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NSE Intra-day chart (01 December 2021)
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Market Commentary 02 December 2021
Benchmarks to open in red amid weak global cues


Indian equity benchmarks traded with positive bias throughout the day and ended over a percent higher on Wednesday backed by supportive global cues and encouraging macro-economic data. The frontline indices started gap-up 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. Sentiments remained upbeat with a private survey showed India's manufacturing activity grew at the fastest pace in 10 months in November, buoyed by a strong pick-up in demand, but higher inflationary pressure left factories worried about their future prospects. Compiled by IHS Markit, the Purchasing Managers' Index rose to 57.6 in November from 55.9 in October. The reading was the highest since January and the fifth straight month above the 50-mark that separates growth from contraction. Some support came in 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. Investors are eyeing Manufacturing PMI data to be out later in the day. However, key benchmark indices have pared some initial gains, as some concern came with a periodic labour force survey by the National Statistical Office (NSO) showed that unemployment rate for persons of age 15 years and above 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. But, key gauges regained traction to end higher, as some support came with the finance ministry has said that Goods and Services Tax (GST) collections jumped to over Rs 1.31 lakh crore in November, the second highest since its implementation in July 2017. Adding to the optimism, Chief Economic Adviser (CEA) K V Subramanian has exuded confidence that India would achieve double-digit growth in the current financial year (FY22) on the back of policy initiatives and continuing reforms. He also said the country is well poised to meet the fiscal deficit target of 6.8 per cent of Gross domestic product (GDP). Some relief also came with data showing that the central government's fiscal deficit at end-October worked out to be 36.3 percent of the annual budget target for 2021-22 due to an improvement in the revenue collection. Finally, the BSE Sensex fell 619.92 points or 1.09% to 57,684.79 and the CNX Nifty was up by 183.70 points or 1.08% to 17,166.90.


The US markets ended lower on Wednesday after the Center for Disease Control and Prevention (CDC) revealed the first confirmed case of Covid-19 caused by the new Omicron variant has been detected in the US. The CDC said the first confirmed omicron case was detected in an individual in California, who returned from South Africa on November 22, 2021. The sharp pullback reflects recent volatility as traders show significant sensitivity to the latest news about the Omicron variant of the coronavirus. Traders largely shrugged off the latest US economic news, including a report released by payroll processor ADP showed private sector employment increased by slightly more than expected in the month of November. ADP said private sector employment shot up by 534,000 jobs in November after surging by a revised 570,000 jobs in October. Street had expected private sector employment to jump by about 525,000 jobs compared to the addition of 571,000 jobs originally reported for the previous month. Meanwhile, the Institute for Supply Management (ISM) released a separate report showing manufacturing activity grew at a slightly faster rate in the month of November. The ISM said its manufacturing PMI crept up to 61.1 in November from 60.8 in October, with a reading above 50 indicating growth in the sector. Street had expected the index to inch up to 61.0. On the sectoral front, Airline stocks showed a substantial downturn over the course of the trading session, with the NYSE Arca Airline Index plummeting by 4.9 percent after soaring as much as 3.4 percent in early trading.


Crude oil futures ended lower on Wednesday, extending their previous session's losses, on worries the Omicron variant of coronavirus could cut oil demand as global supply builds. The Center for Disease Control and Prevention (CDC) revealed the first confirmed case of Covid-19 caused by the new Omicron variant has been detected in the US. The CDC said the first confirmed omicron case was detected in an individual in California, who returned from South Africa on November 22, 2021. However, oil prices initially benefited from improved risk sentiment ahead of an OPEC meeting where major producers will discuss how to respond to the threat of a hit to fuel demand from the Omicron variant. Meanwhile, the Energy Information Administration released a report showing crude oil inventories dipped by 0.9 million barrels in the week ended November 26th, less than the 1.2 million drop Street had expected. Benchmark crude oil futures for January delivery dropped 61 cents or 0.9 percent to settle at $65.57 a barrel on the New York Mercantile Exchange. Brent crude for February delivery fell 36 cents or 0.5 percent to settle at $68.87 a barrel on London's Intercontinental Exchange.


