Indian equity benchmarks
recovered sharply from morning lows to end the Tuesday's session with marginal
losses amid buying in index majors Tata Consultancy Services and Reliance
Industries. Markets made a gap down opening and languished deep in the red for
the most part of the day, tracking heavy losses in Asian peers. Traders got
anxious with provisional data available on the NSE showing that foreign
institutional investors (FIIs) have net-sold shares worth Rs 538.10 crore on
December 19, 2022. Some concern also came amid a private report stating that
liquidity in the banking system has slipped into a deficit for the first time
in three weeks, prompting banks to borrow the largest quantum of funds from the
Reserve Bank of India (RBI) in around a month and a half. However, key gauges
managed to recoup most of early losses in late afternoon deals, as traders
found some solace with Union Finance Minister Nirmala Sitharaman's statement
that scheduled commercial banks have written off loans amounting to Rs
10,09,511 crore in the last five financial years and the process of recovery of
dues from the borrowers continues. Some support also came with Minister of
state for Micro, Small and Medium Enterprises (MSMEs) Bhanu Pratap Singh
Verma's statement that 1.31 crore people were employed in the MSMEs
incorporated in the financial year 2021-22 (FY22), up by 16% as against 1.13
crore employees in the MSMEs incorporated in FY21. Finally, the BSE Sensex fell
103.90 points or 0.17% to 61,702.29 and the CNX Nifty was down by 35.15 points
or 0.19% to 18,385.30.
The US markets ended marginally
higher on Tuesday as some traders looked to pick up stocks at relatively
reduced levels following recent weakness. However, buying interest remained
somewhat subdued with some traders reluctant to get back into the markets amid
lingering concerns the Federal Reserve's aggressive interest rate hikes will
tip the economy into a recession. On Friday, the Commerce Department is due to
release its report on personal income and spending, which includes a reading on
inflation said to be preferred by the Fed. With Fed Chair Jerome Powell saying
the central bank will require substantially more evidence inflation is on a
sustained downward trend before halting its rate hikes, traders are likely to
keep a close eye on the inflation reading. On the sectoral front, gold stocks
moved sharply higher on the day, resulting in a 4.6 percent spike by the NYSE
Arca Gold Bugs Index. The rally by gold stocks came amid a notable increase by
the price of the precious metal, with gold for February delivery jumping $27.70
to $1,825.40 an ounce. An increase by the price of crude oil also contributed
to considerable strength among oil service stocks, driving the Philadelphia Oil
Service Index up by 3.1. On the economic data front, the Commerce Department
released a report showing a decrease in new residential construction in the
U.S. in the month of November. The report said housing starts fell by 0.5
percent to an annual rate of 1.427 million in November after tumbling by 2.1
percent to a revised rate of 1.434 million in October. Street had expected housing
starts to decline by 0.7 percent to a rate of 1.415 million from the 1.425
million originally reported for the previous month. The Commerce Department
also said building permits plunged by 11.2 percent to an annual rate of 1.342
million in November after slumping by 3.3 percent to a revised rate of 1.512
million in October.
Crude oil futures ended higher on
Tuesday on account of softer dollar and a U.S. plan to restock petroleum
reserves. The US announced a plan to buy up to 3 million barrels of oil for the
Strategic Petroleum Reserve following this year's record release of 180 million
barrels from the stockpile. However, upside remained capped as a worsening
outlook for a major U.S. winter storm sparked fears that millions of Americans
might curb travel plans during the holiday season. Benchmark crude oil futures
for January delivery gained $0.89 or 1.18 percent at $76.9 a barrel on the New
York Mercantile Exchange. Brent crude for February added $0. 19 or 0.2 percent
to settle at $79.99 a barrel on London's Intercontinental Exchange.
