Indian equity benchmarks edged
lower in a volatile session on Tuesday despite stable global cues. Weakness in
heavyweights from the sectors like Energy, PSU, Oil & Gas and Banking
dragged the benchmarks lower. Key indices started in the negative territory, as
traders got anxious with Finance Secretary T V Somanathan's statement that the
entire revenue loss on account of reduction in excise duty on petrol and diesel
by Rs 10 and Rs 5 a litre respectively will be borne by the Centre. Some
concern also came as All India Financial Institutions (AIFI) said that with the
ripple down effect of declining automobile sales, the forging industry is
facing the heat with a sharp decline in demand which has resulted in substantial
production cuts. However, key indices
recouped most of their losses in afternoon session, taking support from data
showing that merchandise exports grew for the eleventh consecutive month to
$35.65 billion, up 43 per cent on-year in October, as external demand continued
to remain robust. The preliminary data released by the commerce and industry
ministry showed growth being driven by higher demand for items, primarily
engineering goods, petroleum products, gems and jewellery, as well as organic
and inorganic chemicals, among other items.
Some support also came as the Reserve Bank of India (RBI) in its article
on the state of the economy has stated that the Indian economy is on the path
of a durable recovery on the back of conducive monetary and credit conditions,
the global headwinds notwithstanding. Finally, the BSE Sensex fell 396.34
points or 0.65% to 60,322.37 and the CNX Nifty was down by 110.25 points or
0.61% to 17,999.20.
The US markets ended higher on
Tuesday on upbeat US economic data, including a Commerce Department report
showing retail sales shot up by more than expected in the month of October. The
report said retail sales spiked by 1.7 percent in October after climbing by an
upwardly revised 0.8 percent in September. Street had expected retail sales to
jump by 1.4 percent compared to the 0.7 percent increase originally reported
for the previous month. Excluding sales by motor vehicles and parts dealers,
retail sales still surged up by 1.7 percent in October after rising by 0.7
percent in September. Ex-auto sales were expected to advance by 1.0 percent.
Further, support also came in as the Federal Reserve also released a report
showing industrial production rebounded by much more than expected in the month
of October. The report showed industrial production surged up by 1.6 percent in
October after tumbling by 1.3 percent in September. Street had expected
industrial production to increase by 0.7 percent. The Fed said about half of
the rebound in industrial production in October reflected a recovery from the
effects of Hurricane Ida. On the sectoral front, Semiconductor stocks moved
sharply higher over the course of the session, driving the Philadelphia
Semiconductor Index up by 1.7 percent to a new record closing high.
Considerable strength was also visible among housing stocks, as reflected by
the 1.4 percent gain posted by the Philadelphia Housing Sector Index.
Crude oil futures ended
marginally lower on Tuesday, weighed down by a forecast by the International
Energy Agency (IEA) that global crude output will rise and help ease tight
supplies. Further, oil prices were also weighed down by concerns about the
outlook for energy demand following a surge in coronavirus cases and fresh restrictions
of movements in several countries in Europe. The US Centers for Disease Control
and Prevention moved four European destinations to its highest-risk category
for travel - a reflection of the growing concern over rising cases in Europe.
Benchmark crude oil futures for December delivery fell 12 cents or 0.2 percent
to settle at $80.76 a barrel on the New York Mercantile Exchange. However,
Brent crude for January delivery gained 38 cents or 0.5 percent to settle at
$82.43 a barrel on London's Intercontinental Exchange.
Indian rupee ended higher against
dollar on Tuesday as banks and exporters continued to sell the US currency amid
persistent capital inflows. Sentiments were upbeat as the merchandise exports
grew for the eleventh consecutive month to $35.65 billion, up 43 per cent
on-year in October, as external demand continued to remain robust. In another
positive development, RBI in its article on the state of the economy has stated
that the Indian economy is on the path of a durable recovery on the back of
conducive monetary and credit conditions, the global headwinds notwithstanding.
