Dear Trader…
Indian equity benchmarks ended lower for the third consecutive day on Monday, amid selling in Finance, Capital Goods, Banking and FMCG stocks. Key gauges had a weak start and selling was accentuated throughout the session, as traders remained cautious with a private report that in view of inflationary concerns, the Reserve Bank is likely to maintain the status quo on key policy rates in its next bi-monthly economic policy, which will be the first after the presentation of the Union Budget for 2022-23.
Some concern also came as rating agency Moody’s Investors Service said Indian economy’s fiscal strength is unlikely to improve in the medium term, thus remaining a key credit challenge compared with peers, even as the FY23 budget’s focus on capital expenditure will support near-term growth.
The sharp fall in the market also attributed to persisting selling by the foreign institutional investors (FIIs). Foreign portfolio investors (FPIs) pulled out as much as Rs 6,834 crore from Indian markets in the first four trading sessions of February. As per depositories data, FPIs took out Rs 3,627 crore from equities, Rs 3,173 crore from the debt segment and Rs 34 crore from hybrid instruments. FIIs remained net sellers in the capital market, as they sold shares worth Rs 2,267.86 crore on Friday.
Nifty futures opened at 17458.55 points against the previous close of 17529.65 and opened at a low of 17125.00 points. Nifty Future closed with an average movement of 407.55 points and a decline of around 315.85 points and 17213.80 points...!!
On the NSE, the midcap 100 index will decline 1.03% and smallcap 100 index is closing decline 1.34%. Speaking of various sectoral indices, the NSE saw gains in only PSU Bank stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, February gold opened at Rs.48011, fell from a high of Rs.48100 points to a low of Rs.47995 with a rise of 147 points, a trend of around Rs.48071 and March Silver opened at Rs.61337, fell from a high of Rs.61734 points to a low of Rs.61337, with a rise of 878 points, a trend of around Rs.61727.
Meanwhile, India Ratings and Research (Ind-Ra) has said covid-19's third wave is expected to have a benign impact on the hotel industry due to lesser restrictions along with the sector's pro-active preparation. According to the ratings agency, the impact across the sector will be lower because of lesser restrictions by Central and state governments than in the first and second waves.
Moreover, it stated as witnessed during the first two waves, the ebbing of the infection wave starts from metro cities; therefore, the minimal restrictions by the government and self-restrictions by the people will start blurring away in a couple of months.
Besides, it pointed out that unlike the first two waves, the overall impact will be benign due to the pro-active preparation by the sector in terms of cost cutting during the times when the cases begin to rise. However, it cited that recovery of the sector will be more protracted and patchier than its base case. It assumed near normal occupancy in FY23 but mass cancellation of planned events on the back of limits on number of attendees will impact the sector.
Technically, the important key resistances are placed in Nifty future are at 17272 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 17303 – 17330 levels. Immediate support is placed at 17077 – 17007 levels.
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