Rupee ended weaker against dollar
on Tuesday on the back of negative trend in domestic equities and rising crude
prices in the global markets. Traders were worried amid a private report
stating that liquidity in the banking system has slipped into a deficit for the
first time in three weeks, prompting banks to borrow the largest quantum of
funds from the Reserve Bank of India (RBI) in around a month and a half. On the
global front, the yen surged to a four-month peak against the dollar on Tuesday
after the Bank of Japan stunned markets by deciding to review its yield curve
control policy and widen the trading band for the 10-year government bond
yield. While it kept broad policy settings unchanged - pinning short-term JGB
yields at -0.1% and the 10-year yield around zero - the BOJ decided to let
long-term yields to move 50 basis points either side of its 0% target, wider
than the 25 basis point band previously. Finally, the rupee ended at 82.75
(Provisional), weaker by 13 paise from its previous close of 82.62 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 5362.33 crore against gross selling of Rs 5499.90 crore, while
in the debt segment, the gross purchase was of Rs 132.29 crore against gross
selling of Rs 723.14 crore. Besides, in the hybrid segment, the gross buying
was of Rs 3.41 crore against gross selling of Rs 10.66 crore.
The US markets ended slightly
higher on Tuesday after four sessions of declines, but investors fretted about
weak holiday shopping and rising bond yields added pressure after the Bank of
Japan's (BoJ) surprise tweak of monetary policy. Asian markets are trading
mostly in green on Wednesday tracking overnight gains on Wall Street. Indian
markets recovered most of their intraday losses to close marginally lower on
Tuesday amid buying in index majors Reliance Industries and Tata Consultancy
Services despite lacklustre global cues. Today, the benchmark indices are
likely to start session in green amid positive global cues. Sentiments will get
a boost as the Reserve Bank of India (RBI) in its monthly bulletin for December
said waning input cost pressures, buoyant corporate sales, and a turn-up in
investments in fixed assets suggest the beginning of an upturn in India's
capital expenditure cycle, which could help improve earnings in the coming
quarters and speed up the momentum of growth in the Indian economy. Traders
will be taking encouragement as a finance ministry report said that the
government remains committed towards strong macroeconomic fundamentals and
financial stability despite global headwinds. The report added despite hurdles,
the Indian economy has performed reasonably well as compared to other major
economies and shown its resilience amidst the global slowdown and global
uncertainties. Some support will come as the Fitch Ratings affirmed India's
sovereign rating at the lowest investment grade (BBB minus) with stable outlook
holding that the country's robust medium-term growth outlook is a key
supporting factor. Also, foreign institutional investors (FIIs) net bought
shares worth Rs 455.94 crore on December 20, as per provisional data available
on the NSE. Meanwhile, investors will keep an eye on RBI MPC minutes to be
released today. Sugar stocks will be in focus as trade body AISTA said India
has exported 5.62 lakh tonne of sugar so far in the current 2022-23 marketing
year that began in October. There will be some reaction in textile industry
stocks as the Cotton Association of India (CAI) reduced the cotton crop
estimate by 4.25 lakh bales to 339.75 lakh bales for the 2022-23 season,
beginning from October 2022, as the production in Haryana, Andhra Pradesh and
Karnataka is expected to decline. Power stocks will be in limelight as Fitch
Ratings in a report said growth in the country's power demand is likely to slow
down in the second half of the financial year ending March 2023 (H2FY23), after
a robust 11.3 per cent year-on-year (YoY) growth in the first half of the year
(H1FY23).
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
18,385.30
|
18,257.00
|
18,459.25
|
BSE
Sensex
|
61,702.29
|
61,276.53
|
61,954.22
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
348.36
|
111.00
|
109.50
|
112.00
|
Tata Motors
|
123.41
|
409.95
|
405.96
|
415.96
|
Axis Bank
|
95.11
|
952.15
|
944.15
|
956.45
|
Hindalco Industries
|
75.80
|
457.75
|
448.25
|
463.25
|
Infosys
|
73.96
|
1505.90
|
1,486.90
|
1,520.45
|
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