Meanwhile, RBI remained net buyer of the US currency in September 2021, after
it purchased USD 791 million on the net basis from the spot market. On the
global front, pound rose on Tuesday as data showed British employers hired more
people in October after the government's job-protecting furlough scheme ended,
easing some of the Bank of England concerns about the risks of raising interest
rates. Finally, the rupee ended 74.37 (provisional), stronger by 9 paise from
its previous close of 74.46 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 8826.67 crore against gross selling of Rs 7904.49 crore, while
in the debt segment, the gross purchase was of Rs 1288.15 crore with gross
sales of Rs 632.51 crore. Besides, in the hybrid segment, the gross buying was
of Rs 29.99 crore against gross selling of Rs 244.57 crore.
The US markets ended higher on
Tuesday after positive retail data. Commerce Department report showed retail
sales shot up by more than expected in the month of October. The report said
retail sales spiked by 1.7 percent in October after climbing by an upwardly
revised 0.8 percent in September. Asian markets are trading lower in early
deals on Wednesday despite positive cues from US markets. Indian equity markets
closed in the red on Tuesday amid volatility, dragged by banking, metal, pharma
and oil & gas stocks. Today, markets are likely to make negative start
tracking weakness across other Asian markets despite overnight gains on Wall
Street. There will be cautiousness as Fitch Ratings kept India's sovereign
rating unchanged at 'BBB-' with a negative outlook, and said that the rating
balances a still-strong medium-term growth outlook and external resilience from
solid foreign-reserve buffers against high public debt, a weak financial sector
and some lagging structural issues. It said the country's rapid economic
recovery from the Covid-19 pandemic and easing financial sector pressures are
narrowing risks to the medium-term growth outlook. Though, the negative outlook
on the rating reflects lingering uncertainty around the medium-term debt
trajectory, particularly given India's limited fiscal headroom relative to
rating peers. However, some respite may come later in the day as a private
report stated that private equity (PE) and venture capital (VC) investments
touched an all-time high of USD 12.9 billion in October, on the back of
high-value deals. The investments were 71 per cent higher as compared with
October 2020's USD 7.5 billion and 2.5 times the USD 5.2 billion value recorded
in September this year. Some support may come with Commerce and industry
minister Piyush Goyal stating that India attracted record foreign direct
investment over the last several years and the trend is expected to continue,
considering the major structural reforms being undertaken by the government.
Meanwhile, Member of Commission of India Sangeeta Verma has said the Indian
competition law is broad enough to deal with new-age competition concerns in
digital markets. She added that the Indian law has extra-territorial
jurisdiction and can deal with market practices anywhere in the world if it has
anti-competitive effects in India. She noted there exists a bargaining power
imbalance between digital platforms and business suppliers in digital markets.
There will some action in Gem and Jewellery stocks as Gem and Jewellery Export
Promotion Council (GJEPC) has said the gem and jewellery exports witnessed a
growth of 45.2 per cent during October at Rs 31,241.09 crore (USD 4,170.59
million) compared to the same month last year due to strong demand from key
markets, led by the US. There may be some buzz in banking sector stocks as
Reserve Bank Governor Shaktikanta Das asked banks to be investment-ready when
the private Capex cycle picks up, as the pandemic-battered economy is on a
strong recovery path that will demand huge investments to sustain in the long
run. Crediting the faster-than-expected recovery primarily to the improved
vaccination pace and the resultant steady fall in the infection caseload, Das
said this has led not only to lower extreme health outcomes like mortality/
hospitalisation but also boosted consumer confidence, which was visible in the
festival demand.
Support and Resistance: NSE (Nifty) and BSE
(Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
17,999.20
|
17,927.79
|
18,101.64
|
BSE Sensex
|
60,322.37
|
60,080.35
|
60,683.58
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Motors
|
558.97
|
517.95
|
507.15
|
527.80
|
State
Bank of India
|
195.53
|
494.25
|
489.36
|
503.26
|
Power
Grid Corporation of India
|
174.04
|
187.80
|
185.75
|
190.60
|
ITC
|
146.75
|
235.25
|
233.61
|
238.26
|
Oil
& Natural Gas Corporation
|
129.56
|
157.60
|
156.36
|
159.26
|
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