Dear Trader…
Halting a three-day winning streak, Indian equity benchmarks came under heavy selling pressure and settled with losses of over a percent on Friday. The markets had a weak start and selling accentuated throughout the session as Former Reserve Bank of India Governor D Subbarao said the concern today was that the low interest rates and the enormous liquidity available in the system could potentially disrupt financial stability. He added that the challenge for central banks and for the Reserve Bank of India was to juggle between maintain price stability, supporting growth and employment, preserving financial stability and all this in a globalised world.
Market participants overlooked Union Revenue Secretary Tarun Bajaj’s statement the country's fiscal deficit will come down once revenues start to grow. He said that the government had adopted a loose fiscal policy on the backdrop of increased capital expenditure. Traders also paid no heed towards RBI report that the consumer confidence has shown gradual improvement for the third successive round of the survey. The Reserve Bank of India (RBI) said the current situation index (CSI) increased marginally on the back of better sentiments on general economic situation, household income and spending.
Nifty futures opened at 17448.00 points against the previous close of 17617.65 and opened at a low of 17282.30 points. Nifty Future closed with an average movement of 190.95 points and a decline of around 287.15 points and 17330.50 points...!!
On the NSE, the midcap 100 index will decline 2.02% and smallcap 100 index is closing decline 2.37%. Speaking of various sectoral indices, IT, PSU Bank and Realty stocks saw heavy selling on the NSE, while all other sectoral indices also closed lower.
At the start of intra-day trading, February gold opened at Rs.48750, fell from a high of Rs.48820 points to a low of Rs.48643 with a decline of 191 points, a trend of around Rs.48764 and March Silver opened at Rs.63000, fell from a high of Rs.63000 points to a low of Rs.62028, with a decline of 1067 points, a trend of around Rs.62199.
Meanwhile, India Ratings and Research (Ind-Ra) has said that reduction in impact of Covid-19's third wave, as well as accelerated re-opening activities, will boost textile demand in next financial year (FY23). It cited that reduction in logistics issues for export demand will aid in keeping healthy demand. It mentioned domestic demand for all the textile sub-sectors has continued to improve from 2QFY22, after a slight dip in 1QFY22. The increased demand momentum along with the supply chain issues has increased the realizations.
Demand for cotton remained all-time high in 2HFY21, leading to reduced opening stock for the new cotton season. The rise in prices of cotton has led spinners to accumulate the stock. Furthermore, it said that demand for MMF (man-made fibre) has continued to increase, mainly due to the rise in cotton prices, leading to a shift of demand from cotton to MMF, to an extent. The demand momentum sustained for home textiles in the domestic market because of improved consumer spending.
Technically, the important key resistances are placed in Nifty future are at 17373 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 17404 – 17434 levels. Immediate support is placed at 17232 – 17170 levels.
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