Reversing previous session drubbing, Indian rupee ended appreciated significantly on Wednesday, owing to dollar sale by exporters and banks, positive domestic equities and weak American currency in the overseas markets boosted investor sentiment. Traders got support after 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. In another positive development, India Manufacturing PMI hits 10-month high of 57.6 in November on strong demand. The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) increased at 57.6 in November, which is a jump from 55.9 in October. On the global front, pound inched higher on Wednesday but held near a 2021 low versus the U.S. dollar as doubts grew on whether the Bank of England will raise interest rates at a policy meeting this month. Finally, the rupee ended 74.91 (Provisional), stronger by 22 paise from its previous close of 75.13 on Tuesday.


The FIIs as per Wednesday's data were net sellers in equity segment and net buyers in debt segment. In equity segment, the gross buying was of Rs 42135.09 crore against gross selling of Rs 47376.49 crore, while in the debt segment, the gross purchase was of Rs 980.19 crore against gross selling of Rs 600.92 crore. Besides, in the hybrid segment, the gross buying was of Rs 351.40 crore against gross selling of Rs 369.08 crore.


The US markets ended lower on Wednesday as investors fretted about the latest coronavirus variant and the first evidence of its US arrival. Asian markets are trading mixed on Thursday with advances in Chinese real estate shares amid fears about the Omicron variant of the new coronavirus. Indian markets saw the return of bulls on Wednesday as indices closed over 1 percent higher aided by positive macroeconomic data. Today, start of session is likely to be in red amid negative global cues. Traders will be concerned with RBI report that the combined debt-to-GDP ratio of states is expected to remain at 31 per cent by end-March 2022 which is worryingly higher than the target of 20 per cent to be achieved by 2022-23. There will be some cautiousness as India posted a record merchandise trade deficit of $23.27 billion in November compared with $10.19 billion a year ago. Traders may take note of Moody's Investors Service's statement that the economic impact of the Omicron variant of COVID-19 on emerging economies will depend on a mix of government restrictions, public comfort with social interactions, and capacity of governments and central banks to provide additional policy support to the private sector. However, some respite may come later in the day as India's merchandise exports in November rose by 26.49 per cent to $29.88 billion on account of healthy growth in sectors such as engineering, petroleum, chemicals and marine products. Besides, Industry body PHDCCI suggested the rationalisation of direct and indirect tax rates to boost consumption in the economy and enhance the tax base. Meanwhile, the income tax department said it has issued refunds of over Rs 1.29 lakh crore in 8 months of the current fiscal. This includes Rs 16,691.50 crore worth refunds to 79.70 lakh taxpayers for Assessment Year 2021-22. Banking stocks will be in limelight as Banks' slippages have declined quarter-over-quarter (QoQ). Total slippages were at Rs 79,951 crore in the Q2 of FY22, as compared to Rs 98,536 crore in the first quarter. Sugar stocks will be in focus with report that cane dues to be paid by sugar mills to farmers stood at Rs 4,445 crore during the 2020-21 season (October-September), with maximum arrears in Uttar Pradesh. There will be some reaction in power stocks as power ministry data showed that India's power consumption grew by 3.6 per cent in November to 100.42 billion units (BU), showing consistent recovery for the second month in a row. The IPO market is hot today with three public issues available for investors to bid on. Star Health and Allied Insurance IPO enters its last day of sale today. On the other hand, Tega Industries IPO was oversubscribed on the first day itself. Along with these two, the IPO of Anand Rathi opens today in a fixed price band of Rs 530-550 per share.


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  • ICICI Bank's alternative asset arm -- ICICI Venture has divested half of its 13.5 per cent stake in the recently concluded IPO of Go Fashion (India). 
  • NTPC has commenced commercial operation of Unit-4 of 250 MW capacity of Nabinagar Thermal Power Project (4X250 MW) of Bhartiya Rail Bijlee Company. 
  • UltraTech Cement has commenced mining of coal from its Bicharpur Coal mines situated in Madhya Pradesh. 
  • Sun Pharmaceutical's arm -- DUSA Pharmaceuticals Inc has reached settlement with Biofrontera to resolve a litigation over misappropriation of trade secrets and unfair practice, following which DUSA will receive $22.5 million (nearly Rs 170 crore).
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