Indian equity benchmarks traded
buoyantly and ended higher for the third consecutive day on Tuesday, taking
positive cues from global markets. After making positive start, key gauges
turned volatile as traders got anxious with the Centre for Monitoring Indian
Economy (CMIE) in its latest data has showed that the unemployment rate in the
country touched a four-month high of 7.91 percent in December 2021. The
unemployment rate had stood at 7 percent in November, the highest since August
which was at 8.3 percent. But, markets soon gained traction, taking support
from government data showing that India's exports surged 37 percent on an
annual basis to $37.29 billion in December 2021, the highest-ever monthly
figure, on the back of healthy performance by sectors like engineering, textiles
and chemicals, even as the trade deficit widened to $21.99 billion. Imports in
December too rose by 38 per cent to $59.27 billion on account of an increase in
oil imports, which soared 65.17 per cent to $15.9 billion. Key gauges extended
gains in late afternoon session, as traders remain energized with a another
private report stating that export-dependent software companies are set to
report a strong sequential revenue growth in the range of 2.6 to 6 per cent in
the seasonally weak December quarter. Some optimism also came with Union
Commerce and Industry Minister Piyush Goyal's statement that the Omicron
variant of COVID-19 will be a short-term disruption on businesses, adding that
supply chains and industrial activities will continue at full speed. In another
positive development, foreign institutional investors stood as buyer with net
buying of shares worth Rs 902.64 crore, while domestic institutional investors'
net purchased shares worth Rs 803.11 crore in the Indian equity market on 3
January. Finally, the BSE Sensex rose 672.71 points or 1.14% to 59,855.93 and
the CNX Nifty was up by 179.55 points or 1.02% to 17,805.25.
The US markets ended mostly in
red on Tuesday. A continuing spike in bond yields to start the new year caused
investors to rotate out of tech stocks, sending the Nasdaq lower. Losses in
tech shares that were big winners last year like Nvidia and Tesla weighed on
the broader market. The sharp pullback by Nasdaq partly reflected substantial
weakness among software and biotechnology stocks. Reflecting the weakness in
the sectors, the Dow Jones US Software Index and the NYSE Arca Biotechnology
Index plunged by 2.5 percent and 2.1 percent, respectively. Healthcare and
pharmaceutical stocks also moved notably lower on the day. However, the Dow
Jones Industrial Average rose for a second day to start 2022 as investors bet
on the kinds of stocks that would benefit from a robust economy this year
despite the omicron threat. Significant strength was visible among banking
stocks, as reflected by the 3.4 percent jump by the KBW Bank Index. Banking
stocks benefited from a continued increase by Treasury yields, with notable
gains by financial giants JPMorgan Chase and Goldman Sachs contributing to the
upward move by the Dow.
Crude oil futures settled higher
on Tuesday after the Organization of the Petroleum Exporting Countries (OPEC)
and its allies announced they would stick to their plan to raise monthly crude
production by 400,000 barrels per day in February. The OPEC and its allies took
the expected decision following a meeting. The group's next meeting will take
place on February 2nd. Further, Oil prices were also up owing to easing
concerns about the outlook for energy demand after studies showed the new
Omicron variant causes milder symptoms. Benchmark crude oil futures for February
delivery gained $0.91 or 1.2 percent to settle at $76.99 a barrel on the New
York Mercantile Exchange. Brent crude for March delivery rose $0.89 or 1.1
percent to settle at $79.87 a barrel on London's Intercontinental Exchange.
Snapping its three-day gaining
streak, Indian rupee depreciated against dollar on Tuesday due to demand for
American currency from banks and importers. Growing concerns over the Omicron
variant of coronavirus and its impact on economic recovery weighed on the local
unit. Traders shrugged off government data showing that India's exports surged
37 percent on an annual basis to $37.29 billion in December 2021, the
highest-ever monthly figure, on the back of healthy performance by sectors like
engineering, textiles and chemicals, even as the trade deficit widened to
$21.99 billion. Imports in December too rose by 38 per cent to $59.27 billion
on account of an increase in oil imports, which soared 65.17 per cent to $15.9
billion. On the global front, dollar rose to a five-year high versus the yen on
Tuesday, boosted by expectations of U.S. Federal Reserve rate hikes, as
investors bet that the fast-spreading Omicron coronavirus variant would have
limited economic impact. Finally, the rupee ended 74.58 (Provisional), weaker
by 29 paise from its previous close of 74.28 on Monday.
