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Indian shares closed lower after choppy trading on Wednesday, with heavyweight financial firms dropping the most, as investors booked profits and adjusted their equity positions ahead of the expiry of monthly contracts for June.

Dear Trader…

Indian shares closed lower after choppy trading on Wednesday, with heavyweight financial firms dropping the most, as investors booked profits and adjusted their equity positions ahead of the expiry of monthly contracts for June. Traders were worried as Moody’s Investors Service slashed India’s growth projection to 9.6 per cent for 2021 calendar year, from its earlier estimate of 13.9 per cent, and said faster vaccination progress will be paramount in restricting economic losses to June quarter.

Earlier this month, Moody’s had projected India to clock a 9.3 per cent growth in the current fiscal ending March 2022, but severe second COVID wave has increased risks to India’s credit profile and rated entities. However, downfall remain capped as report stated that Indian companies’ market capitalization has grown at the fastest pace last year among major economies despite contraction in GDP.

Nifty futures opened at 15792.20 points against the previous close of 15773.25 and opened at a low of 15677.00 points. Nifty Future closed with an average movement of 187.60 points and a decline of around 79.25 points and 15694.00 points .. !!!

On the NSE, the midcap 100 index will decline 0.21% and smallcap 100 index is closing decline 0.52%. Speaking of various sectoral indices, the NSE saw gains in only auto stocks, while all other sectoral indices closed lower.

At the start of intra-day trading, august gold opened at Rs.47093, fell from a high of Rs.47163 points to a low of Rs.46962, with a rise of 64 points, a trend of around Rs.47075 and July Silver opened at Rs.67917, fell from a high of Rs.68089 points to a low of Rs.67501, with a rise of 260 points, a trend of around Rs.67775..!!

Meanwhile, domestic ratings agency ICRA in its latest report has said that Auto component industry is likely to witness a 70 percent decline in operating profits during first quarter of current financial year (Q1 FY22) due to disruptions caused by the second wave of COVID-19. It noted that the challenges for component manufacturers will be further compounded by the sharp increase in commodity prices, which are generally passed through to original equipment manufacturers (OEMs) with a lag of 3-6 months.

ICRA estimates a revenue loss of 30-40 percent quarter on quarter, and this will translate into a sequential decline in EBITDA of over 70 percent during the first quarter for the industry. Exports have come to the industry’s rescue in the last few months, when domestic demand nosedived due to lockdown restrictions. Suppliers dependent solely on domestic demand have been the worst impacted.

Despite the short-term headwinds, ratings agency expects the domestic auto component industry to register a 20-23 percent revenue growth in the current fiscal year, supported by double-digit volume growth across most automobile sub-segments and impact of commodity inflation on realisations. It added that the overall industry revenue will still be almost double than the April-June quarter of last financial year.

Technically, the important key resistances are placed in Nifty future are at 16737 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 15777 – 15808 levels. Immediate support is placed at 15606 – 15474 levels.

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