Indian equity benchmarks extended
losses for the second straight session and settled over one and half percent
lower on Monday, as investors fretted over the spread of the Omicron variant of
Covid-19 and looked ahead to the RBI's bi-monthly monetary policy meeting this
week for directional cues. Domestic equities started in the red amid reports
about continues foreign fund outflow. The exchange data showed that foreign
portfolio investors (FPIs) remained net sellers for Rs 3356.17 crore in the
Indian markets. Some concern also came with India Ratings and Research (Ind-Ra)
stating that tightening of norms may increase non-banking finance companies'
(NBFCs) headline non-performing advances (NPA) by around one third. However,
the impact on provisioning could be modest, given NBFCs are using IND-As and
generally for higher rated NBFCs, provision policy is more conservative than
IRAC requirements. Key gauges have extended losses and registered fresh
intra-day lows in late afternoon session. Traders took a note of report that
amid the rising scare from the new coronavirus variant Omicron and ahead of the
MPC meet, SBI house economists have urged the central bank to delay liquidity
normalisation measures through a reverse repo hike, as such a 'prudent step' in
the current situation will give more time for economic recovery to strengthen
further. Traders overlooked Commerce and Industry Minister Piyush Goyal's
statement that India's foreign trade is in comfortable position and the time
has come for India to engage more with the world. Meanwhile, Union Minister of
Micro, Small and Medium Enterprises (MSME) Narayan Rane urged Indian
entrepreneurs to take advantage of closure of factories in China. He said
Indian industrialists should start manufacturing the products which are no
longer produced in China. Finally, the BSE Sensex fell 949.32 points or 1.65%
to 56,747.14 and the CNX Nifty was down by 284.45 points or 1.65% to 16,912.25.
The US markets ended higher on
Monday on easing concerns about the Omicron variant of the coronavirus amid
indications the new strain causes milder symptoms. President Joe Biden's chief
medical adviser Dr. Anthony Fauci said it is too early to make definitive
statements but said early signals regarding the severity of Omicron are
encouraging. Fauci also expressed optimism the Biden administration could lift
travel restrictions on several African nations in a reasonable period of time.
On the sectoral front, Airline stocks skyrocketed amid easing concerns about
the Omicron variant, with the NYSE Arca Airline Index soaring by 5.8 percent.
The index continued to rebound after hitting its lowest levels in a year last
week. Substantial strength was also visible among oil service stocks, as
reflected by the 3.7 percent spike by the Philadelphia Oil Service Index. The
rally by oil service stocks came as the price of crude oil for January delivery
surged $3.23 to $69.49 a barrel. Housing stocks also showed a significant move
to the upside on the day, driving the Philadelphia Housing Sector Index up by
2.5 percent to its best closing level in almost seven months. Steel, financial
and telecom stocks also saw considerable strength, moving higher along with
most of the other major sectors.
Crude oil futures ended sharply
higher on Monday with gain of around five percent as Saudi Arabia's Aramco
hiked prices of its crude exported to Asia and the US and amid easing concerns
about Omicron. Saudi Arabia raised official selling prices for all crude grades
sold to Asia and the US by up to $0.80 from the previous month. The move
suggests that Saudi is very optimistic about demand despite the spread of the
Omicron variant of the coronavirus. Meanwhile, fading prospects of a rise in
Iranian oil exports following the failure of US-Iranian talks on saving the
2015 Iran nuclear deal also contributed to the spike in crude oil prices. Benchmark
crude oil futures for January delivery surged $3.23 or 4.9 percent to settle at
$69.49 a barrel on the New York Mercantile Exchange. Brent crude for February
delivery rose $3.65 or 5.3 percent to settle at $73.53 a barrel on London's
Intercontinental Exchange.
Rupee ended substantially weaker
against dollar on Monday on account of continued dollar demand from importers
and banks and massive sell in domestic stocks as concerns over the new Omicron
variant also continued to weigh on sentiment. Traders' mood was fragile as
country's foreign exchange reserves declined by $2.713 billion to $637.687
billion in the week to November 26, RBI data showed. Investors were worried as
India Ratings and Research (Ind-Ra) stated that tightening of norms may
increase non-banking finance companies' (NBFCs) headline non-performing
advances (NPA) by around one third. On the global front, Sterling edged higher
against dollar on Monday but remained close to a 2021 low hit last week as
investors awaited a speech on monetary policy and economic growth from Bank of
England Deputy Governor Ben Broadbent. Finally, the rupee ended 75.45, weaker
by 33 paise from its previous close of 75.12 on Friday.
