Indian equity benchmarks failed
to hold intraday gains in a choppy session and closed the session in red
terrain on Tuesday, as global cues turned bearish. Domestic benchmark indices
started trade in the positive territory, as traders took encouragement with
Minister of State for Finance Pankaj Chaudhary's statement the net direct tax
collection grew nearly 68 per cent during April 1 to November 23 to more than
Rs 6.92 lakh crore. Some support came in as India Ratings expects the economy
to grow 8.3 per cent in Q2 and close the year with 9.4 per cent in FY'22.
Buying further crept in with Crisil Ratings in its latest report stated that
after weathering multiple challenges over the past three fiscals, asset under
management (AUM) of non-banking financial companies' (NBFCs) and housing
finance companies (HFCs) is set to grow 8-10 percent in the fiscal 2023, helped
by improvement in economic activity and strengthened balance sheet buffers.
Some optimism also came in with private report that data was expected to show
that India's economic recovery strengthened in the July-September quarter,
helped by a pick-up in consumer spending, though the spread of the Omicron
coronavirus variant raised fears for the future. However, the markets saw
selling pressure towards fag-end of the session, as investors awaited gross
domestic product (GDP) data that is expected to show the country's economic
recovery strengthened in the second quarter. Traders remained cautious amid
report that seven people arrived from South Africa in Maharashtra's Thane city
adjoining Mumbai since November 14 and all of them were tested in the wake of
concerns over the new potentially more transmissible 'Omicron' variant of the
coronavirus. Some cautiousness also crept in as Moody's Analytics said the
Omicron variant of COVID-19 adds new uncertainties to the global economic
outlook but much will depend on its speed of transmission, hospitalization and
death rates, and also the effectiveness of vaccines. Finally, the BSE Sensex
fell 195.71 points or 0.34% to 57,064.87 and the CNX Nifty was down by 70.75
points or 0.41% to 16,983.20.
The US markets ended lower on
Tuesday on renewed concerns about the new coronavirus variant after Moderna's
(MRNA) CEO said Covid-19 vaccines are likely to be less effective against
Omicron. Moderna CEO Stephane Bancel said that it would take a couple of weeks
to determine how much the mutations have affected the efficacy of the vaccines
currently available in the market. Regeneron Pharmaceuticals (REGN) has also
warned its Covid-19 antibody cocktail and similar drugs could be less effective
against the Omicron variant. Markets saw further downside after Federal Reserve
Jerome Powell suggested during Congressional testimony that the central bank
would discuss accelerating the pace at which it reduces its asset purchases
during the next monetary policy meeting. Powell said At this point, the economy
is very strong and inflationary pressures are higher, and it is therefore
appropriate in my view to consider wrapping up the taper of our asset purchases, perhaps a few months sooner. In early November, the Fed announced plans to
begin reducing its $120 billion in monthly bond purchases by $15 billion per
month.
Crude oil futures ended sharply
lower on Tuesday, suffering their worst monthly decline since March 2020, on
fresh concerns about the outlook for oil demand after the chief executive of
Moderna Inc. warned that vaccines are likely to be less effective against the
omicron variant of the coronavirus that causes COVID-19. Further, the dollar's
rebound into positive territory, albeit for a brief while, further weighed on
oil prices. The dollar recovered after Federal Reserve Chairman indicated the
central bank could hasten a tightening of monetary policy. Benchmark crude oil
futures for January delivery dropped $3.77 or 5.4 percent to settle at $66.18 a
barrel on the New York Mercantile Exchange. Brent crude for February delivery
fell $3.99 or 5.5 percent to settle at $69.23 a barrel on London's
Intercontinental Exchange.
Continuing previous session
drubbing, Indian rupee concluded weaker against dollar on Tuesday on account of
continued dollar demand from importers and banks. This is the fourth
consecutive session when the rupee traded lower against dollar. Sentiments were
impacted after drugmaker Moderna's CEO set off fresh alarm bells in financial
markets after he warned that COVID-19 vaccines were unlikely to be as effective
against the Omicron variant as they have been against the Delta version. On the
global front, euro surged on Tuesday and is on track for its biggest three-day
rising streak this year as traders cut their short positions on the single
currency after Moderna's CEO said COVID-19 vaccines are unlikely to be as
effective against the Omicron variant as they have been with other types. Finally,
the rupee ended 75.13, weaker by 6 paise from its previous close of 75.07 on
Monday.
