Stock market indices open weak amid negative global cues

The stock markets opened on a negative note on April 7. The benchmark BSE Sensex was down over 300 points while the Nifty was below 17,800.

At 09:16 AM, the Sensex was down 300.99 points or 0.50 percent at 59,309.42. The broader Nifty was down 73.70 points or 0.41 percent at 17,734. About 1,565 shares have advanced, 548 shares declined, and 84 shares are unchanged.

Among major gainers on the Nifty were Cipla, Asian Paints, Adani Ports, Divis Labs and Eicher Motors. while losers were ONGC, HDFC Bank, IOC, HDFC and Wipro.

There was heavy selling pressure on stocks of Titan which slumped 2.49 percent to Rs 2,478.05. HDFC fell 1.85 percent to Rs 2,489.50. HDFC Bank slumped 1.41 percent to Rs 1,529.00.

HDFC twins have been on a downward march for three days now after their share price surged by around 10 per cent on Monday shortly after the merger was announced.

NTPC surged 1.44 percent to Rs 155.25. Dr Reddy soared 1.25 percent to Rs 4,325.90. Sun Pharmaceutical rose 0.81 percent to Rs 935.40. Axis Bank, Power Grid, and ICICI Bank were among the major Sensex gainers.

Stocks to watch out for

Some of the stock specific actions can be witnessed in stocks such as Godrej Consumer Products (double-digit sales growth expected in Q4FY22), Motherson Sumi Systems (completed acquisition of a 55 percent stake in CIM Tools Private Limited), Zee Entertainment Enterprises (Invesco Developing Market Funds will launch a block deal to sell 7.8 percent stake in the company), said Nigam.

Asian stocks fall

Asian stocks fell Thursday after the Federal Reserve outlined plans to pare its balance sheet by more than $1 trillion a year while hiking interest rates in a campaign to curb elevated inflation.

Asian shares retreated on Thursday, in line with a global selloff, as markets were spooked by more aggressive noises from US policymakers about the need for tighter monetary policy, which also kept the dollar near a two-year peak.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.17 percent to its lowest level in a week, while Japan's Nikkei dropped 1.9 percent European and U.S. share futures also fell. EUROSTOXX 50 futures eased 0.2 percent, S&P 500 futures fell 0.37 percent and Nasdaq futures fell 0.35 percent.

Chinese blue chips shed 0.9 percent, and Hong Kong stocks lost 1.3 percent weighed by declines in large Chinese tech firms.

US stock indices decline

Wall Street's main indexes fell on Wednesday, with steep declines in tech and other growth stocks, after minutes from the Federal Reserve's March meeting sharpened investors' focus on the US central bank's plans to fight inflation.

The Dow Jones Industrial Average fell 144.67 points, or 0.42 percent, to 34,496.51, the S&P 500 lost 43.97 points, or 0.97 percent, to 4,481.15 and the Nasdaq Composite dropped 315.35 points, or 2.22 percent, to 13,888.82. The pan-European STOXX 600 index lost 1.53 percent and MSCI's gauge of stocks across the globe shed 1.22 percent.

The Dow Jones Transportation Average slipped into bear market territory. That can be another sign that bad news is in store for the economy and stock market.

The Federal Reserve signaled its plans to increase a key US interest rate by 1/2 percentage point steps at upcoming meetings if inflation remains high or gets even worse, according to minutes of the central bank’s last strategy session in March.

The Fed does not have much experience winding down its balance sheet. It only has done it once before – from 2017 until 2019 when it allowed about $700 billion to runoff. This time, economists think the Fed would like to reduce the balance sheet by roughly $1 trillion for three years, until the balance sheet is closer to $6 trillion.

The 10-year US Treasury note yield climbed to 2.606% Wednesday putting it above the 2-year 2.5 percent rate following a brief period of inversion.

Russia slipped closer to a technical default after foreign banks declined to process about $650 million of dollar payments on its bonds, forcing it to offer rubles instead.

