Indian equity benchmarks extended
gains for a second straight session on Wednesday, with the Nifty ended 112
points higher while the Sensex was up by 390 points. Recovery in most of the
Asian markets and positive start in European equity exchanges added to the
momentum. After making a cautious start, key gauges gained traction as foreign
institutional investors turned net buyers of domestic shares, breaking their
longest selling streak in six months. FIIs snapped a 17-day sales run, purchasing
Rs 211 crore worth of equity shares on a net basis on January 17. Traders took
a note of Former RBI governor Raghuram Rajan's statement that it is too
premature to think that India will replace China when it comes to influencing
global economic growth. However, the situation may change going forward as
India is already the world's fifth largest economy, it is growing and has the
potential to keep expanding. Key gauges added more gains in late morning deals,
as sentiments got boost with a private report stating that the government is
likely to increase the allocation for the ongoing Production-Linked Incentive
(PLI) schemes by as much as 20-30 per cent in the next Budget to spur domestic
manufacturing and boost exports. Traders remained optimistic with IMF Deputy
Managing Director Gita Gopinath's statement that there's a lot of positive
sentiment towards India. She highlighted areas that need more reforms to
attract more manufacturing FDI. Additional support also came with the
Department for Promotion of Industry and Internal Trade (DPIIT) Secretary
Anurag Jain's statement that several other steps are underway on further
improving ease of doing business in India, including on the labour laws front.
Finally, the BSE Sensex rose 390.02 points or 0.64% to 61,045.74 and the CNX
Nifty was up by 112.05 points or 0.62% to 18,165.35.
The US markets ended deeply in
red on Wednesday, with Dow Jones settling over one and half percent, as traders
reacted to a slew of U.S. economic data, including a Commerce Department report
showing a steep drop in U.S. retail sales in the month of December. The
Commerce Department said retail sales tumbled by 1.1 percent in December after
slumping by a revised 1.0 percent in November. Street had expected retail sales
to decrease by 0.8 percent compared to the 0.6 percent drop originally reported
for the previous month. A separate report released by the Federal Reserve
showing industrial production in the U.S. decreased by much more than expected
in the month of December. The Fed said industrial production slid by 0.7
percent in December after falling by a revised 0.6 percent in November. Street
had expected industrial production to edge down by 0.1 percent compared to the
0.2 percent dip originally reported for the previous month. However, the
initial strength on markets came after a report from the Labor Department
showed U.S. producer prices fell by more than expected in the month of
December. The Labor Department said its producer price index for final demand
declined by 0.5 percent in December after inching up by a revised 0.2 percent
in November. Street had expected producer prices to edge down by 0.1 percent
compared to the 0.3 percent increase originally reported for the previous
month. The report also showed the annual rate of producer price growth slowed
to 6.2 percent in December from 7.3 percent in November. The year-over-year
growth was expected to slow to 6.8 percent. On the sectoral front, Oil service
stocks moved sharply lower over the course of the session, dragging the
Philadelphia Oil Service Index down by 3.2 percent. The index ended the
previous session at its best closing level in over three years. The pullback by
oil service stocks came amid a decrease by the price of crude oil, with crude
for February delivery falling $0.70 to $79.48 a barrel.
Crude oil futures settled in red
on Wednesday, surrendering early gains, on concerns about a possible U.S.
recession. Meanwhile, Concerns about interest rates weighed as well on oil
prices after St. Louis Fed President James Bullard commented that the central
bank needs to quickly hiked interest rates above 5%. However, Oil prices rose
earlier in the day after the Organization of the Petroleum Exporting Countries
(OPEC) forecast that Chinese demand for oil is on track for a bounce. OPEC in
its monthly report said that Chinese oil demand would rebound this year due to
the recent relaxation of the country's COVID-19 containment measures. Benchmark
crude oil futures for February delivery dropped $0.70 or 0.9 percent at $79.48
a barrel on the New York Mercantile Exchange. Brent crude for March delivery
fell $0.94 or 1.1 percent at $84.98 a barrel on London's Intercontinental
Exchange.
