Indian equity benchmarks snapped
five-day gaining momentum and ended lower on Tuesday amid profit booking in
Realty, Utilities and IT stocks. Markets made a cautious start as traders
remained cautious with the commerce department stating that growing attacks on
commercial shipping vessels travelling through the lower Red Sea have resulted
in a combined impact of higher freight costs, insurance premiums and longer
transit times. He cautioned that it can make imported goods significantly more
expensive. However, markets erased losses and managed to trade in green in late
morning deals as some support came with data showing that India's trade deficit
in December narrowed to a three-month low of $19.8 billion amid an import
slowdown due to falling commodity prices. India's merchandise exports
registered marginal growth of 0.97 per cent to $38.45 billion in December 2023
as compared to $38.08 billion in December 2022. Imports declined by 4.85 per
cent to $58.25 billion in December 2023 as compared to $61.22 billion in
December 2022 due to a dip in crude oil shipments. But, buying proved
short-lived as markets once again fell into red in afternoon deals, amid
reports that the cost of Indian exports has more than doubled due to the Yemeni
Houthi militia's attacks on ships in the Red Sea. Traders overlooked Reserve
Bank of India (RBI) Monetary Policy Committee (MPC) member Ashima Goyal's
statement that India's macro-fundamentals strengthened even though it faced
severe external shocks (Russia-Ukraine war, Israel-Hamas war, oil prices,
Houthi attacks) since 2020. She said the rupee has been relatively stable due
to these factors. Meanwhile, the Reserve Bank of India's draft norms for
self-regulatory organisations for the fintech sector (SRO-FT) have proposed
that such entities should have a robust IT infrastructure and the ability to
deploy technological solutions within a reasonable timeframe. Finally, the BSE
Sensex fell 199.17 points or 0.27% to 73,128.77 and the CNX Nifty was down by
65.15 points or 0.29% to 22,032.30.
The US markets ended lower on
Tuesday with Dow Jones Industrial Average selling over 230 points, as higher
Treasury yields and concerns that the Federal Reserve may not cut interest
rates anytime soon hurt sentiment. Traders were cautious as some hawkish
comments from some central bank officials, including from the Federal Reserve.
Investors also reacted to quarterly earnings updates from some major U.S.
companies such as Goldman Sachs and Morgan Stanley. Morgan Stanley ended lower
by more than 4 percent. Morgan Stanley's fourth-quarter bottom line totaled
$1.38 billion or $0.85 per share, compared with $2.11 billion or $1.26 per share
a year ago. Meanwhile, PayPal, Moderna, Hewlett Packard, Nike, Warner Bros
Discovery, Bakher Hughes, Delta Air Lines, Chevron, HP, Invesco, Textron,
Netflix, United Airlines Holdings and Bank of America lost 2 to 4 percent.
However, Goldman Sachs gained about 0.7 percent. The lender reported fourth
quarter net earnings of $1.87 billion of $5.48 per share, up from $1.19 billion
or $3.32 per share in the year-ago quarter. Advanced Micro Devices climbed more
than 8 percent. The stock surged on upbeat street commentary on semiconductor
demand. On the economic data front, a report from the Federal Reserve Bank of
New York said the NY Empire State Manufacturing Index plunged to -43.7 in
January, the lowest reading since May 2020.
Crude oil futures ended lower on
Tuesday on stronger U.S. dollar amid fading hopes about early interest rate
cuts following some hawkish comments from central bank officials. There are
expectations that weather in the U.S. will be colder than normal also weighed
on oil prices. Meteorologists have reportedly projected weather in the U.S.
would switch from colder than normal this week to mostly warmer than normal
during the later part of the month. Benchmark crude oil futures for February
delivery fell by 28 cents or 0.4 percent to settle at $72.40 a barrel on the
New York Mercantile Exchange. However, Brent crude for March delivery gained 14
cents or 0.2 percent to settle at $ 78.29 a barrel on London's Intercontinental
Exchange.
Indian rupee ended lower against
the US dollar on Tuesday, tracking a negative trend in domestic equities and
the strength of the American currency in the overseas market. Traders were
cautious with the commerce department stating that growing attacks on
commercial shipping vessels travelling through the lower Red Sea have resulted
in a combined impact of higher freight costs, insurance premiums and longer
transit times. He cautioned that it can make imported goods significantly more
expensive. Traders took a note of the commerce ministry's data showing that
India's merchandise exports registered marginal growth of 0.97 per cent to
$38.45 billion in December 2023 as compared to $38.08 billion in December 2022.
