Indian equity benchmarks
continued their bull run for fourth straight session on Wednesday, with Sensex
reclaiming the psychological 60,000 levels and Nifty ended above 17,900 mark.
Markets made cautious start, amid concerns about increasing cases of the
Omicron variant of COVID-19. Traders also remain worried with 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, key gauges
soon turned positive, as traders turned optimistic with State Bank of India
former chairman Rajnish Kumar's statement that country needs to accelerate
economic growth to above eight per cent to achieve its target of becoming a
$5-trillion economy by 2025. Sentiments remained positive in the second half of
the session, as commerce ministry is planning to launch Brand India Campaign to
give momentum to exports of both services and products in new markets, as the
country's outbound shipments all set to cross $400 billion this fiscal year.
This campaign would serve as an umbrella campaign for promoting goods and
services exported by India. Traders took some support with Apparel Export
Promotion Council (AEPC) Chairman A Sakthivel stating that strong demand and
healthy order books will further help in boosting the country's exports in the
coming months. Traders overlooked report that India's services sector expanded
for a fifth straight month in December, though the growth pace was slower against the previous month, as demand rose
but concerns over another wave of COVID-19 and inflationary pressures cast a shadow
over the outlook. Services Purchasing Managers' Index, compiled by IHS Markit,
eased to 55.5 in December from 58.1 in November, the lowest since September but
still well above the 50-mark that separates growth from contraction. Finally,
the BSE Sensex rose 367.22 points or 0.61% to 60,223.15 and the CNX Nifty was
up by 120.00 points or 0.67% to 17,925.25.
The US markets ended sharply
lower on Wednesday as the Fed minutes seemed to have a more hawkish tone,
raising concerns the central bank will be more aggressive than anticipated.
According to the minutes of the December 14-15 meeting, members of the Fed are
preparing to begin reducing the size of the central bank's approximately $8.8
trillion balance sheet soon after raising interest rates. While the previous
balance sheet runoff commenced almost two years after policy rate liftoff,
participants judge that the appropriate timing this time around would likely be
closer to that of policy rate liftoff. The minutes said they noted that current
conditions included a stronger economic outlook, higher inflation, and a larger
balance sheet and thus could warrant a potentially faster pace of policy rate
normalization. The discussions about reducing the size of the central bank's
balance sheet came as the Fed also agreed to accelerate the pace of reductions
to its asset purchases, with the program currently slated to come to an end in
mid-March. Meanwhile, traders have largely shrugged off a report from payroll
processor ADP showing much stronger than expected private sector job growth in
the month of December. ADP said private sector employment spiked by 807,000
jobs in December after jumping by a revised 505,000 jobs in November. Street
had expected private sector employment to increase by 400,000 jobs compared to
the addition of 534,000 jobs originally reported for the previous month. On the
sectoral front, Software stocks extended a recent downward move on the day,
dragging the Dow Jones US Software Index down by 4.5 percent to its lowest
closing level in three months.
Crude oil futures ended higher on
Wednesday, magnifying their previous sessions' gains, even as a report from the
Energy Information Administration showing US crude oil inventories decreased by
less than expected in the week ended December 31st. The report showed crude oil
inventories fell by 2.1 million barrels last week versus expectations for a
decrease of about 3.3 million barrels. The EIA also said gasoline inventories
spiked by 10.1 million barrels, while distillate fuel inventories increased by
4.4 million barrels. Besides, the price of crude oil reached its highest levels
in over a month amid continued optimism the Omicron variant of the coronavirus
will not significantly impact global demand. Benchmark crude oil futures for
February delivery surged $1.32 or 1.7 percent to settle at $78.31 a barrel on
the New York Mercantile Exchange. Brent crude for March delivery rose $1.22 or
1.5 percent to settle at $81.22 a barrel on London's Intercontinental Exchange.
