Snapping four
day losing streak, Indian equity benchmarks ended the volatile day of trade in
green terrain on Monday, as traders opted to buy beaten-down but fundamentally
strong stocks. Markets started the session with weakness and extended losses in
first half of the trade as traders remained anxious, as in its recent Regional
Economic Outlook (REO), the IMF noted that the pandemic has taken a turn for
the worse in Asia since the spring, along with the region's growth outlook. The
growth projection for the Asia and Pacific region is downgraded by more than 1
percent to 6.5 percent compared to the April 2021 forecasts--more than for any
other region. Valuation concerns coupled with persistent selling by FIIs also
kept traders on sidelines. Foreign portfolio investors (FPIs) have turned net
sellers in Indian market by pulling out Rs 3,825 crore in October so far.
However, local bourses staged smart recovery in second half of the trade as
traders went for bargain hunting. Some support also came after industry chamber
PHDCCI said it expects strong GDP growth in the coming quarters with the
economic recovery gaining momentum. Out of the 12 lead economic and business
indicators of QET (Quick Economic Trends), tracked by the industry body, nine
have shown an uptick in the sequential growth for the month of September 2021
as compared to six showing the uptrend in August 2021. Traders also found some
solace with India Ratings & Research's report stating that the
recently-concluded normal monsoon season will provide a much-needed cushion to
both India's agriculture and inflation in 2021-22. Finally, the BSE Sensex rose
145.43 points or 0.24% to 60,967.05 and the CNX Nifty was up by 10.50 points or
0.06% to 18,125.40.
The US markets ended higher on
Monday on optimism about more upbeat earnings reports, with a slew of big-name
companies due to report their quarterly results this week. Facebook, General
Electric, UPS, Alphabet (GOOGL), Coca-Cola, General Motors, McDonald's, Ford,
Amazon, Apple and Exxon Mobil are just a few of the companies due to report
their results in the coming days. Upbeat earnings reports contributed to a
recent upward trend on markets, as most companies have reported better than
expected results. Of the 117 companies in the S&P 500 that have reported
earnings to date, 84% posted numbers that beat expectations. S&P 500
companies are expected to grow profit by about 35% in the third quarter. However,
trading activity was somewhat subdued as a lack of major US economic data kept
some traders on the sidelines. Some traders also have been reluctant to make
more significant moves ahead of the Federal Reserve's monetary policy meeting
next week. The Fed is likely to leave interest rates unchanged but could
announce plans to begin scaling back its asset purchase program. On the
sectoral front, steel stocks showed a substantial move to the upside on the
day, driving the NYSE Arca Steel Index up by 3.5 percent. Considerable strength
was also visible among gold stocks, as reflected by the 1.6 percent gain posted
by the NYSE Arca Gold Bugs Index. The strength in the gold sector came amid an
increase by the price of the precious metal, with gold for December delivery rising
$10.50 to $1,806.80 an ounce.
Crude oil futures ended unchanged
on Monday as prices fell sharply from the day's high during the fag end of the
session, with traders weighing global energy demand and supply positions. Oil
prices rose higher early on in the session, and US oil contract hit multi-year
high, lifted by tight global supply and surging demand for oil in several
countries across the world. Oil prices also found support as the OPEC+ alliance
sticks to an existing pact for a gradual increase in oil output. Benchmark
crude oil futures for December delivery settled unchanged at $83.76 a barrel on
the New York Mercantile Exchange. However, Brent crude for December delivery
gained 46 cents or 0.5 percent to settle at $85.99 a barrel on London's
Intercontinental Exchange.
Indian rupee concluded
substantially weaker against dollar on Monday on account of continued dollar
demand from importers and banks. Sentiments were dampened in its recent
Regional Economic Outlook (REO), the IMF notes that the pandemic has taken a
turn for the worse in Asia since the spring, along with the region's growth
outlook. The growth projection for the Asia and Pacific region is downgraded by
more than 1 percent to 6.5 percent compared to the April 2021 forecasts--more
than for any other region. Adding more pessimism foreign portfolio investors
(FPIs) have turned net sellers in Indian market by pulling out Rs 3,825 crore
in October so far. On the global front, dollar fell on Monday back towards a
one-month low as traders continued to focus on the prospect of interest rate
hikes and tightening outside of the United States. Finally, the rupee ended
75.08, weaker by 18 paise from its previous close of 74.90 on Friday.
