Indian equity benchmarks fell for
the second consecutive day and ended with losses of over a percent on Wednesday
ahead of the release of the minutes of the Reserve Bank of India's latest
monetary policy meet and key macroeconomic data from the US, while fears of a
recession linger. Markets made a positive start as traders took some support
with the Reserve Bank of India (RBI) stating that 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 also took note of report that 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. However soon, benchmarks erased initial
gains and slipped into red in morning deals, as traders turned cautious with a
labour bureau's statement that retail inflation for farm and rural workers rose
to 6.87 per cent and 6.99 per cent, respectively, in November on annual basis.
Selling further crept in after Reserve Bank Governor Shaktikanta Das said
underlying economic activity in India continues to be strong, but external
factors will cause some dent to the economy. Some concern also came with a
private report stating that mergers and acquisitions (M&A) activity
globally fell well short of the high-water mark set last year as debt financing
markets collapsed and stock market volatility decimated valuations, and
dealmakers are predicting a slow path to recovery in 2023. Finally, the BSE
Sensex fell 635.05 points or 1.03% to 61,067.24 and the CNX Nifty was down by
186.20 points or 1.01% to 18,199.10.
The US markets settled higher on
Wednesday after upbeat earnings reports from two bellwethers raised hopes that
corporate earnings may be better than feared even with a potential recession.
Nike surged 12% after beating street expectations for quarterly earnings and
revenue. The results lifted other retail stocks. The sports apparel maker also
showed progress in its attempt to clear through inventory, posting a decline
over the previous quarter. Meanwhile, FedEx gained 3.4% after reporting
earnings per share that beat estimates. The company also shared a slew of
cost-cutting plans. Adding to the positive sentiment, the Conference Board
released a report showing a significant improvement in US consumer confidence
in the month of December. The Conference Board said its consumer confidence
index spiked to 108.3 in December from an upwardly revised 101.4 in November.
Street had expected the index to inch up to 101.0 from the 100.2 originally
reported for the previous month. With the much bigger than expected surge, the
consumer confidence index reached its highest level since April 2022. On the
sectoral front, Semiconductor stocks turned in some of the best performances on
the day, with the Philadelphia Semiconductor Index surging by 2.4 percent after
ending Tuesday's trading at its lowest closing level in well over a month.
Significant strength was also visible among energy stocks, which moved sharply
higher along with the price of crude oil.
Crude oil futures sharply higher
on Wednesday after data showed a larger than expected drop in US crude
inventories in the week ended December 16. Data from Energy Information
Administration (EIA) showed crude inventories in the U.S. fell by 5.89 million
barrels last week, more than 3.5 times the estimated decline of 1.66 million
barrels. The American Petroleum Institute's report on Tuesday showed a decrease
of 3.1 million barrels of crude oil in US inventories last week versus an
expected drop of 1.7 million barrels. Besides, hopes about China relaxing some
of its Covid-19 curbs also contributed to the jump in oil prices. Benchmark
crude oil futures for February delivery gained $2.06 or 2.7 percent at $78.29 a
barrel on the New York Mercantile Exchange. Brent crude for February surged
$2.21 or 2.76 percent to settle at $82.20 a barrel on London's Intercontinental
Exchange.
Indian rupee tumbled against
dollar on Wednesday on the back of massive losses in domestic equities.
Sentiments remained negative with Reserve Bank Governor Shaktikanta Das'
statement that the underlying economic activity in India continues to be
strong, but external factors will cause some dent to the economy. On the global
front, yen traded flat on Wednesday after surging almost 4% in the previous
session, when the Bank of Japan (BOJ) unexpectedly tweaked a key policy,
allowing government bond yields more room to move. Besides, the rouble plunged
to its weakest level since early May past 70 against the dollar on Wednesday,
extending weekly losses with fears over sanctions on Russian oil and gas
spooking the market. Finally, the rupee ended at 82.80 (Provisional), weaker by
10 paise from its previous close of 82.70 on Tuesday.
