Indian equity
benchmarks ended higher for the third day in a row in a choppy session on
Tuesday led by gains in Power, Utilities and IT stocks. Key gauges were
volatile in early morning trade after opening on a slightly positive note, as
traders were concerned with a private report stating that sluggish growth
momentum in the December quarter and emerging risk from the third Covid-19 wave
may shave 80 basis points (bps) off India's real gross domestic product (GDP)
growth to 9 per cent for FY22. Some cautiousness came in as data from the
Reserve Bank of India (RBI) showed outward foreign direct investment by Indian
companies fell by over 8 per cent to $2.05 billion in December 2021 in the
current fiscal. Adding to the pessimism, a domestic rating agency said
lockdowns to contain the spread of the third COVID wave hurt loan collections
and new lending by non-banks, and will in turn impact securitisation volumes. Rising
coronavirus cases also dampened sentiments in the markets. However, key indices
inched up as they recovered from some early morning volatility, taking support
from the Quarterly Employment Survey (QES) report released by Union Labour
Minister Bhupender Yadav stating that total employment in nine select sectors
stood at 3.10 crore in the July-September 2021 quarter (Q2FY22), which is 2
lakh more than that of the April-June period. He said the rise shows
improvement in economic activities after lifting of lockdown restrictions by
states to curb the spread of deadly virus after the second wave of the COVID-19
pandemic hit the country in April 2021. Traders got support after Tata group's
Chairman N Chandrasekaran said that coronavirus pandemic has not impacted
India's long-term growth trajectory although it has delayed it and in this
decade, the country will lead the global growth rates. Finally, the BSE Sensex
rose 221.26 points or 0.37% to 60,616.89 and the CNX Nifty was up by 52.45
points or 0.29% to 18,055.75.
The US markets ended higher on
Tuesday, with tech-related shares extending a bounce from the previous session,
after Federal Reserve Chair Jerome Powell testified before a Senate Banking
Committee hearing on his nomination for another term. In prepared remarks,
Powell highlighted elevated inflation as a result of supply chain issues and
said the Fed would use all of its tools to prevent higher inflation from
becoming entrenched. Powell said We can begin to see that the post-pandemic
economy is likely to be different in some respects. The pursuit of our goals
will need to take these differences into account.' He added to that end,
monetary policy must take a broad and forward-looking view, keeping pace with
an ever-evolving economy. On the sectoral front, energy stocks moved sharply
higher on the day, benefiting from a substantial increase by the price of crude
oil. Crude for February delivery spiked $2.99 to $81.22 a barrel. Reflecting
the rally by energy stocks, the Philadelphia Oil Service Index soared by 4.3
percent and the NYSE Arca Oil Index shot up by 3.5 percent. Significant
strength also emerged among gold stocks, as reflected by the 2.1 percent jump
by the NYSE Arca Gold Bugs Index. The strength in the gold sector came amid a
notable increase by the price of the precious metal, with gold for February
delivery surging $19.70 to $1,818.50 an ounce. Housing, airline, and
semiconductor stocks also saw considerable strength on the day, while interest
rate-sensitive utilities stocks moved to the downside.
Crude oil futures ended higher
with rally of over three and half percent on Tuesday. Hopes that the spread of
the Omicron variant will not derail the global economy and adversely impact
energy demand supported oil prices. Federal Reserve Chairman Jerome Powell said
that he expects the economic impact of the new variant to be short-lived and
that upcoming quarters may be positive for the economy. Meanwhile, the recent
outages in Libya and a weak U.S. dollar also contributed to the increase in oil
prices. Benchmark crude oil futures for February delivery rose $2.99 or 3.8
percent to settle at $81.22 a barrel on the New York Mercantile Exchange. Brent
crude for March delivery gained $2.96 or 3.7 percent to settle at $83.83 a
barrel on London's Intercontinental Exchange.
