Dear Trader…
Indian equity benchmarks continued their weak trend for fifth consecutive session and settled lower with over half a percent cut on Tuesday as investors turned cautious after Russian President Vladimir Putin recognized two breakaway regions in eastern Ukraine, increasing concerns about a major war. Markets made gap-down opening to trade around cut of 2% in early deals after Russian President Vladimir Putin recognized the independence of two Russian-backed breakaway republics in the east of Ukraine. Adding more cautiousness, provisional data available on the NSE showed that foreign institutional investors (FIIs) have net sold Rs 2,261.90 crore worth of shares.
Lackluster trade continued in afternoon deals. However, markets managed to trim most of their losses in dying hours of trade as fag-end buying emerged in HDFC, M&M, Infosys, Kotak Bank, and Bajaj Finserv. Some support also came in with NITI Aayog CEO Amitabh Kant’s statement that Indian economy growing at 9.2%, among fastest-growing large economies. But, benchmark indices failed to gain its green terrain and ended below neutral lines, as anxiety still persist over Russia- Ukraine geopolitical concern which sent oil prices to seven-year high. Meanwhile, the United States and its European allies are poised to announce harsh new sanctions against Russia after Putin formally recognised the breakaway regions in eastern Ukraine, escalating a security crisis on the continent.
Nifty futures opened at 16899.70 points against the previous close of 17205.20 and opened at a low of 16851.00 points. Nifty Future closed with an average movement of 294.00 points and a decline of around 144.20 points and 17061.00 points...!!
On the NSE, the midcap 100 index will decline 1.02% and smallcap 100 index is closing decline 2.05%. Speaking of various sectoral indices, Media, Realty, PSU Bank and Metal 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.50447, fell from a high of Rs.50687 points to a low of Rs.50057 with a rise of 84 points, a trend of around Rs.50162 and March Silver opened at Rs.63959, fell from a high of Rs.64744 points to a low of Rs.63870, with a rise of 402 points, a trend of around Rs.63993.
Meanwhile, India Ratings and Research in its latest report has said that facing intense competition from banks, gold loan Non-Banking Financial Companies (NBFCs) are likely to adopt aggressive strategies to maintain and expand their gold loan franchise. It mentioned many banks, both private and public, have become fairly active in the gold loan space, enticed by high yield and liquid security. For example, gold loan portfolio across banks has jumped by more than 89 per cent year-on-year to Rs 60,700 crore in FY21 and Rs 70,900 crore in the first nine months of FY22.
Further, it said the gold loan auctions by NBFCs rose in April-December period of FY22, perhaps the highest since FY14 when gold saw larger volatility in its prices. NBFCs offering gold loans faced higher auction pressures in the first nine months of FY22, largely due to the COVID-19 impact on borrowers' cash flows and gold price correcting by around 10 per cent during mid-June to September 30, 2021.
Technically, the important key resistances are placed in Nifty future are at 17170 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 17230 – 17303 levels. Immediate support is placed at 17007 – 16930 levels.
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