The FIIs as per Wednesday's data
were net buyers in equity segment, while net sellers in debt segment. In equity
segment, the gross buying was of Rs 5793.52 crore against gross selling of Rs
4575.28 crore, while in the debt segment, the gross purchase was of Rs 810.21
crore against gross selling of Rs 817.56 crore. Besides, in the hybrid segment,
the gross buying was of Rs 2.21 crore against gross selling of Rs 10.30 crore.
The US markets ended higher on
Wednesday with help from upbeat Nike and FedEx quarterly earnings, as well as
improving consumer confidence and easing inflation expectations from investors.
Asian markets are trading mostly in green on Thursday carrying on the optimism
on Wall Street. Indian markets ended lower on Wednesday as surging COVID cases
in China and concerns over renewed outbreaks in other countries sapped risk
appetite. Today, markets are likely to get optimistic start tracking firm
global cues. Sentiments will get a boost as former Niti Aayog vice chairman
Arvind Panagariya said the Indian economy is likely to grow at over 7 per cent
in the current fiscal year, and observed that the growth rate should sustain
next year too provided the forthcoming Budget does not have any negative surprises.
Panagariya further said recessionary fears have been around for a while but so
far neither the US nor the EU has gone into recession. Some optimism will come
as Union Finance Minister Nirmala Sitharaman exuded confidence that tax revenue
generation in the current fiscal year (FY23) would be sufficient to fund the
additional spending of Rs 3.26 trillion, for which her ministry has sought
Parliamentary approval. Traders may take note of report that India, which has
already been in talks with Russia for a rupee-rouble payment system, is now
looking at expanding the rupee trade with other nations as well, including
several countries in Africa, UAE and Saudi Arabia among others. Meanwhile,
Union minister Anupriya Patel said India has signed 13 free trade agreements
(FTAs) and six preferential pacts so far with its trading partners for ensuring
greater market access for domestic goods and promoting exports. However,
renewed fears of covid-19, tepid foreign flows, and rising crude oil prices may
weigh indices. As per provisional data available on the NSE, foreign
institutional investors (FIIs) sold shares worth Rs 1,119.11 crore on December
21. Metal stocks will be in focus as rating agency Icra said the demand for
finished steel in India is expected to grow eight per cent this year compared
to 2021. It said supported by the government's infrastructure-led growth model,
domestic finished steel demand has registered a double-digit growth of 11.9 per
cent in the first eight months of the current fiscal. There will be some
reaction in auto components industry stocks as the Automotive Component
Manufacturers Association of India said India's auto components industry
witnessed a 34.8 per cent growth to Rs 2.65 lakh crore in first-half of
2022-23, riding on domestic demand, particularly from the passenger vehicles
segment. Besides, shares of Sula Vineyards will debut on the bourses today.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
18,199.10
|
18,083.45
|
18,394.05
|
BSE
Sensex
|
61,067.24
|
60,668.26
|
61,736.34
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Steel
|
323.03
|
109.60
|
108.20
|
111.50
|
Tata Motors
|
116.06
|
402.15
|
397.30
|
410.70
|
ICICI Bank
|
113.41
|
893.60
|
881.79
|
910.64
|
Oil & Natural Gas Corporation
|
100.11
|
143.50
|
141.86
|
145.96
|
State Bank of India
|
92.17
|
594.30
|
586.21
|
605.76
|
Bharti Airtel has launched its cutting edge 5G services in Ahmedabad and Gandhinagar.
Axis Bank has received regulatory nod to act as a pension fund manager and has already crossed Rs 100 crore in assets under management for its retirement business.
Maruti Suzuki India is all set to showcase a range of futuristic products and technology at Auto Expo 2023.
BPCL has received the Board of Directors' approval for the financial plan and capital expenditure for laying the piped gas network, building, and operating of 8 CGD Projects.