A Tuesday turned out to be
terrible for Indian equity markets, as both Sensex and Nifty witnessed a sharp
fall during the trading session, impacted by heavy selling at Realty and PSU
counters. Selling by FIIs due to reasons like high valuation and mixed results
for the earnings season so far, along with recent escalations in tensions in
the Middle East and Red Sea, prompted the investors to book profit. The start
of the day was on a strong note, as traders got encouragement after the
commerce ministry data showed that India's exports of goods and services rose
marginally by 0.4 per cent to $765.6 billion in 2023 despite global economic
uncertainties. However, markets failed to hold gains and soon turned negative,
as Fitch Group said South Asian economies would be most affected, amid rising
hostilities in the Red Sea due to Houthi attacks. They will experience the
largest relative increase in maritime trade distance, shipping time, and costs
as the crucial trade route remains inaccessible. It added that India's economic
forecast faces a significant risk in the event of a prolonged spell of
disruptions. Losses got intensified during the second half, on the back of
negative cues from European markets. Traders remained cautious ahead of the
release of some key U.S. economic data as well as a slew of major central bank
meetings later this week, including the Bank of Japan, the European Central
Bank, the Bank of Canada and the Norges Bank. Finally, the BSE Sensex fell
1053.10 points or 1.47% to 70,370.55 and the CNX Nifty was down by 333.00
points or 1.54% to 21,238.80.
The US markets ended mostly in
green on Tuesday with S&P 500 climbing to a record high close as investors
digested a mixed bag of early quarterly results and awaited a slew of
additional reports from Tesla and other companies later this week. However, the
Dow pulled back off yesterday's record closing high amid a steep drop by shares
of 3M (MMM), with the conglomerate plunging by 11.0 percent after reporting
better than expected fourth quarter earnings but providing disappointing
guidance. Healthcare giant Johnson & Johnson (JNJ) also moved to the
downside despite reporting better than expected fourth quarter results. On the
sectoral front, Most of the major sectors ended the day showing only modest
moves on the day, contributing to the lackluster close by the broader markets.
Airline stocks showed a substantial move to the upside, however, with the NYSE
Arca Airline Index soaring by 3.0 percent. United Airlines (UAL) helped lead
the sector higher, spiking by 5.3 percent after reporting fourth quarter
results that exceeded analyst estimates on both the top and bottom lines. Gold
stocks also turned in a strong performance amid a modest increase by the price
of the precious metal, as reflected by the 2.3 percent jump by the NYSE Arca
Gold Bugs Index. On the other hand, housing stocks moved sharply lower on the
day, dragging the Philadelphia Housing Sector Index down by 4.4 percent.
Crude oil futures ended lower on
Tuesday as Libya has restarted production at the Sharara oilfield, which
remained shut for about two weeks due to protests. Meanwhile, geopolitical
tensions remained in focus after U.S. and British forces conducted a fresh
series of joint air strikes against Houthi targets in Yemen in a bid to protect
the free flow of commerce. The Iran-backed Houthis, who control the most
populous parts of Yemen, have been targeting ships they say are linked to
Israel and the West. Benchmark crude oil futures for February delivery fell
$0.39 or 0.5 percent to settle at $74.37 a barrel on the New York Mercantile
Exchange. Brent crude for March delivery dropped $0.51 or 0.65 percent to
settle at $79.55 a barrel on London's Intercontinental Exchange.
Indian rupee ended lower against
the US dollar on Tuesday as elevated crude oil prices and weak domestic
equities weighed on investor sentiments. Foreign fund outflows also put
pressure on the rupee. Traders were cautious after Fitch Group said South Asian
economies would be most affected amid rising hostilities in the Red Sea due to
Houthi attacks. They will experience the largest relative increase in maritime
trade distance, shipping time, and costs as the crucial trade route remains
inaccessible. It added that India's economic forecast faces a significant risk
in the event of a prolonged spell of disruptions. On the global front, the yen
languished near a two-month low on Tuesday ahead of a closely-watched policy
decision by the Bank of Japan (BOJ) where expectations are for the central bank
to stand pat on its ultra-loose monetary policy settings. Finally, the rupee
ended at 83.15 (Provisional), weaker by 8 paise from its previous close of
83.07 on Friday.
