest development came from the Chinese cabinet, which vowed to stabilize employment. Officials have already committed to more infrastructure projects and signaled further support from monetary policy.
US stocks close with modest gains
The Dow and S&P 500 ended with modest gains on Wednesday, as investors read a mixed set of results from Boeing Co., Microsoft Corp. and others, a day after the Nasdaq Composite hit its lowest level in more than two years. and Alphabet Inc. estimated.
Stocks ended mostly higher on Wednesday, even as investors juggled multiple concerns including fears that the Federal Reserve could plunge the economy into recession as it hikes interest rates to combat high inflation, mixed U.S. Corporate earnings and worries about COVID outbreak in China slowing economic growth. Investors also watched tensions surrounding the war in Ukraine, with signs of escalation after Russia’s Gazprom said on Wednesday it was halting gas supplies to Bulgaria and Poland because those countries don’t pay in rubles.
The US goods trade deficit widened 17.8 percent to a record $125.3 billion in March, government data showed.
Euro falls to weakest since 2017
The euro fell to its weakest level since 2017 after Russia halted gas supplies to Bulgaria and Poland and investors grew more concerned about the region’s economy. The dollar continued to soar and was on course for its biggest monthly gain since January 2015.
The hedge fund industry saw its biggest inflows in seven years in the first quarter as investors sought downside protection amid a spike in volatility fueled by inflation fears and rising interest rates, as well as geopolitical tensions. The $4 trillion community saw capital inflows totaling $19.8 billion in the first three months of 2022, the highest quarterly inflow since the second quarter of 2015, according to hedge fund data firm HFR.
US economy still ‘very, very strong’
U.S. data out Thursday is expected to show slower economic growth in the first quarter, mainly due to a less robust rise in corporate inventories, but the broader economy remains strong, a senior Biden administration official said on Wednesday. The Commerce Department’s advance reading of first-quarter gross domestic product, which is due at 8:30 a.m. ET (1230 GMT), should not be interpreted as a sign that the economy is headed in a bad direction, the official said.
Meta reports slowest quarterly revenue growth in 10 years
Facebook parent Meta Platforms Inc on Wednesday posted the slowest revenue growth in a decade, scorched by advertisers cutting marketing budgets amid uncertainties surrounding global economic growth and the war in Ukraine, Reuters said. The company’s total revenue, which comes largely from ad sales, rose 7 percent to $27.91 billion in the first quarter, but missed analyst estimates of $28.20 billion, according to IBES data from Refinitiv.
Tesla loses $126 billion in value over concerns about funding Musk’s Twitter deal
Tesla Inc tumbled $126 billion on Tuesday amid concerns that CEO Elon Musk may have to sell shares to fund its $21 billion equity investment in its $44 billion buyout of Twitter Inc finance.
Tesla isn’t involved in the Twitter deal, but its shares have been targeted by speculators after Musk refused to publicly reveal where his money for the acquisition came from. Tuesday’s 12.2% drop in Tesla shares represented a $21 billion loss in the value of his Tesla stake, along with the $21 billion in cash he pledged for the Twitter deal.
Lower crude oil prices in Asian trading
Oil prices fell slightly in early Asian trade on Thursday as concerns over rising coronavirus cases in China, the world’s largest oil importer, weighed on futures markets. The corona virus has now also moved to the Chinese capital Beijing. Crude oil prices were largely unchanged today after the US Energy Information Administration reported a modest crude inventory build of 700,000 barrels.
Supply concerns from Russia are also supporting oil and gas prices. Natural gas prices rose around 5 percent on Wednesday after Russia halted gas supplies to Poland under the Yamal Treaty on Wednesday.
On the other hand, the US dollar hit fresh two-year highs and the euro plunged to five-year lows, limiting gains in energy commodities.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd said: “We expect Crude Oil prices to remain volatile and under pressure in today’s trading session. Crude Oil has support at Rs 7,550-7,380 while resistance is at Rs 8,050-8,174 located”.
Bullion Outlook
Gold hit a two-month low on Wednesday as the dollar rallied on expectations of aggressive monetary tightening by the US Federal Reserve. Gold and silver tumbled after the dollar index and US bond yields rose sharply. The dollar index hit new 2-year highs, ie the 103 level. The euro zone will be hit hard as energy costs soar as Russia halted gas supplies to Poland under the Yamal Treaty on Wednesday.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd said: Gold and Silver are trading very close to their key support levels Gold $1800 and Silver $23, a hold below will put Gold and Silver in a bearish zone and would add some pressure Experienced. Gold has support at $1,872-1,860 while resistance lies at $1,900-1,912. Silver has support at $23.00-22.78 while resistance is at $23.62-23.80. In terms of INR, Gold has support at Rs 50,880-50,720 while resistance lies at Rs 51,380-51,550. Silver has support at Rs 63,940-63,415 while resistance lies at Rs 65,120-65,610.
USD INR
USDINR May 27 futures contract showed high volatility due to monthly expiration of previous contract. USDINR remained range-bound on concerns over slowing growth in China and expectations that the US Federal Reserve will hike rates aggressively. A pair is trading above its 76.40 resistance level on the daily technical chart. Looking at the technical setup, a pair has been firmly trending for the past few months and is showing strength on the technical charts. Rahul Kalantri, VP Commodities, Mehta Equities Ltd. said: “We expect the pair to continue to hold its key support level at 76.10 on a daily close basis. Daily close basis for 77.00-77.20 targets”.
results today
The following companies will report their quarterly results today (April 28): Axis Bank, Bajaj Finserv, Ambuja Cements, SBI Life Insurance Company, Vedanta, Agro Tech Foods, Biocon, Coromandel International, Embassy Office Parks REIT, Fineotex Chemical, IIFL Finance, IndiaMART InterMESH, Laurus Labs, Motilal Oswal Financial Services, Mphasis, Procter & Gamble Hygiene & Health Care, PNB Housing Finance, Shoppers Stop, Shriram Transport Finance, Sterlite Technologies and Varun Beverages.
(With contributions from Reuters, agencies)
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Published on: Thursday, April 28, 2022 08:20 IST
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