Snapping their
two-day gains, Indian equity benchmarks traded under pressure and finally
settled around the day's low points on Wednesday amid selling across the
sectors. After the flat start, key gauges gradually inched lower as the day
progressed amid foreign fund outflows. Foreign institutional investors (FII)
sold shares worth Rs 628.07 crore on January 3, as per provisional data
available on the NSE. Market participants awaited a slew of U.S. data and the
latest FOMC meeting minutes this week for additional clues on when and where
interest rates might peak. Traders took a note of report that Micro-Finance
Institution Network (MFIN), a self-regulatory organisation (SRO) recognised by
RBI, said that outstanding loan portfolio of the micro-finance institution (MFI)
sector across India will increase around 20.3 per cent at Rs 3.25 lakh crore in
2022-23 compared to the previous fiscal. Markets managed to trim some losses in
late afternoon deals, taking support from reports that India's services sector
growth expanded further in the month of December, with a quicker upturn in new
business boosting output growth. More jobs were created and companies remained
strongly upbeat towards the year-ahead outlook for business activity. As per
the survey report, the seasonally adjusted S&P Global India Services PMI
Business Activity Index surged to 58.5 in December from 56.4 in November.
Further, the S&P Global India Composite PMI Output Index -- which measures
both manufacturing and services -- improved to 59.4 in December from 56.7 in
November. However, markers failed to hold recovery and ended with sharp cuts as
traders shifted focus towards the upcoming quarterly earnings season, with IT
giant TCS likely to unveil its earnings on January 9. Finally, the BSE Sensex
fell 636.75 points or 1.04% to 60,657.45 and the CNX Nifty was down by 189.60
points or 1.04% to 18,042.95.
The US markets ended extremely
volatile session higher on Wednesday as investors looked past Federal Reserve
meeting minutes that showed the central bank will remain aggressive in its
policy to tame high inflation. The Federal Reserve released the minutes of its
December monetary policy meeting, reinforcing expectations the central bank is
likely to continuing raising interest rates. The minutes reiterated that officials
continue to anticipate that ongoing rate increases would be appropriate to
achieve the Fed's dual objectives of maximum employment and price stability.
The Fed noted that the pace of future rate hikes would take into account the
cumulative tightening of monetary policy, the lags with which policy affects
economic activity and inflation, and economic and financial developments. At
the meeting, the Fed decided to raise interest rates by 50 basis points, which
marked a slowdown in the pace of rate hikes following four consecutive 75 basis
point increases. The central bank raised the target range for the federal funds
rate to 4.25 to 4.50 percent, the highest level in 15 years. On the sectoral
front, airline stocks moved sharply higher over the course of the session, with
the NYSE Arca Airline Index soaring by 6.4 percent. Substantial strength was
also visible among gold stocks, driving the NYSE Arca Gold Bugs Index up by 4.9
percent to a nearly seven-month closing high. The rally came as the price of gold
for February delivery $12.90 to $1,859 an ounce. On the economic data front,
the Institute for Supply Management (ISM) released a report showing U.S.
manufacturing activity contracted at a slightly faster rate in the month of
December. The ISM said its manufacturing PMI edged down to 48.4 in December
from 49.0 in November, with a reading below 50 indicating a contraction. Street
had expected the index to slip to 48.5. Manufacturing activity contracted for
the second consecutive month after expanding for 29 straight months, with the
manufacturing PMI falling to its lowest level since hitting 43.5 in May 2020.
Crude oil futures ended sharply
lower on Wednesday, magnifying their previous session's losses, as worries
about energy demand amid rising fears of a global recession continued to weigh
on the commodity. Further, China's decision to increase export of refined oil
products has fueled concerns of weaker demand in the country. Meanwhile,
traders also took note of comment from former New York Federal Reserve
President William Dudley, who said a recession in the U.S. is likely because of
what the Fed has to do. Benchmark crude oil futures for February delivery fell
$4.09 or 5.3 percent at $72.84 a barrel on the New York Mercantile Exchange.
