Indian equity benchmarks
witnessed sharp selling towards the end of the trade and crashed like house of
card on Monday with frontline gauges ending with a massive cut of 3 percentage
points as fears of a new strain of coronavirus that has threatened the UK.
Markets made a cautious start amid rising coronavirus cases and fresh lockdowns
in some countries. Key gauges somehow managed to trade near neutral lines as
traders took some respite came in with Union Minister Anurag Singh Thakur's
statement that India has the potential to achieve double-digit growth through a
healthy dose of digital services and manufacturing base expansion which will be
driven by demand from the rural sector, youth and the aspirational middle
class. Some support also came with Finance Minister Nirmala Sitharaman's
statement that India would be the engine of global growth, along with a few
other countries, contributing to the revival of the global economy in a significant
way. However, markets witnessed sharp selloff in last leg of trade as traders
booked their recent profits on reports that UK's Health Secretary Matt Hancock
has warned that the new strain of the coronavirus is ‘out of control' and
suggested parts of England will be stuck in the new, highest tier of
restrictions until a vaccine is rolled out. Meanwhile, India has suspended all
flights originating from the UK to India until December 31. This suspension to
start with effect from 23.59 hours, 22nd December 2020. Consequently, flights
from India to the UK shall stand temporarily suspended during above said
period. Finally, the BSE Sensex tumbles 1406.73 points or 3.00% to 45,553.96,
while the CNX Nifty was down by 432.15 points or 3.14% to 13,328.40.
The US markets ended mostly lower
on Monday amid concerns about a new coronavirus strain in the UK, with the
variant said to be 70 percent more infectious than the original strain. The
news of the new strain led Canada as well as several European countries,
including Germany, France, Italy and the Netherlands, to order a suspension of
flights from Britain. More than 16 million Britons are now required to stay at
home as a full lockdown came into force in London and the southeast of England.
However, selling pressure waned over the course of the session as traders also
reacted to news that Congressional leaders have reached an agreement on a new
$900 billion relief package. The bill will purportedly provide more federal
assistance to small businesses, healthcare providers, and the unemployed and
includes direct payments worth up to $600 per adult and child. Senate Majority
Leader Mitch McConnell, R-Ken., said as the American people continue battling
the coronavirus this holiday season, they will not be on their own. He added congress
has just reached an agreement. We will pass another rescue package ASAP. More
help is on the way. House Speaker Nancy Pelosi, D-Calif., and Senate Minority
Leader Chuck Schumer, D-N.Y., expressed support for the bill but said they plan
to push for more relief once President-elect Joe Biden is sworn in.
Crude oil futures ended lower on
Monday as reports saying a surge in a new strain of the coronavirus in the UK
raised concerns about energy demand. A fast-spreading new coronavirus strain
shut down much of the United Kingdom and disrupted international freight.
According to reports, more than 16 million Britons are now required to stay at
home as a full lockdown came into force in London and the southeast of England.
The new variant of the virus is thought to be up to 70% more transmissible than
the original strain of the disease. The World Health Organization said the same
mutation of the Covid-19 virus has also been detected in the Netherlands,
Denmark and Australia. Crude oil futures for February fell $1.27 or 2.6 percent
to settle at $47.97 a barrel on the New York Mercantile Exchange. February
Brent crude dropped $1.40 or 2.7 percent to settle at $50.86 a barrel on
London's Intercontinental Exchange.
Indian rupee ended considerably
lower against the US dollar on Monday, on increased demand for the greenback
from importers and banks. Besides, losses in equity markets also put pressure
on Indian rupee. Traders were seem to be in sideline despite report that
foreign portfolio investors (FPI) pumped in Rs 54,980 crore in Indian markets
in December so far amidst availability of excess liquidity in global markets
and expectation of fresh stimulus package by various central banks, among
others. As per the depositories' data, FPIs invested a net Rs 48,858 crore into
equities and Rs 6,122 crore into debt segment between December 1 and 18. On the
global front; pound and the euro fell on Monday as investors sought refuge in
the dollar, after a fast-spreading new coronavirus strain shut down much of the
United Kingdom and disrupted international freight amid Brexit talks
uncertainties. Finally, the rupee ended at 73.79, 23 paise weaker from its
previous close of 73.56 on Friday.
The FIIs as per Monday's data
were net buyer in equity segment and net seller in debt segment. In equity
segment, the gross buying was of Rs 14320.80 crore against gross selling of Rs
10480.16 crore, while in the debt segment, the gross purchase was of Rs 564.49
crore with gross sales of Rs 897.17 crore. Besides, in the hybrid segment, the
gross buying was of Rs 190.75 crore against gross selling of Rs 187.64 crore.
The US markets ended mostly lower
on Monday as investors grappled with the outbreak of an ominous new strain of
COVID-19 along with the likely passage of a long-awaited stimulus package.
Asian markets are trading mostly in red on Tuesday as new coronavirus strain in
UK weighed on investor sentiment. Indian markets ended lower on Monday with cut
of around 3% each as selloff intensified across the sectors. Today, the markets
are likely to get slightly negative start amid weakness in global markets.
Rising corona virus cases may dampen sentiments in markets. With 19,174 fresh
Covid-19 cases, India's caseload now stands at 10,075,422. The country's death
toll has mounted to 146,145. With 1,899,352 cases, Maharashtra has the highest
number of coronavirus cases, followed by Karnataka 910,241, Andhra Pradesh
878,937, Tamil Nadu 807,962, and Kerala 709,000. Market participants will be
cautious as Maharashtra government has imposed a curfew from 11 pm to 6 am in
all municipal corporations from December 22 till January 5, 2021. The decision
has been taken in view of the emergence of new strains of coronavirus in the
UK. It has also been decided to put in institutional quarantine for 14 days those
who arrive at the state's airports from European and West Asian countries.
Passengers coming to Maharashtra from other countries will be home quarantined.
However, some respite may come later in the day as rating agency Crisil's
report that corporate profits rose 15 per cent to touch an all-time high in the
September quarter as margins widened on softer input costs and better
utilistaion levels. It said from an absolute perspective, the earnings before
interest, tax, depreciation and amortisation (Ebitda) touched an all-time high
Rs 1.60 lakh crore in the September quarter, as against Rs 1.02 lakh crore in
the preceding June quarter. Some support may also come with economic think-tank
NCAER's report that having witnessed a contraction in the first half of the
current financial year, India's GDP growth is likely to turn positive at 0.1
per cent in the October-December quarter. Traders may take note of that
Agriculture Minister Narendra Singh Tomar said the government is focusing on
farm mechanisation and asked the industry to provide small machines and
equipment to farmers with less landholding to boost their income. Meanwhile,
Finance Minister Nirmala Sitharaman on Monday said the government is planning
to extend the suspension of fresh insolvency proceedings for another three
months, a move which will provide major relief to corporate borrowers hit by
the coronavirus pandemic.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
13,328.40
|
13,047.40
|
13,693.45
|
BSE
Sensex
|
45,553.96
|
44,632.79
|
46,765.40
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Motors
|
755.83
|
164.55
|
158.85
|
173.90
|
Oil
& Natural Gas Corporation
|
587.24
|
89.85
|
86.21
|
96.21
|
State
Bank of India
|
551.61
|
254.70
|
247.50
|
265.45
|
Indian
oil Corporation
|
492.15
|
87.10
|
83.34
|
92.14
|
ITC
|
418.35
|
202.95
|
196.50
|
212.05
|
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