The FIIs as per Tuesday's data
were net buyers in equity segment, while they were net sellers in debt segment.
In equity segment, the gross buying was of Rs 6106.70 crore against gross
selling of Rs 3790.11 crore, while in the debt segment, the gross purchase was
of Rs 259.55 crore with gross sales of Rs 479.85 crore. Besides, in the hybrid
segment, the gross buying was of Rs 1.21 crore against gross selling of Rs 4.06
crore.
The US markets ended mostly lower
on Tuesday amid selective profit-taking. Asian markets are trading mixed on
Wednesday amid concerns about the increasing Omicron cases across regions.
Indian markets extended gains to a third straight day on Tuesday, led by
financial, oil & gas and IT stocks, though losses in healthcare stocks
played spoilsport. Today, the start of session is likely to be weak amid mixed
global market cues and the rapidly rising cases of covid-19 in the country.
According to the Union health ministry's data updated a total of 1,892 cases of
Omicron variant of coronavirus have been detected across 23 states and Union
Territories so far. India's Covid tally rose to 3,49,60,261 with 37,379 new
cases, while the active cases increased to 1,71,830. There will be some
cautiousness as a private report indicated that growth might be impacted by up
to 0.30 per cent in the March quarter as normal economic activities come under
pressure due to restrictions being imposed by more states to curb rising Omicron
cases. However, some support may come as State Bank of India former chairman
Rajnish Kumar said the country needs to accelerate economic growth to above
eight per cent to achieve its target of becoming a $5-trillion economy by 2025.
For a growth of eight per cent and above, he said, the country needs a huge
investment in the economy, lower tax rates that can ensure surplus in the hands
of the people as well as of corporates, ease of doing business at the lower
level and availability of land. Traders may take note of report that with the
country's outbound shipments all set to cross $400 billion this fiscal year,
the commerce ministry is planning to launch Brand India Campaign to give
momentum to exports of both services and products in new markets. There will be
some reaction in road sector stocks as domestic rating agency Icra said the
Indian road logistic sector is likely to witness healthy growth in FY2022 on
the back of demand recovery and improved business activities. The optimism
stems from the favourable scenario wherein most players reported strong growth
in freight volumes on a sequential basis in the second quarter of FY'22, and
the momentum is likely to continue in the third quarter of the ongoing fiscal.
Textile industry stocks will be in focus as Union Minister Piyush Goyal said
the government is making efforts towards gaining access to new markets and
getting concessional duties on textile products through free-trade agreements.
Support and Resistance: NSE (Nifty) and BSE
(Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
17,805.25
|
17,656.66
|
17,890.71
|
BSE Sensex
|
59,855.93
|
59,314.45
|
60,167.38
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
NTPC
|
339.86
|
132.50
|
128.40
|
134.95
|
Tata
Motors
|
241.00
|
489.35
|
482.60
|
497.55
|
State
Bank of India
|
232.96
|
483.75
|
474.96
|
488.61
|
Oil
& Natural Gas Corporation
|
163.51
|
148.30
|
144.74
|
150.24
|
Coal
India
|
137.44
|
153.00
|
151.35
|
155.65
|
HDFC Bank's advances have aggregated to around Rs 12,600 billion as of December 31, 2021, a growth of around 16.4% over Rs 10,823 billion as of December 31, 2020.
Maruti Suzuki India has exported 205,450 vehicles in CY 2021.
Axis Bank has concluded structured derivative transactions with leading Indian corporates.
L&T's construction arm -- L&T construction has won a prestigious order for its Heavy Civil Infrastructure business from DMRC for the design and construction of the Underground Metro Project of Phase-1 of Patna MRTS.