Erasing prevision session losses,
Indian Rupee ended fairly higher against US dollar on Wednesday, on the back of
selling of the American currency by exporters. Besides, gains in domestic
equity markets also provided support to the rupee. Sentiments were buoyant as
commerce ministry is planning to launch Brand India Campaign to give momentum
to exports of both services and products in new markets, as the country's
outbound shipments all set to cross $400 billion this fiscal year. Traders took
some support with Apparel Export Promotion Council (AEPC) Chairman A Sakthivel
stating that strong demand and healthy order books will further help in
boosting the country's exports in the coming months. On the global front,
dollar held below two-week highs on Wednesday as traders awaited the release of
minutes from the Federal Reserve's December meeting, with growing expectations
of a rate hike as early as March keeping the yen pinned near a five-year low. Finally,
the rupee ended 74.38 (Provisional), stronger by 20 paise from its previous
close of 74.58 on Tuesday.
The FIIs as per Wednesday'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 5778.38 crore against gross
selling of Rs 4421.83 crore, while in the debt segment, the gross purchase was
of Rs 98.44 crore with gross sales of Rs 224.44 crore. Besides, in the hybrid
segment, the gross buying was of Rs 10.99 crore against gross selling of Rs 12.62
crore.
The US markets ended lower on
Wednesday after U.S. Federal Reserve meeting minutes signaled the central bank
may raise interest rates sooner than expected. Asian markets are trading mostly
in red on Thursday following a hefty sell-off on Wall Street. Indian markets
closed almost 6-week highs on Wednesday as it extended gains for the third
straight session this year, led by banking and financial-based rally. Today,
the markets are likely to get gap-down opening amid global sell-off. Rising
coronavirus cases in the country are also likely to impact the markets. The
Centre said India is witnessing an exponential rise in the number of Covid-19
cases, which is believed to be driven by the Omicron variant. India has
reported over 6.3 times rise in Covid-19 cases in the last eight days. The
total number of COVID-19 cases rose by 58,097 in the last 24 hours, as per a
government update on January 5. The Health Ministry said that 43 districts in
India are reporting a weekly positivity between 5 per cent to 10 per cent now.
Traders will be concerned as ICRA Ratings warned that the third wave of the
pandemic, which has seen a massive spike in infections after the more
infectious Omicron variant of the coronavirus appeared, is likely to shave 40
bps off the fourth quarter GDP growth that may print in at 4.5-5 per cent.
There will be some cautiousness with a private report that as COVID-19
infections spike in the country resulting in restrictions in various states and
impacting the fragile recovery, many market participants are expecting RBI to
delay the policy normalisation move, which is expected in the February review.
Meanwhile, the government has permitted qualified jewellers to import certain
kinds of gold including certain unwrought forms through India International
Bullion Exchange IFSC. Sugar stocks will be in focus as the Centre issued
guidelines for restructuring of loans taken by mills from the Sugar Development
Fund (SDF), providing a moratorium for two years and then repayment in five
years to eligible defaulting factories. There will be some reaction in real
estate industry stocks with a private report that housing sales across top
eight cities rose 51 per cent last year, even as the office market continued to
slump due to the COVID pandemic with gross leasing witnessing a 3 per cent
fall. Liquor companies stocks will be in limelight with report that liquor
companies are appealing to state governments to allow them to raise prices amid
surging costs of inputs ranging from tamper-proof caps to extra-neutral
alcohol, the primary raw material.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
17,925.25
|
17,801.16
|
17,997.01
|
BSE Sensex
|
60,223.15
|
59,812.12
|
60,483.46
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State
Bank of India
|
246.94
|
491.70
|
482.24
|
498.09
|
ICICI
Bank
|
197.41
|
787.00
|
773.51
|
798.16
|
NTPC
|
161.22
|
131.80
|
130.71
|
132.86
|
Tata
Motors
|
154.20
|
487.85
|
483.35
|
492.55
|
Indian
Oil Corporation
|
142.49
|
117.30
|
114.91
|
118.56
|
GAIL (India) has completed the acquisition of bankrupt Infrastructure Leasing and Financial Services' 26 per cent equity stake in OTPC.
Dr Reddy's Laboratories is planning to launch Molflu (Molnupiravir) at Rs 35 per capsule to treat COVID-19 in the country.
L&T's Heavy Engineering arm has won significant contracts for its various business segments in Q3 of FY22.
SBI has decided to enhance the free IMPS online transactions limit to Rs 5 lakh from the Rs 2 lakh in order to encourage customers to adopt digital banking.