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NSE Intra-day chart (02 December 2021)
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Market Commentary 03 December 2021
Markets to start session in red amid worries over Omicron variant


Key benchmark indices extended previous session's rally to close at day's high and up over a percent on Thursday, backed by strong buying interest across sectors despite largely negative cues from global peers amid fears about the new Omicron variant. The broader markets also closed higher. After a flat start, key gauges picked up pace, as sentiments got a boost with data showing that 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. Sentiments remained up-beat with Union Minister for Electronics and Information Technology Ashwini Vaishnaw's statement that the government is keen to make India a $250 billion electronic manufacturing hub in the next five years. He also expressed happiness over the electronics manufacturing industry assuring $300 billion revenue by 2025-26. Markets continued to trade with strength in second half of the session, as traders remain energized as the PHD Chamber of Commerce and Industry (PHDCCI) has suggested the rationalisation of direct and indirect tax rates, with an aim to boost consumption in the economy and enhance the tax base. PHDCCI President Pradeep Multani said refuelling of consumption demand should be the theme of the Budget to have a multiplier effect on production possibilities, private investments and employment creation in the country. Market participants overlooked the Reserve Bank of India (RBI) stating 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. Traders also took a 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. Finally, the BSE Sensex rose 776.50 points or 1.35% to 58,461.29 and the CNX Nifty was up by 234.75 points or 1.37% to 17,401.65.


The US markets ended higher on Thursday on bargain hunting following the steep drop seen as Wednesday's trading day progressed. The strong move to the upside extended the rollercoaster ride stocks have been on since news of the detection of omicron variant of the coronavirus. Traders have seemed extremely sensitive to omicron-related news amid concerns the variant could derail the economic recovery even as the Federal Reserve begins scaling back stimulus. On the sector front, Airline stocks showed a substantial rebound on the day, with the NYSE Arca Airline Index soaring by 6.5 percent after plummeting to its lowest closing level in a year in the previous session. Considerable strength was also visible among housing stocks, as reflected by the 4.1 percent spike by the Philadelphia Housing Sector Index. Banking stocks also turned in a strong performance, driving the KBW Bank Index up by 3.4 percent. The index bounced off a two-month closing low. On the economic data front, the Labor Department released a report showing a modest rebound by initial jobless claims in the week ended November 27th. The report said initial jobless claims rose to 222,000, an increase of 28,000 from the previous week's revised level of 194,000. Street had expected jobless claims to climb to 240,000 from the 199,000 originally reported for the previous week.


Crude oil futures ended higher on Thursday on growing concerns over energy demand from the emergence of the omicron variant of coronavirus. The new omicron variant of COVID-19 could cost the global oil market as much as 2.9 million barrels per day (bpd) of demand in the first quarter of 2022, bringing total expected demand down from 98.6 million bpd to 95.7 million bpd, if it triggers more lockdowns or restriction. Meanwhile, a group of major oil producers decided to rollover their existing production policy and boost output at the start of next year. The Organization of the Petroleum Exporting Countries and their allies, together known as OPEC+, decided to rollover their current policy and raise monthly overall production by 400,000 barrels per day in January. Benchmark crude oil futures for January delivery rose 93 cents or 1.4 percent to settle at $66.50 a barrel on the New York Mercantile Exchange. Brent crude for February delivery rose 80 cents or 1.2 percent to settle at $69.67 a barrel on London's Intercontinental Exchange.


Indian rupee ended lower against the US dollar on Thursday, on increased demand for the greenback from importers and bank. Sentiments were fragile as India's merchandise trade deficit rose to a fresh record high of $23.2 billion in November on account of falling exports and sticky imports. Traders were also worried with 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. On the global front, Foreign-exchange market volatility hovered near a nine-month peak on Thursday as traders weighed the risks posed by a more hawkish Federal Reserve amid ongoing uncertainty about the threat from Omicron. Finally, the rupee ended 75.03 (Provisional), weaker by 12 paise from its previous close of 74.91 on Wednesday.


The FIIs as per Thursday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 8598.43 crore against gross selling of Rs 11355.64 crore, while in the debt segment, the gross purchase was of Rs 274.74 crore with gross sales of Rs 819.19 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.21 crore against gross selling of Rs 5.36 crore.


The US markets ended higher on Thursday on hopes that Omicron may not severely impact economic recovery and continued dip in jobless claims. Asian markets are trading mostly in red on Friday as investors continue to monitor the situation surrounding the omicron Covid variant. Indian markets continued their strong bounce for a second straight day on Thursday, powered by buying across sectors led by financial, IT and oil & gas counters. Today, markets are likely to take a breather, after two days of back-to-back rallies, and make a negative start, tracking weakness across other Asian markets despite gains on Wall Street overnight. Uncertainty surrounding the Omicron variant is likely to be concern for market participants. India reported its first two cases of the Omicron coronavirus variant on Thursday but the government said it had no immediate plan to authorise booster vaccine shots despite demands from lawmakers. The union health ministry said two male patients with the new strain, aged 66 and 46 years, had shown mild symptoms in Karnataka. Also, continued foreign fund outflow likely to weight on market sentiments. Provisional data showed on the NSE that foreign portfolio investors (FPIs) remained net sellers for Rs 2765.84 crore in the Indian markets. However, some respite may come with the Centre for Monitoring Indian Economy's statement that the index of consumer sentiment for rural India inched up marginally by 0.3% for the week ended November 28 while the index for consumer expectation went up by 1.3%, a much lower jump compared to weeks before the announcement of the repeal of farm laws. Some support may come as Reserve Bank of India data showed that reflecting the steady pace of banking business, the credit rose by 6.97 per cent in 12 months ended November 19, 2021. The outstanding credit of commercial banks stood at Rs 111.62 trillion, up from Rs 10.4.34 trillion a year ago. Aviation industry stocks will be in limelight as International Air Transport Association said the sudden emergence of Covid-19's Omicron variant may force countries to re-impose extensive travel restrictions. There will be some buzz in the telecom industry stocks with report that spectrum auctions for the 5G services are expected to be held early next year. Cement industry stocks will be in focus as rating agency Crisil said retail prices of cement is likely to rise again by another Rs 15-20 over the next few months and touch an all-time high of around Rs 400 per bag this fiscal, because of high prices of inputs such as coal and diesel. There will be some reaction in logistics industry stocks with a private report that the road logistics market in India is expected to grow at a compounded annual growth rate of 8 per cent in the next five years, to reach $330 billion by 2025. Meanwhile, Anand Rathi Wealth IPO was fully subscribed on day one of the initial share sale on Dalal Street. On the other hand, Tega Industries enters the final day of sale after having been subscribed 13.87 times.


                                Support and Resistance: NSE (Nifty) and BSE (Sensex)



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Coal India






  • Infosys has extended strategic collaboration with Proximus to digitally transform, develop, and maintain their IT applications with leading AI and automation solutions. 
  • Coal India's coal production has increased by 4.1% to 53.8 million tonnes in November, 2021 as against 51.7 million tonnes in November 2020. 
  • Kotak Mahindra Bank has entered into agreement with Worldline, a Europe-based payment and transactional service firm. 
  • L&T and ReNew Power have entered into partnership agreement to tap the emerging green hydrogen business in India.
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