Indian rupee strengthened against
the dollar on Wednesday tracking firm trend in domestic equities. Sentiments
were positive as foreign institutional investors turned net buyers of domestic
shares, breaking their longest selling streak in six months. FIIs snapped a
17-day sales run, purchasing Rs 211 crore worth of equity shares on a net basis
on January 17. Besides, a private report stated that the government is likely
to increase the allocation for the ongoing Production-Linked Incentive (PLI)
schemes by as much as 20-30 per cent in the next Budget to spur domestic
manufacturing and boost exports. On the global front, Sterling edged up against
the dollar on Wednesday, as data showed British consumer price inflation fell
to a three-month low of 10.5% in December but remains near 40-year highs. Finally,
the rupee ended at 81.25 (Provisional), stronger by 44 paise from its previous
close of 81.69 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 8667.68 crore against gross selling of Rs 7308.98 crore, while
in the debt segment, the gross purchase was of Rs 318.82 crore against gross
selling of Rs 176.93 crore. Besides, in the hybrid segment, the gross buying
was of Rs 1.06 crore against gross selling of Rs 4.49 crore.
The US markets ended lower on
Wednesday as retail sales and producer prices declined more than expected in
December and factory production fell more than expected. Asian markets are trading
mostly in red on Thursday after tracking losses on Wall Street overnight.
Indian markets extended previous session's gains and ended higher for a second
straight session on Wednesday, shrugging off mixed moves across global markets.
Today, benchmark indices are likely to make negative start tracing weakness in
the global markets. Traders will be concerned as IMF's Gita Gopinath said the
global economy is facing a unique situation due to unprecedented level of high
inflation and that is causing tension between monetary and fiscal policies.
Foreign fund outflows likely to dent sentiments in domestic markets. Foreign
institutional investors (FII) have net-sold shares worth Rs 319.23 crore on
January 18, as per provisional data available on the NSE. Further, weekly
expiry of F&O may bring some volatility in the today's session. However,
some respite may come later in the day with a private report that India is
likely to become a $26-trillion economy in 100th year of its Independence in
2047 with per capita GDP growing six times from current level to over $15,000
during the period. There will be some buzz in coal industry stocks as the
government said that it has set a coal production target of more than one
billion tonnes (BT) for the next financial year. Of the said target,
state-owned Coal India has been given the task to produce 780 MT of coal. Auto
industry stocks will be in focus as a report by rating agency ICRA said the
domestic automotive industry is expected to grow at high single-digit levels in
2023-24. According to the report, the demand for the passenger vehicles segment
is expected to grow at 6-9 per cent, commercial vehicles by 7-10 per cent,
two-wheelers by 6-9 per cent and tractors by 4-6 per cent in FY24. There will
be some reaction in paint industry stocks with a private report that the paints
sector has been an underperformer with most listed majors shedding 17-25 per
cent since their highs in August. There will be lots of earnings reaction based
on the performance of the companies.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
18,165.35
|
18,070.61
|
18,221.91
|
BSE
Sensex
|
61,045.74
|
60,706.53
|
61,247.59
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
647.49
|
122.20
|
120.46
|
123.46
|
Tata Motors
|
133.10
|
408.80
|
405.51
|
414.01
|
ITC
|
125.55
|
335.10
|
332.81
|
336.96
|
Oil & Natural Gas Corporation
|
121.39
|
149.20
|
148.35
|
149.90
|
Hindalco Industries
|
120.45
|
502.20
|
492.46
|
507.96
|
Cipla has launched Cippoint, a point-of-care testing device.
ITC has signed a Binding Term Sheet to acquire 100% of the share capital (on a fully diluted basis) of Sproutlife Foods.
Bharti Airtel has launched its cutting edge 5G services in NCR (national capital region) cities of Noida, Ghaziabad and Faridabad.
Adani Enterprises, Ashok Leyland and Ballard Power Systems have signed an agreement to launch a pilot project to develop a hydrogen fuel cell electric truck for mining logistics and transportation.