Worst sell-off by FPIs in FY 2022

Foreign portfolio investors dumped Indian shares worth record Rs 1.4 lakh crore in the financial year 2021-22, after pumping in whopping Rs 2.7 lakh crore in the preceding fiscal, mainly on account of sharp surge in coronavirus cases, concerns over the risk to economic recovery and global turmoil triggered by Russia-Ukraine war.

This was the worst ever exodus by Foreign Portfolio Investors (FPI) from domestic equity market. They withdrew Rs 88 crore in 2018-19, Rs 14,171 crore in 2015-16 and Rs 47,706 crore in 2008-09, data with depositories showed.

Invesco to divest 7.8% equity

Investment firm Invesco, single-largest shareholder in Zee Entertainment Enterprises Ltd (ZEEL) on Wednesday said three funds managed by its developing markets investment team, including Invesco Developing Markets Fund, will sell up to 7.8 percent of the share capital of ZEEL to align exposures to the firm with other funds managed by the team.

Invesco said after the proposed sale, the three funds managed by its developing markets investment team will continue to own in aggregate at least 11 percent of ZEEL.

Consortium to acquire IDFC AMC for Rs 4,500 crore

IDFC Limited and a consortium comprising Bandhan Financial Holdings Limited, GIC and ChrysCapital have announced they have entered into a definitive agreement to acquire IDFC Asset Management Company Limited and IDFC AMC Trustee Company Limited from IDFC Limited, for a consideration of Rs 4,500 crore, subject to receipt of necessary regulatory approvals and customary closing conditions.

Crude prices down

Brent crude futures settled down $5.57, or 5.2 percent, at $101.07 a barrel, while US crude fell $5.73, or 5.6%, to $96.23 a barrel.

On Thursday, crude oil prices clawed back some losses after tumbling more than 5 percent to a three-week low in the previous session after consuming nations announced a huge release of oil from emergency reserves to offset supply lost from Russia. Crude also slipped after the Federal Reserve maintained hawkish stance in its March month policy minutes released on Wednesday. Prices also slipped on Wednesday after the US oil inventories increased by 2.4 million barrels against expectations of a decline of 2.9 million barrels.

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 $95.40-$93.80 and resistance is at $101.20–104.50, In INR terms crude oil has support at Rs7,140-6,960; while resistance is at Rs7,550–7,770."

Bullion outlook

Gold and silver has been witnessing a lackluster performance over the last six trading sessions. The precious metal is displaying back and forth moves in a range of $1,915.22-1,949.86, while silver moves in range of $24-$25.05. It is worth noting that the release of the Federal Open Market Committee (FOMC) minutes and speeches from various Federal Reserve (Fed) policymakers this week have failed to put any substantial impact on gold prices.

The Federal Reserve maintained its hawkish stance in its March meeting minutes, apart from that, the rapid pace at which the Fed will augment the balance sheet reduction is one of the major highlights. Fed policymakers are majorly agreed on monthly caps of about $60B for Treasury securities, and $35B for mortgage-backed securities (MBs). However, Russia-Ukraine conflict, higher inflation pressure and slower economic growth prospects are supporting precious metals.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd., said, gold and silver could see buying in dip. Gold has support at $1908-1896, while resistance at $1933-1944. Silver has support at $24.05- 23.84, while resistance is at $24.52-24.82. In INR terms gold has support at Rs 51,240–50,980, while resistance is at Rs 51,840–52,140. Silver has support at Rs 65,810- 65,420 while resistance is at Rs 66,690–67050.

USD-INR

USDINR 27April futures contract hold its support level of 75.35 and recovered again. On the daily technical chart a pair crossed its resistance level of 75.90 again. Rahul Kalantri, VP Commodities, Mehta Equities Ltd., said, As per the daily technical chart, we observed that a pair holds its crucial support level of 75.35 and recovered again. Looking at the technical set-up, if a pair cross and sustain above 76.06; could show further strength towards 76.35-76.55 in the upcoming sessions. We suggest for closely watching the level of 76.06 in today’s session for taking any positions in the pair.

(With inputs from Reuters)

Published on: Thursday, April 07, 2022, 09:21 AM IST