The FIIs as per Monday's data
were net seller equity segment, while net buyers in debt segment. In equity
segment, the gross buying was of Rs 6099.04 crore against gross selling of Rs 8883.78
crore, while in the debt segment, the gross purchase was of Rs 2720.67 crore
with gross sales of Rs 523.73 crore. Besides, in the hybrid segment, the gross
buying was of Rs 28.69 crore against gross selling of Rs 21.27 crore.
The US markets ended mostly
higher on Monday buoyed by a robust start to the U.S. corporate earnings season
and an improving economic outlook. Asian markets are trading mostly in green on
Tuesday as corporate earnings and progress on President Joe Biden's economic
agenda helped sentiment even as the debate over inflation risks intensified.
Indian markets closed higher for the first time in last five consecutive
sessions, with minor gains on Monday. Today, benchmarks are likely to start the
session on a positive note tracking gains across global markets. Some support
will come as a private report stated that the economy is likely to register a
9.5 per cent growth this fiscal over 7.3 per cent contraction last year, as the
ongoing recovery is faster and more credible than earlier foreseen. Traders may
take note of Defence Minister Rajnath Singh's statement that India's defence
exports have grown by 334 per cent in the last five years and the country is
exporting to more than 75 countries. Singh said that India's export performance
is a strong indicator of the quality and competitiveness of defence products.
Meanwhile, batting for green hydrogen as a transport fuel, Union Minister Nitin
Gadkari has said there is a need to make India a country that will not be
dependent on imports of petrol and diesel. However, some cautiousness may come
with report that Foreign Institutional Investors (FII) have been net sellers of
domestic stocks for 5 consecutive days now. FIIs sold Rs 2,459 crore worth of
equities on Monday. Domestic Institutional Investors, however, were net buyers
of stocks worth Rs 2,390 crore. There will be some buzz in power stocks as a
press release by CRISIL Ratings stated that solar tariffs might rise to Rs 2.6
per unit to Rs 2.7 per unit from an all-time low of Rs 2 unit over next fiscal
year in the wake of the recent increase in the goods and services tax (GST) on
renewable energy equipment, and the proposed customs duty on imported solar
modules. Telecom stocks will be in focus as the government amended the telecom
licence norms to reduce the tax burden on telecom operators by exempting all
non-telecom revenues, income from dividends, interest, property sale and rent,
among others, for calculation of levies like licence fees and spectrum usage
charges. There will be some reaction in the hotel industry stocks as a report
by the National Restaurant Association of India (NRAI) said the restaurant
business worldwide was one of the hardest hit by the Covid-19 pandemic. The
Indian food services market was no exception, as it witnessed 53 per cent
degrowth in FY2021 compared to the previous fiscal. There will be lots of
important earnings announcements too, to keep the markets in action.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
18,125.40
|
17,982.14
|
18,255.04
|
BSE
Sensex
|
60,967.05
|
60,476.15
|
61,431.46
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ICICI
Bank
|
961.23
|
846.75
|
807.76
|
876.36
|
State
Bank of India
|
356.16
|
507.10
|
498.15
|
515.75
|
Oil
& Natural Gas Corporation
|
345.59
|
161.30
|
159.15
|
163.20
|
Tata
Motors
|
331.00
|
478.80
|
469.36
|
492.11
|
Axis
Bank
|
291.91
|
845.00
|
824.66
|
866.11
|
ICICI Bank has reported 24.77% rise in its consolidated net profit of Rs 6,091.84 crore for Q2FY22 as against net profit of Rs 4,882.33 crore for Q2FY21.
UltraTech Cement's parent organization -- Aditya Birla group is planning to set up a paint unit in West Bengal at an investment of around Rs 1,000 crore, and it will be commissioned in the next 18-24 months.
JSW Steel is planning to levy a surcharge on the sale of its steel products to its long-term OEM (original equipment manufacturer) customers to offset the rising input cost.
NTPC has floated a tender to procure 1 MT of imported coal after a gap of more than two years amid the ongoing shortage of dry fuel at electricity generating projects across the country.