Indian rupee ended substantially
stronger on fresh selling of American currency by banks and exporters. Besides,
healthy growth in the domestic equity market and dollar weakness against other
currencies overseas added to the rupee gains. Traders got support after Tata
group's Chairman N Chandrasekaran said that coronavirus pandemic has not
impacted India's long-term growth trajectory although it has delayed it and in
this decade, the country will lead the global growth rates. On the global
front, dollar slipped on Tuesday but was stuck within recent ranges as
investors waited for U.S. Federal Reserve Chair Jerome Powell to speak at a
congressional hearing later in the day. Finally, the rupee ended 73.94,
stronger by 11 paise from its previous close of 74.05 on Monday.
The FIIs as per Tuesday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 6155.00 crore against gross selling of Rs 6300.41 crore, while
in the debt segment, the gross purchase was of Rs 714.18 crore against gross
selling of Rs 1213.87 crore. Besides, in the hybrid segment, the gross buying
was of Rs 1755.14 crore against gross selling of Rs 6.40 crore.
The US markets ended higher on
Tuesday after Powell's comments likely reassured investors that the Fed was not
going to prioritize inflation reduction above everything else, including
employment. Asian markets are trading in green on Wednesday following overnight
gains on Wall Street. Indian markets ended a choppy session slightly higher on
Tuesday amid optimism over the earnings seasons. Today, benchmarks are likely
to start higher, extending gains for the fourth straight session, amid strong
cues from their global peers. Investors will be eyeing the industrial growth
and retail inflation data to be out later in the day. Sentiments will get a
boost as the World Bank retained its FY22 growth forecast for India at 8.3 per
cent but upgraded it to 8.7 per cent for FY23, from 7.5 per cent estimated
earlier, citing improving growth prospects, especially a reviving private capex
cycle. Traders will be taking encouraged as preliminary data from the commerce
ministry showed that the country's exports grew 33.16 per cent to $7.63 billion
during January 1-7 period on account of healthy performance by various sectors,
including engineering, petroleum and gems and jewellery. Some support will come
as former chief economic adviser Arvind Virmani said the Indian economy is
likely to register a growth of 9.5 per cent in this financial year. Virmani
said that government expenditure and exports have peaked, but so far private
consumption has not recovered due to the COVID-19 pandemic. also, RAI said
retail sales in December last year grew by 7 per cent over the pre-pandemic
levels of the same period in 2019 but the pace dropped towards the last week of
the month under review due to the third COVID wave. There will be some buzz in
the road sector stocks as rating agency Icra said that high Wholesale Price
Index (WPI) inflation is a blessing in disguise for toll road projects as toll
collections are set to witness 14-15 per cent growth in 2022-23. IT stocks will
be in focus ahead of their quarterly earnings to be announced after market
hours. Telecom stocks too will be in limelight with the three leading telcos
seeking 90-95 per cent reduction in base price of 5G spectrum auction. There
will be some reaction in edible oil industry stocks as the Centre said retail
prices of edible oils across the country are ruling higher than a year-ago
period in line with the global market but from October 2021 onwards, there is a
declining trend.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
18,055.75
|
17,986.35
|
18,103.20
|
BSE
Sensex
|
60,616.89
|
60,369.19
|
60,776.92
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
162.69
|
500.80
|
496.66
|
506.41
|
State Bank of India
|
161.07
|
505.75
|
500.74
|
509.29
|
Oil & Natural Gas Corporation
|
144.57
|
160.85
|
158.41
|
162.46
|
NTPC
|
119.71
|
132.20
|
130.80
|
133.80
|
Bharti Airtel
|
106.42
|
703.00
|
695.21
|
710.16
|
L&T's Heavy Engineering arm has dispatched two large Ethylene Oxide Reactors, weighing 1,200 Tons each from Hazira, Gujarat to a large petrochemical complex overseas.
Axis Bank has executed a maiden domestic trade transaction on Government of India backed blockchain platform, Secured Logistics Document Exchange.
BPCL has reportedly inaugurated a superabsorbent polymer technology demonstration plant of 200 tonne per annum at the Kochi Refinery.
TCS has been successfully leveraging Nuvepro Hands-On Labs to help its employees get practical experience on real-world environments, accurately assess their tech skills, and re-skill / upskill them for future projects.