Imports declined by 4.85 per cent to $58.25 billion in December 2023 as
compared to $61.22 billion in December 2022 due to a dip in crude oil
shipments. On the global front, the dollar rose on Tuesday as investors
tempered their expectations for a March rate cut from the Federal Reserve,
while the pound and yen fell as inflationary pressures subsided. Finally, the
rupee ended at 83.12 (Provisional), weaker by 26 paise from its previous close
of 82.86 on Monday.
The FIIs as per Tuesday's data
were net buyers in equity and debt segments both. In equity segment, the gross
buying was of Rs 13055.22 crore against gross selling of Rs 11039.88 crore,
while in the debt segment, the gross purchase was of Rs 1530.36 crore with
gross sales of Rs 886.83 crore. Besides, in the hybrid segment, the gross
buying was of Rs 13.43 crore against gross selling of Rs 10.22 crore.
The US markets ended lower on
Tuesday as higher Treasury yields and concerns that the Federal Reserve may not
cut interest rates anytime soon hurt sentiment. Asian markets are trading
mostly in red on Wednesday as investors awaited China's Q4 GDP, retail sales
and industrial output data. Indian markets snapped a five-day winning streak
and ended in red on Tuesday, with the Nifty below 22,050 mark, amid profit
booking in Information Technology, pharma, realty and power stocks. Today,
markets are likely to get gap-down opening tracking sell-off in the global
peers as the 10-year treasury yield in the US ticked over 4 per cent. Volatile
crude oil prices likely to weigh on sentiment, amid persisting concerns about
likely disruptions in supply due to the attacks by the Houthi militants on
vessels in the Red Sea. Traders may take note of report that ratings agency
Fitch has affirmed BBB- rating for India, with the outlook stated as stable. It
said India is poised to remain one of fastest-growing countries globally in
next few years. It also added that beyond FY24 there is less certainty on
fiscal path and trade-offs between economic growth and consolidation may become
more acute. However, some respite may come later in the day amid foreign fund inflows.
Provisional data from the NSE showed that foreign institutional investors
(FIIs) bought shares worth Rs 656.57 crore on January 16. Some support may come
as the Reserve Bank of India (RBI) governor, Shaktikanta Das, said that retail
inflation is slowly moderating and is steadily moving towards the target of 4
per cent. Das stated that core inflation has started to move down, which gives
confidence that monetary policy is working, while commenting that maintaining
financial stability despite multiple headwinds has been the biggest achievement
in the last five years. Some optimism may come as a Crisil report noted that
corporates' revenues are likely to have grown 8-10 per cent in the 2023
December quarter on an annual basis. As per Crisil Ratings, the operating
profits have likely expanded 100-150 basis points on-year in the three months
ended December 2023, giving the corporates an overall operating margin of 19-20
per cent in the first nine months of 2023-24 fiscal. Insurance industry stocks
will be in focus with a private report that the domestic insurance sector is on
course to log in over 7 per cent annual growth over the next decade and the
premium income is likely to double to around $450 billion by financial year
2033-34. There will be some reaction in stocks related to semiconductor as
crediting the Micron investment for sparking manufacturing interest in India,
Minister of State for IT Rajeev Chandrasekhar said that at least nine semiconductor
manufacturing proposals were undergoing the analysis stage in the Ministry.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
22,032.30
|
21,960.01
|
22,114.36
|
BSE
Sensex
|
73,128.77
|
72,916.85
|
73,384.15
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Steel
|
563.61
|
137.25
|
134.66
|
139.16
|
ONGC
|
345.05
|
234.80
|
230.95
|
238.80
|
BPCL
|
211.85
|
472.50
|
462.06
|
481.36
|
State
Bank of India
|
150.26
|
637.55
|
632.36
|
643.81
|
Wipro
|
129.56
|
485.75
|
479.16
|
493.66
|
- Mahindra & Mahindra has
launched the 2024 XUV700.
- ONGC has made two significant
back-to-back natural gas discoveries in a Mahanadi basin deepwater block in the
Bay of Bengal.
- Maruti Suzuki has increased
prices across models. An estimated weighted average of increase across models
stands at around 0.45%.
- L&T's construction arm --
L&T construction has secured a Mega Contract for its Railways Strategic
Business Group from an authorised Japanese agency.