Daily Market Wrap - July 27, 2021 - Mr. Deepak Jasani, Head of Retail Research, HDFC Securities
(Time Zone: UTC)
Indian benchmark equity indices once again failed to hold on to gains on July 27 as Asian markets came under pressure after China continued to crackdown on its internet businesses. Q1FY22 numbers from Indian corporates failed to excite investors. The Nifty opened higher, but post 1155 Hrs, it started to fall. After making an intraday bottom at 1310 Hrs, a feeble recovery attempt was witnessed. At close Nifty was down 0.49% to 15746.5. Smallcap indices ended better than the Nifty.
Volumes on the NSE expanded compared to the recent averages. Metals sector was the sole gainer as the Chinese government's latest move to curb domestic production and tame surging prices was expected to aid India's steel mills and Novelis gave an encouraging guidance benefitting Hindalco's stock price, while Power and Healthcare stocks came under selling pressure. Dr Reddys reported poorer than expected Q1FY22 results and as per reports, is investigating a complaint about improper payments on behalf of the company in Ukraine and other countries.
Asia's stock markets fell to fresh troughs on Tuesday led by a third straight session of heavy selling in Chinese internet giants. Food delivery arms to be the latest affected by new regulations guaranteeing workers above minimum pay after regulatory crackdowns in the education and property sectors earlier.
An index following the 98 biggest US-listed Chinese socks, the Nasdaq Golden Dragon China Index, has been knocked almost 15% off course over the last two days.
China's state media are on a late mission to talk up the battered stock market and reassure rattled investors after a rout on Monday that erased more than US$570 billion from Chinese stocks listed at home and abroad.
Nifty has formed a bearish Engulfing Top like pattern. It has repeatedly failed to cross the 15962 level. With US Fed meet and F&O expiry over the next two days, we could see heightened volatility in the markets. 15632-15824 could be the band for the Nifty over the next 1-2 sessions.