Indian equity benchmarks
retreated from the record highs and settled lower on Wednesday, as heavyweight
stocks such as ITC, Reliance Industries and Bajaj Finance witnessed sharp
profit booking. That apart, weak global cues heavily weighed on the investor
sentiment. Markets were trading flat for most part of the day, as traders were
cautious with the World Bank in its Global Economic Prospects report has stated
that India's economy is estimated to contract by 9.6 per cent in the fiscal
year 2020-21 (FY21), reflecting a sharp drop in household spending and private
investment. Report said that the informal sector, which accounts for
four-fifths of employment, has been subject to severe income losses during the
COVID-19 pandemic. In India, the pandemic hit the economy at a time when growth
was already decelerating. Traders also took note of a Reserve Bank paper
stating that an increase in credit may not always find its way towards
investments as business entities may use credit lines to finance their current
liabilities. Benchmarks added losses in late afternoon session, after India's
services sector activity expanded at a slower pace in December as rates of
growth in sales eased to a three-month low and staff hiring came to a halt amid
weak business optimism. The seasonally adjusted India Services Business
Activity Index fell from 53.7 in November to 52.3 in December. The index was
above the critical 50 mark that separates growth from contraction for the third
month in a row during December, but pointed to the slowest pace of expansion in
the three-month sequence. However, markets managed to trim some losses as some
optimism remained among traders with the Finance Ministry's report that
approval of the long-awaited COVID-19 vaccine provides strength to the optimism
on both health and economic fronts, despite continuing surge in global cases
and the potential challenge of a mutant strain. Finally, the BSE Sensex fell
263.72 points or 0.54% to 48,174.06, while the CNX Nifty was down by 53.25
points or 0.38% to 14,146.25.
The US markets ended mostly
higher on Wednesday as traders reacted to the results of the highly anticipated
Georgia runoff elections on Tuesday. Democratic candidate Rev. Raphael Warnock
is projected to win his race against Republican Senator Kelly Loeffler, while
the race between Jon Ossoff and GOP Senator David Perdue is too close to call
but the Democrat is in the lead. If Ossoff holds onto his narrow lead, the
Senate would be split 50-50, with a tie-breaking vote by Vice President-elect
Kamala Harris giving Democrats control of the chamber. However, the Nasdaq
closed lower, as tech stocks could be hurt by the shift into cyclical stocks as
well as the higher taxes sought by many Democrats. On the economic data front,
a report released by the Commerce Department showed new orders for U.S.
manufactured goods increased by more than expected in the month of November.
The Commerce Department said factory orders surged up by 1.0 percent in
November after jumping by an upwardly revised 1.3 percent in October. Street
had expected factory orders to climb by 0.7 percent compared to the 1.0 percent
increase originally reported for the previous month. Meanwhile, with the impact of the coronavirus
pandemic on the labor market intensifying, payroll processor ADP released a
report showing an unexpected drop in private sector employment in the U.S. in
the month of December. ADP said private sector employment fell by 123,000 jobs
in December after jumping by a downwardly revised 304,000 jobs in November. The
decrease surprised participants, who had expected employment to climb by about
88,000 jobs compared to the addition of 307,000 jobs originally reported for
the previous month.
Crude oil futures ended higher on
Wednesday as weekly US crude supplies dropped by 8 million barrels, down a
fourth straight week. The Energy Information Administration (EIA) reported that
US crude inventories fell by 8 million barrels for the week ended January 1.
That compared with the decline of 1.2 million barrels forecast by IHS Markit
analysts. The American Petroleum Institute on Tuesday reported a 1.7
million-barrel fall in crude supplies. Besides, oil prices also continued to
find support from Saudi Arabia's announcement Tuesday of a unilateral
production cut. Crude oil futures for February rose 70 cents or 1.4 percent to
settle at $50.63 a barrel on the New York Mercantile Exchange. March Brent
crude gained 70 cents or 1.3 percent to settle at $54.30 a barrel on London's
Intercontinental Exchange.
