Key benchmark
indices extended their winning run into the fourth straight trading session and
ended with gains of around a percent on Wednesday backed by solid gains in
index heavyweights Mahindra & Mahindra, Bharti Airtel and Reliance
Industries. The benchmark indices made a gap-up opening and remained higher
throughout the session, as investor sentiments magnified with 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. Some optimism came
with former chief economic adviser Arvind Virmani's statement that the Indian
economy is likely to register a growth of 9.5 per cent in this financial year.
Some support also came in 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. The benchmark indices steadily
held their strong gains in afternoon trade, as reports suggest the
fast-spreading Omicron variant is not virulent and hospitalisation cases are
very low. Also, Mumbai Mayor Kishori Pednekar stated that the numbers of
COVID-19 cases and its fast spreading variant Omicron were slowing coming down
in the city. Domestic sentiments were positive, as the government extended till
March 15 the deadline for corporates to file Income Tax returns for the fiscal
ended March 2021. The deadline to file tax audit report and transfer pricing
audit report for 2020-21 fiscal too has been extended till February 15. Traders
overlooked a domestic rating agency ICRA's report stated that lockdowns to
contain the spread of the third COVID wave hurt loan collections and new
lending by non-banks, and will in turn impact securitization volumes. Finally,
the BSE Sensex rose 533.15 points or 0.88% to 61,150.04 and the CNX Nifty was
up by 156.60 points or 0.87% to 18,212.35.
The US markets ended higher on
Wednesday after a key inflation report showed a historic gain but largely
matched expectations. While the report showed the annual rate of consumer price
growth once again reached the highest level in almost 40 years, traders seemed
relieved the acceleration was not even more significant. The report showed the
annual rate of consumer price growth accelerated to 7.0 percent in December
from 6.8 percent in November, showing the biggest yearly jump since June of
1982. Core consumer prices, which exclude food and energy prices, were up by
5.5 percent year-over-year in December compared to the 4.9 percent spike in
November. The annual growth reflected the biggest surge since February of 1991.
The continued acceleration in the annual rate of consumer price growth came as
prices increased by slightly more than expected on a monthly basis, although
the pace of growth slowed from November. On the sectoral front, steel stocks
moved sharply following data showing easing Chinese inflation, with the NYSE
Arca Steel Index spiking by 2.9 percent to its best closing level in almost
four months. Significant strength also emerged among gold stocks, as reflected
by the 1.7 percent gain posted by the NYSE Arca Gold Bugs Index. The strength
in the gold sector came as the price of gold for February delivery climbed
$8.80 to $1,827.30 an ounce amid a decrease in the value of the US dollar.
Natural gas stocks also moved notably higher amid a surge in the price of the
commodity, driving the NYSE Arca Natural Gas Index up by 1.5 percent.
Crude oil futures ended higher on
Wednesday, magnifying the spike seen in the previous session, on tight supply
and easing concerns about the potential hit to demand from the Omicron
coronavirus variant. The increase in the price of crude oil came after a report
from the Energy Information Administration showed US crude oil inventories fell
by more than expected in the week ended January 7th. The report showed crude
oil inventories tumbled by 4.6 million barrels versus estimates for a decrease
of about 1.9 million barrels. Meanwhile, the report showed gasoline inventories
jumped by 8.0 million barrels, while distillate fuel inventories increased by
2.5 million barrels. Benchmark crude oil futures for February delivery rose
$1.42 or 1.7 percent to settle at $82.64 a barrel on the New York Mercantile
Exchange. Brent crude for March delivery gained $1.24 or 1.5 percent to settle
at $84.96 a barrel on London's Intercontinental Exchange.
Indian rupee ended marginally
higher against dollar on persistent selling of the American currency by
exporters. Traders got solace as 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. However, upside remain capped as domestic rating
agency ICRA in its latest report has said that lockdowns to contain the spread
of the third COVID wave hurt loan collections and new lending by non-banks, and
will in turn impact securitization volumes. On the global front, dollar
steadied above almost two-month lows against its major peers on Wednesday,
ahead of data expected to show a fresh surge in U.S inflation that could seal
the case for an early rise in interest rates. Finally, the rupee ended 73.93,
stronger by 1 paisa from its previous close of 73.94 on Tuesday.
The FIIs as per Wednesday's data
were net buyers in both equity and debt segment. In equity segment, the gross
buying was of Rs 7964.60 crore against gross selling of Rs 7561.29 crore, while
in the debt segment, the gross purchase was of Rs 506.07 crore against gross
selling of Rs 235.97 crore. Besides, in the hybrid segment, the gross buying
was of Rs 3.12 crore against gross selling of Rs 8.59 crore.
The US markets ended higher on
Wednesday after retail inflation jumped to a 40-year high of 7 per cent in
December but within the forecasts, thus suggesting that the Federal Reserve will
not have to hike interest rates too aggressively. Asian markets are trading
mixed on Thursday as traders digested the latest US inflation data and remained
concerned about the resurging coronavirus cases in the country. Indian markets
rose for the fourth straight session on Wednesday, with strong global cues
underpinning sentiment. Today, the start of session is likely to be in green
following overnight gains on Wall Street. Traders will be taking encouragement
as the World Bank said Narendra Modi government's Production-Linked Incentive
(PLI) Scheme will likely help India's economy grow at 8.7% in the next
financial year 2022-23, beating emerging market peers including China. However,
traders may be concerned on account of subdued macro-economic data. India's
industrial production growth remained subdued for the third straight month and
expanded by 1.4 per cent in November, mainly due to the waning low base effect,
while the mining sector showed good performance. Also, rising prices of
essential kitchen items pushed the retail inflation to a six-month high of 5.59
per cent in December, close to the Reserve Bank's upper tolerance limit of 6
per cent. Also, food inflation was at 4.05 per cent in December this fiscal
compared to 1.87 per cent in the preceding month. There may be some
cautiousness as rating agency ICRA said it expects a miss in the disinvestment
target to cause the government's fiscal deficit to print at Rs 16.6 lakh crore
or 7.1 per cent of the GDP in FY2022, overshooting the budgeted target. IT
stocks will be in limelight reacting to their third quarter results. Textile
industry stocks will be in focus with a report that the country's exports of
textiles and apparel, including handicrafts, rose to $29.8 billion during
April-December this fiscal as compared to $21.2 billion in the same period last
year. There will be some reaction in edible oil industry stocks as Solvent
Extractors Association (SEA) said India's imports of palm oils declined by
29.15 per cent to 5.44 lakh tonnes in December 2021, but the rise in shipments
of RBD palmolein is threatening the survival of domestic refineries. Telecom
stocks will be under watch after the communications ministry said telecom
operators Vodafone Idea (VIL), Tata Teleservices and Tata Teleservices (Maharashtra)
(TTML) will not become public sector undertakings after their interest payable
on dues are converted into government equity.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
18,212.35
|
18,151.45
|
18,250.60
|
BSE
Sensex
|
61,150.04
|
60,927.91
|
61,295.17
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Oil & Natural Gas Corporation
|
212.20
|
164.20
|
161.84
|
166.14
|
Tata Motors
|
162.55
|
506.30
|
502.59
|
510.94
|
State Bank of India
|
144.89
|
509.95
|
507.80
|
512.80
|
ITC
|
131.58
|
222.50
|
221.51
|
223.56
|
ICICI Bank
|
130.34
|
823.30
|
815.09
|
828.49
|
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Tata Motors' wholly owned subsidiary -- Jaguar Land Rover has commenced bookings for the all-new Range Rover in the country.