Indian equity benchmarks bounced
back strongly after two sessions of sharp losses amid positive global cues as
concerns about the Omicron coronavirus variant eased. Markets opened a day with
good gap and managed to hold its bullish stream throughout day, as traders took
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. Some optimism also came in 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 decentralization, 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. Benchmarks extended gains in late afternoon session, taking
support from Minister of State for Finance Pankaj Chaudhary's statement that
India currently has the fourth largest foreign exchange reserves in the world.
Some solace also came as the government said it is taking all steps to
strengthen the National Company Law Tribunal (NCLT) to reduce delays in disposal
of cases under the insolvency law. Adding to the optimism, Credit rating
agency, India Ratings and Research (Ind-Ra) in its latest report has said that
the strong initial public offering (IPO) issuances in FY22 in the Indian
buoyant stock market bode well with the country's economic recovery. Market
participants overlooked domestic credit rating agency ICRA's report stated that
the looming threat of the newly discovered Omicron variant of Covid-19 can
severely affect loan securitisation volumes in the country as concerns over
retail asset quality reemerge. Finally, the BSE Sensex rose 886.51 points or
1.56% to 57,633.65 and the CNX Nifty was up by 264.45 points or 1.56% to
17,176.70.
The US markets ended higher on
Tuesday following the rally seen in previous session. Easing concerns about the
impact of the Omicron variant of the coronavirus contributed to the continued
strength on Markets. Indications the variant causes milder symptoms has helped
offset worries the new strain could derail the global economic recovery. On the
sectoral front, with Intel helping lead the way higher, semiconductor stocks
showed a substantial move to the upside on the day. Reflecting the strength in
the sector, the Philadelphia Semiconductor Index skyrocketed by 5 percent to a
new record closing high. Networking stocks also saw significant strength on the
day, driving the NYSE Arca Networking Index up by 3.6 percent. On the economic
data front, the Commerce Department released a report showing the US trade
deficit narrowed significantly in the month of October amid a spike in the
value of exports. The report said the trade deficit decreased to $67.1 billion
in October from a revised $81.4 billion in September. Street had expected the
deficit to narrow to $67.5 billion from the $80.9 billion originally reported
for the previous month. The narrower trade deficit came as the value of exports
soared by 8.1 percent to $223.6 billion, while the value of imports climbed by
0.9 percent to $290.7 billion.
Crude oil futures ended higher on
Tuesday, magnifying their previous session's rally, on rising optimism about
the outlook for energy demand. Reports said that the Omicron variant of the
coronavirus is unlikely to impact the global economic recovery has raised hopes
about strong demand for oil. A South African health official reportedly said
over the weekend that Omicron cases in South Africa had shown only mild
symptoms. Top US infectious disease expert Anthony Fauci also commented that
there did not appear to be a great degree of severity with the variant so far.
Besides, oil prices also got a lift following the delay in the return of
Iranian oil into the market as indirect nuclear talks between the US and Iran
have failed so far. Benchmark crude oil futures for January delivery surged
$2.56 or 3.7 percent to settle at $72.05 a barrel on the New York Mercantile
Exchange. Brent crude for February delivery rose 2.30 or 3.15 percent to settle
at $75.38 a barrel on London's Intercontinental Exchange.
Indian rupee shed most of its
early gains but still managed to end marginally higher against the American
currency on Tuesday, due to selling of the US currency by exporters and banks.
Traders took solace 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. However, upside remain capped with credit rating agency ICRA's report
stated that the looming threat of the newly discovered Omicron variant of
Covid-19 can severely affect loan securitisation volumes in the country as
concerns over retail asset quality reemerge. On the global front, sterling was
slightly higher on Tuesday, while some in the market bet that the Bank of
England will raise interest rates in February 2022 after keeping them unchanged
this month. Finally, the rupee ended 75.44 (Provisional), stronger by 1 paise
from its previous close of 75.45 on Monday.
The FIIs as per Tuesday's data
were net seller in both equity and debt segments. In equity segment, the gross
buying was of Rs 4275.56 crore against gross selling of Rs 7265.28 crore, while
in the debt segment, the gross purchase was of Rs 157.32 crore against gross
selling of Rs 606.65 crore. Besides, in the hybrid segment, the gross buying
was of Rs 14.00 crore against gross selling of Rs 27.50 crore.
The US markets ended higher on
Tuesday as fears of Omicron continued to recede and investors bet on a Santa
(December end) rally. Asian markets are trading mostly in green on Wednesday
amid a global relief rally amid positive news in early reports about the
potential impact of the Omicron variant of COVID-19. Indian markets made a
comeback on Tuesday to close 1.6 percent higher each following two days of
steep losses. Today, the markets are likely to continue their gaining momentum
with positive start following rally in global markets and ahead of RBI policy
outcome. Investors will be looking ahead to the Reserve Bank of India's (RBI's)
MPC's decision later in the day following a three-day policy meeting. The RBI's
six-member monetary policy committee (MPC), headed by Governor Shaktikanta Das,
is likely to maintain key interest rates for a ninth straight meeting,
retaining an accommodative stance amid the threat surrounding Omicron
coronavirus variant. Traders may take note of global rating agency S&P's
statement that the impact of the new coronavirus variant on India's economic
outlook would be contained. It expects India's economy to grow 9.5% in FY22 and
7.8% in FY23. Andrew Wood, director, sovereign ratings, S&P said we are
seeing a healthy recovery. However, there may be some cautiousness with a
private report that after falling marginally for two weeks, the cost of
debt-funds for the states jumped again as the weighted average cost of
borrowings rose by 37 bps to a one-month high of 6.80 per cent in the auction
on December 07 compared to the last week. There will be some buzz in the sugar
industry stocks as trade body AISTA said sugar mills have exported 9.39 lakh
tonnes of the sweetener till the first week of December during the ongoing
2021-22 marketing year that started from October 1, and are not in hurry to
sell further stock in view of sluggish global price trend. Aviation stocks will
be in focus as rating agency ICRA said continuing on the recovery path,
domestic air passenger traffic crossed the 10-million mark in November for the
first time since the pandemic hit the aviation industry in March last year but
the coronavirus' new variant Omicron has the potential to spoil the party.
There will be some reaction in infrastructure industry stocks as Crisil Ratings
said strong order execution will swell the revenue of road engineering,
procurement and construction (EPC) companies by 15 per cent this fiscal,
compared to 5 per cent in the pandemic-marred last fiscal. Insurance industry
stocks will be in limelight with a private report that Life insurers' new
business premium (NBP) reported stellar performance in November after a poor
showing in October, on the back of strong growth in group single premiums for
both private insurers and Life Insurance Corporation (LIC) of India. Shriram
Properties' IPO will open for subscription today. The company plans to raise up
to Rs 600 crore by way of public issue of equity shares in the price band of Rs
113 to Rs 118.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
17,176.70
|
17,025.75
|
17,289.65
|
BSE Sensex
|
57,633.65
|
57,115.41
|
58,028.77
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ICICI
Bank
|
305.13
|
734.15
|
717.11
|
746.06
|
Tata
Motors
|
212.80
|
482.30
|
473.90
|
487.80
|
Hindalco
Industries
|
183.03
|
443.05
|
430.70
|
449.90
|
Axis
Bank
|
151.23
|
686.90
|
674.09
|
695.64
|
State
Bank of India
|
136.44
|
476.85
|
470.80
|
481.30
|
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