Nifty to surpass 19700 or slip on RBI policy? See GIFT Nifty, FII data, F&O ban, crude, more before market opens The GIFT Nifty was flat during Tuesday’s early trading session, down by 0.03% at 19605.5, indicating a tepid opening for domestic indices NSE Nifty 50 and BSE Sensex. On Wednesday, the Nifty 50 added 61.7 points to close at 19,632.55. On the other hand, Sensex gained 0.23% to end at 65,995.81. “The domestic market started adopting a defensive stance as investors awaited crucial inflation data for both India and the US. The deflationary trend in China and downgrade of the US mid- and small-sized banks affected the market sentiment. However, a late recovery in the domestic market was supported by a positive uptick in the European market and hope of an optimistic RBI policy not impacting domestic economic growth,” said Vinod Nair, Head of Research at Geojit Financial Services. Shares in the Asia-Pacific region were trading mixed on Thursday. China’s Shanghai Composite and Shenzhen Component were flat, up by 0.1% and 0.03% respectively. Japan’s Nikkei 225 was in the green, up 0.1%. South Korea’s Kospi declined 0.44% while Hong Kong’s Hang Seng fell 0.1%. The Taiwan Weighted index recorded a loss of 1.34%. Oil prices fell in early Asian trade on Thursday after reaching fresh highs in the previous session as concerns about the Chinese economy offset the positive impact of steep drawdowns in U.S. fuel stockpiles and Saudi and Russian output cuts. Foreign institutional investors (FII) bought shares worth net Rs 644.11 crore, while domestic institutional investors (DII) sold shares worth net Rs 597.88 crore on 9 August, according to the provisional data available on the NSE. The National Stock Exchange has Chambal Fertilisers, Delta Corp, Indiabulls Housing Finance, Hindustan Copper and Balrampur Chini Mills securities on its F&O ban list for 10 August. According to the NSE, stocks are prohibited in the F&O sector when they have exceeded 95% of the market-wide position limit (MWPL). During the F&O ban period, no new positions are permitted for F&O contracts in that stock. “Bank Nifty witnessed a volatile day of trade; the key hourly moving averages placed in the range 45,000 – 45,100 acted as a resistance and faced selling pressure. It did witness a pullback however it closed in the negative. The daily momentum indicator has a negative crossover which is a sell signal. Thus, this pullback should be used as a selling opportunity. On the downside, we expect 44,000 from a short-term perspective,” said Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas. “Nifty is currently placed at the important resistance of down sloping trend line around 19,650-19,700 levels. A decisive move above this hurdle is expected to negate the bearish chart pattern and could open the next upside target of around 19,900-20,000 levels in the near term. Immediate support is placed at 19,460 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. The RBI Monetary Policy Committee meeting will declare its policy decision later today. Overall, there is an expectation that the Central Bank may maintain the key lending rate at the current level of 6.5% today.
Retail inflation in milk was reported at 8.85% in May 2023. The milk inflation has remained elevated at over 6% since August 2022. Despite India being the largest milk producer since 1998, the commodity has been the second biggest factor after cereals such as rice and wheat in driving up retail inflation in the last fiscal.
Milk has the second highest weight in the food and beverages basket of the consumer price index at 6.61%, a notch lower than cereals and products with a 9.67% weight. Organised players, including Mother Dairy and Amul, hiked prices multiple times in the last one year citing higher fodder cost, robust demand and some impact due to reports of lumpy skin disease.
Industry sources said feed cost, which has a share of more than 65% in the cost of production of milk, has increased to Rs 20/kg from Rs 8 a year ago. The finance ministry in April had attributed the elevated milk inflation to a demand supply mismatch and said it could be one of the factors apart from volatile international crude oil prices and constrained supplies of milk would influence the country’s inflation trajectory.
“Milk production has been impacted by a lumpy skin disease infecting millions of cattle in late 2022,” the ministry said in the monthly economic review, adding that the vaccination drive against the disease is expected to curb the spread and immune the cattle against the skin disease.
According to official data, currently India is the world’s largest milk producer, and has a share of 23% in global milk production. For the first time in decades, the country’s milk production is likely to have stagnated in 2022-23 due to Lumpy Skin Disease in cattle across several states and the lagged effect of Covid-19 in the form of stunting of the animals, a senior official with department of animal husbandry and dairying recently had stated. The milk production was estimated at 221 million tonne in 2021-22.