Indian equity benchmarks gave up
almost all gains and ended flat with a positive bias on Tuesday amid
profit-booking by investors towards the end of session. Investors awaited key
macroeconomic numbers and the December quarter earnings of IT majors Infosys
and TCS. Equity markets started the trade on an optimistic note amid foreign
fund inflows. Provisional data from the NSE showed that foreign institutional
investors (FIIs) bought shares worth Rs 16.03 crore on January 8. Sentiments
remained up-beat with report stating that the next round of talks for the
proposed free trade agreement (FTA) between India and Oman will start from
January 16 and the negotiations for the pact are progressing well. The talks on
the text of most of the chapters have been concluded by both sides for the
pact. However, profit booking in the fag-end session erased majority of the
gains. Traders got anxious with a private report that India may see around $30
billion shaved off its total exports in the current fiscal year, as threats to
cargo vessels in the Red Sea lead to a surge in container shipping rates and
prompt exporters to hold back on shipments. Traders overlooked a private report
stating that gaining from high credit off-take and lower credit costs, banks
are likely to post 16.7 per cent year-on-year (Y-o-Y) growth in net profit
during the third quarter of the financial year ended December 2023 (Q3 FY24).
However, sequentially, net profit may shrink by 2.4 per cent over the second
quarter ended September 2023 (Q2). Meanwhile, the Reserve Bank has raised the
minimum capital requirement for small finance banks to Rs 200 crore and
permitted Payments Bank to upgrade as SFBs. Finally, the BSE Sensex rose 30.99
points or 0.04% to 71,386.21 and the CNX Nifty was up by 31.85 points or 0.15%
to 21,544.85.
The US markets ended mostly in
red on Tuesday as some traders looked to cash in on Monday's strong gains amid
lingering uncertainty about the outlook for interest rates. While the Federal
Reserve is widely expected to leave interest rates unchanged later this month,
traders have recently become increasingly skeptical about whether the central
bank will cut rates in March. Meanwhile, traders seemed reluctant to make move
significant bets ahead of the release of key inflation data later this week.
The Labor Department is due to release its reports on consumer and producer
price inflation, which could have a significant impact on the outlook for
rates. On the sectoral front, despite the recovery attempt by the broader
markets, tobacco stocks continued to see substantial weakness on the day, with
the NYSE Arca Tobacco Index plunging by 3.7 percent. Significant weakness also
remained visible among oil service stocks, as reflected by the 2.4 percent
slump by the Philadelphia Oil Service Index. The weakness in the sector came
despite a rebound by the price of crude oil. On the economic data front, the
Commerce Department released a report showing the U.S. trade deficit
unexpectedly shrank in the month of November. The report said the trade deficit
narrowed to $63.2 billion in November from a revised $64.5 billion in October.
Street had expected the trade deficit to widen to $65.0 billion from the $64.3
billion originally reported for the previous month. The unexpectedly smaller
trade deficit came as the value of imports tumbled by 1.9 percent to $316.9
billion, while the value of export slumped by 1.9 percent to $253.7 billion.
Crude oil futures end sharply
higher on Tuesday as rising geopolitical risks raised concerns about possible
supply and trade disruptions. The closure of Libya's largest oilfield
contributed to the jump in oil prices. The closure of the Sharara oilfield in
Libya, which is one of the biggest in the country, has resulted in a shortfall
of 300,000 barrels per day. Due to security threats from Houthi militants amid
the tensions in the Middle East, several major shipping companies are staying
away from the Red Sea route. Benchmark crude oil futures for February delivery
rose by $1.47 or 2.1 percent to settle at $72.24 a barrel on the New York
Mercantile Exchange. Brent crude for March delivery surged by $1.47 or 1.9
percent to settle at $77.59 a barrel on London's Intercontinental Exchange.
Indian rupee erased initial gains
and ended almost flat against the dollar on Tuesday as investors looked ahead
to the release of inflation data this week from India, the U.S., China and
Japan for directional cues. Some concern also came with a private report
stating that India may see around $30 billion shaved off its total exports in
the current fiscal year, as threats to cargo vessels in the Red Sea lead to a
surge in container shipping rates and prompt exporters to hold back on
shipments. However, traders took some support with provisional data from the
NSE showing that foreign institutional investors (FIIs) bought shares worth Rs
16.03 crore on January 8. On the global front, a decline in U.S. consumer
inflation expectations kept the dollar rally in check on Tuesday as traders reaffirmed
their bets for a slew of Federal Reserve rate cuts this year. Finally, the
rupee ended at 83.13 (Provisional), stronger by 1 paisa from its previous close
of 83.14 on Monday.