The FIIs as per Tuesday's data
were net sellers in equity segment, while they were net buyers in debt segment.
In equity segment, the gross buying was of Rs 19475.54 crore against gross
selling of Rs 23029.44 crore, while in the debt segment, the gross purchase was
of Rs 1917.03 crore with gross sales of Rs 1332.07 crore. Besides, in the
hybrid segment, the gross buying was of Rs 19.23 crore against gross selling of
Rs 17.56 crore.
The US markets ended mostly in
green on Tuesday as investors digested a mixed bag of early quarterly results
and awaited a slew of additional reports from Tesla and other companies later
this week. Asian markets are trading mixed on Wednesday as investors monitor
economic data out of Japan as well as factory activity data from Australia.
Indian markets ended significantly lower with cut of around one and half a
percent on Tuesday as selling in financial, and FMCG shares dent the sentiment.
Today, markets are likely to open in green amid mixed global cues. Traders will
be taking encouragement as Union Petroleum Minister Hardeep Puri said the
Indian economy is poised to touch $5 trillion next financial year - 2024-25 -
and capitalise to double to $10 trillion by the end of this decade. At present,
the Indian economy is estimated to be about $3.7 trillion. Some support will
come as data released by the Central Board of Direct Taxes showed that the
government's direct tax-to-GDP ratio stood at a 23-year high of 6.11% in FY23.
The Centre's direct tax collections rose 17.8% year-on-year at Rs 16.6 trillion
in FY23. Corporate tax collections during the year stood at Rs 8.26 trillion,
up 16% on year, and income tax collections stood at Rs 8.33 trillion, 19.6%
higher on year. However, persistent foreign fund outflows likely to dent
sentiments. provisional data from the NSE showed that foreign institutional
investors (FIIs) continued to be net sellers for five days in a row, selling
shares worth Rs 3,115.39 crore on January 23. Sugar stocks will be in focus as
industry body Indian Sugar Mills Association (ISMA) said India's year-on sugar
production till January 15 in the ongoing 2023-24 sugar year (October-November)
is lagging by 5.28%. The sugar production in Maharashtra, which was the top
sugar producing state last year, is lagging by 16%. There will be some reaction
in infrastructure related stocks with a private report that the ratio of cost
overrun in central government infrastructure projects rose to a three-month high
of 18.65% in December. The anticipated completion cost at Rs 30.7 lakh crore
was higher than the original cost of Rs 25.9 lakh crore for 1,820 projects each
worth Rs 150 crore and above. Edible oil industry stocks will be in limelight
with report that the government has asked cooking oil companies to reduce
prices of their products in line with the fall in international rates, but
manufacturers said an immediate reduction may not be possible. Investors
continue to keep eye on earnings of many companies to be out later in the day.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
21,238.80
|
21,037.51
|
21,595.16
|
BSE
Sensex
|
70,370.55
|
69,723.66
|
71,528.31
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
HDFC
Bank
|
577.35
|
1430.95
|
1412.40
|
1462.10
|
ICICI
Bank
|
507.97
|
1027.90
|
1012.94
|
1051.14
|
Tata
Steel
|
353.74
|
130.05
|
127.84
|
133.74
|
State
Bank of India
|
309.54
|
606.00
|
592.80
|
627.05
|
Power
Grid
|
274.92
|
236.75
|
233.06
|
243.61
|
- Tata Consultancy Services has
enabled Euroclear Finland, the National Central Securities Depository of
Finland, to integrate its core platform with the European securities settlement
engine.
- Hero MotoCorp has planned to set
up a facility for assembling products in Nepal in partnership with CG Motors,
its newly appointed distributor in the country.
- Larsen & Toubro's heavy
engineering arm has won multiple orders in the domestic and international
markets.
- Cipla's wholly owned subsidiaries
-- Cipla (EU), UK and Cipla Holding BV, Netherlands, have jointly incorporated Mexicip
S.A. de C.V., a wholly owned subsidiary in Mexico.