The FIIs as per Tuesday's data
were net sellers in equity segment and net buyers in debt segment. In equity
segment, the gross buying was of Rs 6729.31 crore against gross selling of Rs
10372.39 crore, while in the debt segment, the gross purchase was of Rs 857.33
crore against gross selling of Rs 335.09 crore. Besides, in the hybrid segment,
the gross buying was of Rs 6.53 crore against gross selling of Rs 9.89 crore.
The US markets ended lower on
Tuesday after Fed chairman Jerome Powell hinted of wrapping up tapering of bond
purchases a few months sooner, citing inflation risk. Asian markets are trading
mostly in green on Wednesday despite the broadly negative cues overnight from
Wall Street, after the Japanese government stepped up virus containment
measures on confirming the country's first Omicron variant case. Indian markets
failed to hold gains on Tuesday, witnessing a volatile trading session that
forced Sensex, Nifty to close in red. Today, markets are likely to start the
session on a positive note on better-than-expected macro-economic data amid
gains across other Asian markets coupled with fall in crude oil prices.
Investors will be eyeing Manufacturing PMI data to be out later in the day. Sentiments
will get a boost as India's gross domestic product (GDP) in the second quarter
of the fiscal year 2021-22 grew at 8.4 percent. The numbers mark a significant
increase as compared to the COVID-19-hit second quarter of last fiscal year,
when the GDP had declined by 7.4 percent. Besides, S&P Global Ratings kept
India's economic growth forecast in the fiscal year to March 2022 unchanged at
9.5 per cent but raised its predictions for the subsequent year on broadening
out of the recovery. Some support will come with government data showing that
the combined output of eight core industries has surged by 7.5 percent in
October, as compared to the same period last year. Also, the latest data from
the Reserve Bank of India (RBI) showed that credit growth to industry picked up
to 4.1 percent in October 2021 from a contraction of 0.7 percent in October
2020. Meanwhile, according to the data released by the Controller General of
Accounts (CGA), the Union government's fiscal deficit works out to be Rs 5.47
lakh crore or 36.3 per cent of the budget estimates at the end of October 2021
on the back of improvement in revenue collection. However, there may be some
cautiousness as a periodic labour force survey by the National Statistical
Office (NSO) showed that unemployment rate for all ages in urban areas rose to
9.3 per cent in January-March 2021 from 9.1 per cent in the same month of the
previous year. Foreign fund outflow is likely to keep sentiments in the markets
down bit. Foreign portfolio investors (FPIs) remained net sellers for Rs
5445.25 crore in the Indian markets. Auto stocks will be in limelight reacting
to their sales numbers to be out later in the day. There will be some reaction
in fertilizer industry stocks with a private report that India plans to increase
2021/22 fertiliser subsidies to a record of more than 1.55 trillion rupees
($20.64 billion) to avoid shortages amid a sharp increase in global prices of
the chemicals. Star Health and Allied Insurance Company IPO was subscribed 12
per cent at the end of Day 1. The retail quota was subscribed 64 per cent. Tega
Industries IPO will open for subscription today. The mill-liner producer's
company aims to raise Rs 619 crore and has fixed a price band of Rs 443-453 per
share.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
16,983.20
|
16,790.16
|
17,168.46
|
BSE Sensex
|
57,064.87
|
56,560.33
|
57,876.59
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Coal
India
|
566.43
|
151.75
|
149.24
|
156.39
|
Tata
Motors
|
354.71
|
458.95
|
450.40
|
472.75
|
Power
Grid Corporation of India
|
283.04
|
206.50
|
201.36
|
210.56
|
Axis
Bank
|
246.99
|
651.90
|
640.79
|
670.24
|
ICICI
Bank
|
239.65
|
712.00
|
704.64
|
725.84
|
Coal India is planning to spend an estimated Rs 19,650 crore to strengthen its rail infrastructure.
SBI has entered into a co-lending agreement with Capri Global Capital to offer MSME loans.
Maruti Suzuki India has increased the price of EECO (all non-Cargo variants) owing to introduction of Passenger Airbag.
Fitch Ratings has affirmed Axis Bank's Long-Term Issuer Default Rating at BB+ with negative outlook.