The FIIs as per Tuesday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 10336.40 crore against gross selling of Rs 10051.40 crore,
while in the debt segment, the gross purchase was of Rs 755.56 crore with gross
sales of Rs 658.34 crore. Besides, in the hybrid segment, the gross buying was
of Rs 6.17 crore against gross selling of Rs 18.13 crore.
The US markets ended mostly in
red on Tuesday as hopes of a rate cut by Fed in March were seen decreasing;
with inflation data later this week to guide sentiment. Asian markets are
trading mixed on Wednesday ahead of Australia's November inflation data. Indian
markets started on a strong footing amid a global rally but ended sharply off
highs on Tuesday amid selling in bank stocks. Today, markets are likely to get
negative start tracking weakness across global markets. Foreign fund outflows
likely to dent sentiments. Provisional data from the NSE showed that foreign
institutional investors (FIIs) sold shares worth Rs 990.90 crore on January 9.
Traders will be concerned with a private report that India's retail inflation
likely edged up in December on higher food prices but stayed within the Reserve
Bank of India's target range for a fourth consecutive month. Food prices, which
account for about half of the inflation basket, rose in November and remained
elevated last month, largely led by vegetable prices and household staples.
Some cautiousness will also come with report that the weighted average rates of
state debt continued to remain at an over two-year high of 7.72 per cent at the
second weekly auction of the quarter on Tuesday, making it the highest so far this
fiscal. However, some respite may come later in the day as a foreign brokerage
report stated that the Indian economy is likely to grow at 6.2 per cent in the
next fiscal, mainly due to the favourable combination of neutral policy
settings, positive credit momentum, and manageable macros amid a 15-year high
household debt levels. It noted despite the rising external headwinds, India is
likely to grow 6.2 per cent next fiscal against a consensus of 6.3 per cent to
$3.9 trillion from $3.57 trillion in FY24 on a likely 7 per cent growth, as
consumption growth is likely to stabilise at 4.7 per cent from 4.5 per cent in
FY24. Also, the World Bank has retained India's economic growth forecast at
6.3% for the current financial year, and 6.4% for the next, citing slow
post-pandemic recovery. Meanwhile, the next round of talks for the proposed
Free Trade Agreement (FTA) between India and the UK will start here from
January 10 to resolve remaining issues and conclude the negotiations. The 13th
round of negotiations for the proposed pact was held between September 18 and
December 15. There will be some reaction in insurance industry stocks with
report that the life insurance industry's new business premium increased by
43.76 per cent year-on-year (YoY) in December 2023, helped by state-owned Life
Insurance Corporation (LIC) and private insurers. Private insurers' premiums
increased 4.15 per cent YoY to Rs 15601.85 crore from Rs 14979.79 crore.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
21,544.85
|
21,466.99
|
21,673.59
|
BSE
Sensex
|
71,386.21
|
71,117.17
|
71,845.37
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Steel
|
307.37
|
133.85
|
132.64
|
134.94
|
Adani
Port
|
147.01
|
1200.95
|
1176.34
|
1227.74
|
ICICI
Bank
|
146.60
|
978.00
|
970.60
|
990.20
|
State
Bank of India
|
134.00
|
625.95
|
622.19
|
632.04
|
Tata
Motors
|
128.73
|
801.00
|
793.04
|
809.09
|
- Tata Motors' Group global
wholesales in Q3FY24, including Jaguar Land Rover were at 338,177 nos., higher
by 9%, as compared to Q3 FY23.
- JSW Steel has reported the crude
steel production for Q3FY24 at 6.87 million tonnes, that grew by 12% as against
6.14 million tonnes in Q3FY23 on consolidated basis.
- Eicher Motors' motorcycle arm --
Royal Enfield has signed a non-binding MoU with the Government of Tamil Nadu at
Global Investors Meet 2024, at Chennai.
- Bharti Airtel's B2B arm -- Airtel
Business is all set to power over 2 crore smart meters for Adani Energy
Solutions.