Brent crude for March delivery dropped $4.26 or 5.2 percent at $77.84 a barrel
on London's Intercontinental Exchange.
Indian rupee strengthened against
the dollar on Wednesday, supported by easing crude oil prices. Sentiments were
upbeat after report stated that India's services sector growth expanded further
in the month of December, with a quicker upturn in new business boosting output
growth. More jobs were created and companies remained strongly upbeat towards
the year-ahead outlook for business activity. As per the survey report, the
seasonally adjusted S&P Global India Services PMI Business Activity Index
surged to 58.5 in December from 56.4 in November. Further, the S&P Global
India Composite PMI Output Index -- which measures both manufacturing and
services -- improved to 59.4 in December from 56.7 in November. On the global
front, dollar fell broadly on Wednesday, losing out to commodities currencies
like the Australian dollar and against the euro, which got a lift from a raft
of data that suggested European inflation may finally have peaked. Finally, the
rupee ended at 82.82 (Provisional), stronger by 18 paise from its previous
close of 83.00 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 3319.95 crore against gross selling of Rs 3576.23 crore, while
in the debt segment, the gross purchase was of Rs 496.25 crore against gross
selling of Rs 1329.24 crore. Besides, in the hybrid segment, the gross buying
was of Rs 0.34 crore against gross selling of Rs 4.98 crore.
The US markets ended higher on
Wednesday after a choppy session as investors looked past Federal Reserve
meeting minutes that showed the central bank will remain aggressive in its
policy to tame high inflation. Asian markets are trading mostly in green on
Thursday following a higher close on Wall Street. Indian markets ended lower on
Wednesday as a combination of foreign portfolio investors (FPIs) selling and a
decline in index majors weighted on market sentiments. Loses in financial and
oil, gas shares pulled the headline indices lower. Today, markets are likely to
get positive start tracking gains in global markets. Traders will be taking
encouragement with a private report lowering its projection for India's current
account deficit (CAD) to 2.9% of gross domestic product (GDP) for the current
fiscal year, citing the growth in the country's service exports and a lower oil
price forecast. Some support will come as Bibek Debroy, chairman, Economic
Advisory Council to the Prime Minister, said India's GDP will be close to USD
20 trillion by 2047 and per capita income may reach USD 10,000 (at current
value of USD). Meanwhile, India and France are expected to take stock of their
overall security cooperation during a high-level dialogue on January 05.
However, continued foreign fund outflows likely to limit upside. Foreign
institutional investors (FII) sold shares worth Rs 2,620.89 crore on January 4,
as per provisional data available on the NSE. The weekly F&O expiry may
lead to volatility in the markets today. Also, the markets would react to the
FOMC minutes released overnight which suggests that the Fed will remain
aggressive in its policy to control inflation. Some banking stocks will be in
focus with a report that private sector banks are expected to report healthy
growth in earnings during the October-December quarter of FY23. This would be
aided by robust credit growth, margin expansion, benign credit costs, and lower
provisioning burden. However, operational costs may remain high due to
investment in businesses. There will be some reaction in tyre industry stocks
Automotive Tyre Manufacturers Association said the Indian tyre industry will be
able to scale a turnover of Rs 1 lakh crore in the next three years on the back
of new capacities available.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
18,042.95
|
17,961.36
|
18,183.76
|
BSE
Sensex
|
60,657.45
|
60,391.61
|
61,125.26
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
556.34
|
115.45
|
114.19
|
117.89
|
Tata Motors
|
161.21
|
385.75
|
382.24
|
392.04
|
Oil & Natural Gas Corporation
|
135.35
|
146.40
|
144.65
|
148.50
|
ICICI Bank
|
124.54
|
897.65
|
892.34
|
905.44
|
NTPC
|
119.95
|
167.00
|
164.96
|
168.76
|
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