Erasing previous session
drubbing, Indian rupee ended higher against dollar on Wednesday, on persistent
selling of the American currency by exporters. Traders took some solace as the
finance ministry said the impending vaccination drive in various countries,
coupled with sustained improvement in high frequency indicators, helped the
economy perform better in H2FY21. However, upside remain capped as World Bank
in its Global Economic Prospects report states that India's economy is
estimated to contract by 9.6 per cent in the fiscal year 2020-21 (FY21),
reflecting a sharp drop in household spending and private investment. On the
global front, pound edged higher for a second consecutive session on Wednesday
as the U.S. dollar weakened after Democrats took the lead in runoff votes that
will determine control of the U.S. Senate. Finally, the rupee ended at 73.11, 6
paise stronger from its previous close of 73.17 on Tuesday.
The FIIs as per Wednesday's data
were net seller in equity segment, while net buyer in debt segment. In equity
segment, the gross buying was of Rs 7273.61 crore against gross selling of Rs
7466.86 crore, while in the debt segment, the gross purchase was of Rs
605.71crore with gross sales of Rs 416.94 crore. Besides, in the hybrid
segment, the gross buying was of Rs 6.86 crore against gross selling of Rs 8.99
crore.
The US markets ended mostly
higher on Wednesday after swarms of protesters stormed the US Capitol as they
sought to force Congress to undo President Donald Trump's election loss to Joe
Biden. Asian markets are trading in green on Thursday as investors remained
confident that violence in Washington would not disrupt a legitimate transition
to a new presidency or derail political support for a US economic recovery.
Indian markets ended lower on Wednesday dragged by selling in IT and FMCG
stocks amid mixed global cues. Today, the start of session is likely to be
optimistic tracking firm Asian cues. Some support will come with report that
the currency in circulation (CIC) expanded by 22.1 per cent in calendar year
2020, as people hoarded cash at a time when the nation went into a lockdown and
uncertainty prevailed over how liquidity needs would be met. Data released by
the Reserve Bank of India showed that in calendar year 2020, the currency in
circulation growth was way higher than 2019's 11.8 per cent growth rate.
However, there may be some cautiousness with rising coronavirus cases in the
country. With 20,460 fresh Covid-19 cases, India's caseload now stands at
10,395,938. The country's death toll has mounted to 150,372. Meanwhile, the
number of people who have tested positive for the new UK variant of SARS-CoV-2
in the country has climbed to 73. Meanwhile, digital services taxes adopted by
India, Italy and Turkey discriminate against U.S. companies and are
inconsistent with international tax principles, the US Trade Representative's
office said on Wednesday, paving the way for potential retaliatory tariffs.
There will be some buzz in NBFCs stocks with ICRA's report that non-banking
finance companies (NBFCs) are likely to see a 7-9 per cent growth in their
asset under management (AUM) in FY2022 but access to funding would be crucial
for them to have a sustained improvement. Telecom stocks will in focus after
the government said it will auction wireless spectrum in seven bands on March
01. Spectrum will be offered in seven frequency bands of 700 MHz, 800 MHz, 900
MHz, 1800 MHz, 2100 MHz, 2300 MHz, and 2500 MHz. There will be some reaction in
auto stocks with a private report stating that the demand recovery for
automobiles continued in the December quarter, with strong momentum witnessed
in retail sales of tractors and passengers vehicles.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
14,146.25
|
14,042.71
|
14,246.96
|
BSE
Sensex
|
48,174.06
|
47,819.92
|
48,572.44
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Motors
|
756.22
|
195.40
|
191.50
|
198.45
|
Oil
& Natural Gas Corporation
|
503.06
|
96.95
|
95.70
|
98.75
|
ITC
|
490.68
|
205.40
|
202.76
|
209.76
|
Gail
India
|
455.48
|
134.00
|
131.00
|
136.50
|
State
Bank of India
|
407.66
|
285.05
|
281.25
|
289.00
|
HDFC is planning to raise up to Rs 5,000 crore by issuing bonds on private placement basis to meet its business requirements.
Kotak Mahindra Bank's subsidiary -- Kotak Securities is setting aside a corpus of Rs 50 crore to invest in startups and financial technology companies.
ONGC is planning to raise Rs 1,500 crore on private placement basis, through the issuance of unsecured, listed, redeemable, non-cumulative, taxable, NCDs.
Tata Steel has collaborated with CII Green Business Centre and relevant stakeholders in the Indian Steel sector to develop GreenPro framework for steel rebars, for first time in India.