The FIIs as per Monday's data
were net seller in both equity and debt segments. In equity segment, the gross
buying was of Rs 7800.55 crore against gross selling of Rs 10755.73 crore,
while in the debt segment, the gross purchase was of Rs 590.86 crore with gross
sales of Rs 854.68 crore. Besides, in the hybrid segment, the gross buying was
of Rs 4.03 crore against gross selling of Rs 11.19 crore.
The US markets ended higher on
Monday as investors shake off Omicron worries, that its risk might not be as
bad as feared. Asian markets are trading mostly in green on Tuesday as Wall
Street rallied on optimism that the omicron variant risk might not be as bad as
feared. Indian markets saw another big sell-off on Monday as the
Omicron-induced volatility accelerated selling by foreign portfolio investors
(FPIs). Today, Sensex and Nifty likely to start the session on a positive note
tracking gains across global markets. Traders will be taking encouragement with
a private report that Indian economy is showing strong signs of recovery from
the devastation caused by the pandemic, with an upswing being reported in 19
out of the 22 economic indicators as compared to the pre-Covid levels.
High-frequency indicators (HFIs) are being monitored to track the progress of
economic recovery in India since the first COVID-19 case was reported in the
country in January 2020. Some support will come as new research from the US
India Strategic Partnership Forum (USISPF) and digital currency exchange
CrossTower has said web 3.0, the idea that the next iteration of the Internet
which will be built on concepts of decentralisation, openness, and greater user
utility, can help India contribute an additional $1.1 trillion of economic growth
to its GDP over the next 11 years. Traders may take note of Minister of State
for Finance Pankaj Chaudhary's statement that India currently has the fourth
largest foreign exchange reserves in the world. However, traders may be
concerned with report that two more cases of the Omicron variant were detected
in Mumbai on Monday, taking the state's tally to 10. This has also pushed the
overall number of Omicron cases in India to 23. Some cautiousness may come with
a private report that the continued effects of the COVID-19 pandemic and
concerns about future public health crises remain top-of-mind for Indian
business leaders for the second consecutive year. There will be some buzz in
the fertilizer industry stocks with Crisil's report that the Centre's fertiliser
subsidy bill is set to soar by 62 per cent over the budgeted amount to Rs 1.3
lakh crore this fiscal due to the massive rise in raw material prices despite
lower demand. Power and coal industry stocks will be in focus as Union minister
Pralhad Joshi said there is no shortage of coal in the country. There will be
some reaction in aviation industy stocks as Minister of State for Civil
Aviation V K Singh said the airlines and airports in India incurred an
estimated loss of Rs 19,564 crore and Rs 5,116 crore, respectively, in 2020-21
due to severe disruption caused by the COVID-19 pandemic. Infrastructure
industry stocks will be in limelight with report that as many as 144 central
infrastructure projects have reported delays (single and multiple) in its completion
in the current financial year and the total cost overrun of these is Rs
14,960.02 crore. RateGain Travel Technologies is open its three-day initial
public offer today. The company has fixed a price band of Rs 405-425 per share
and hopes to garner close to Rs 1,336 crore at the upper price band of the
offer.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
16,912.25
|
16,797.05
|
17,122.10
|
BSE Sensex
|
56,747.14
|
56,362.68
|
57,456.52
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Coal
India
|
241.85
|
148.75
|
147.09
|
151.44
|
ICICI
Bank
|
201.29
|
708.95
|
702.04
|
721.34
|
Tata
Motors
|
174.73
|
467.95
|
462.34
|
477.24
|
State
Bank of India
|
143.53
|
464.95
|
460.16
|
473.36
|
JSW
Steel
|
136.99
|
641.65
|
631.94
|
656.19
|
SBI has invited bids from asset reconstruction companies, and other financial institutions to sell an NPA account KSK Mahanadi Power Company, with a total outstanding against the company standing over Rs 4,100 crore.
Coal India's subsidiary -- Mahanadi Coalfields is planning to set up a 50-MW solar power plant in Odisha's Sambalpur district at a cost of Rs 301.92 crore as part of its goal to achieve carbon neutrality by 2024.
Hero Motocorp has launched the Harley-Davidson Sportster S at India Bike Week 2021.
In a bid to support the Start-Ups operating in identified focus areas, GAIL (India) is planning to invest in such companies through its Start-Up initiative Pankh.