Breaking 5-day
losing streak, Indian equity benchmarks staged a smart recovery from opening
lows and closed at day's high on Tuesday, led by strong buying interest in PSU,
telecom and utilities stocks. The benchmark indices had opened with a massive
downside gap, as traders remained cautious after ICRA projects fiscal deficit
at a higher Rs 17.9 trillion, driven by the two major outlays intended to
bolster confidence amongst households, namely free food grains under the PMGKAY
scheme and an enhanced outgo for MGNREGA. Some cautiousness also came as
private report stated that the ongoing third wave of the coronvirus pandemic
has dragged business activity almost back to the pre-pandemic levels. Traders
were also worried as exchange data showed Foreign Institutional Investors
(FIIs) remained net sellers in the capital market as they offloaded shares
worth Rs 3,751.58 crore on Monday. However, equity markets reversed losses
during the second half of the trading session, taking support from former Niti
Aayog Vice Chairman Arvind Panagariya's statement that the Indian economy has
recovered 'handsomely' from the pandemic-induced disruptions, while expressing
hope that the recovery will be sustained and the growth rate of 7 to 8 per cent
will be restored. Traders also found some solace with the commerce ministry's
statement that exports of engineering goods rose 54 per cent to $81.8 billion
during April-December 2021-22 as compared to the same period of the previous
year. In the corresponding nine-month period of 2020-21, exports stood at $52.9
billion. The sector accounted for over 27 per cent in India's total exports
basket during the period. Adding to the optimism, around 10.28 lakh new members
joined the ESIC-run social security scheme in November 2021 against 12.39 lakh
in the previous month, giving a perspective on formal sector employment in the
country. The latest data is part of a report released by the National
Statistical Office (NSO). Finally, the BSE Sensex rose 366.64 points or 0.64%
to 57,858.15 and the CNX Nifty was up by 128.85 points or 0.75% to 17,277.95.
The US markets ended mostly lower
on Wednesday after the Fed indicated that it plans to begin raising interest
rates soon, citing elevated inflation and a strong labor market. The Fed left
interest rates unchanged at near-zero levels as widely expected but said the
Federal Open Market Committee (FOMC) expects it will soon be appropriate to
raise the target range for the federal funds rate. The comments from the Fed
were largely in line with expectations, as CME Group's FedWatch Tool currently
points to an 85.7 percent chance of a quarter-point rate hike at the next FOMC
meeting in mid-March. In an effort to combat the economic impact of the
coronavirus pandemic, the Fed has left interest rates at zero to 0.25 percent
since March of 2020. The Fed previously pledged to leave interest rates
unchanged until labor market conditions have reached levels consistent with the
FOMC's assessments of maximum employment. Fed Chair Jerome Powell claimed that
the central bank has quite a bit of room to raise interest rates before it
would harm the economy. The central bank also said it would further reduce the
pace of its bond purchases to $30 billion per month beginning in February, with
the Fed saying it expects to end its asset purchase program by early March. In
a separate statement, the Fed outlined plans to significantly reduce the size
of its balance sheet, saying it expects to start the reductions after it begins
raising interest rates.
Crude oil futures ended higher on
Wednesday amid rising geopolitical tensions. US President Joe Biden has warned
Moscow of damaging sanctions, including measures personally targeting President
Vladmir Putin, if Russia invades Ukraine. Meanwhile, in the Middle East, the
United Arab Emirates is reportedly looking to upgrade its defensive
capabilities following the missile and drone attacks on the UAE by Houthi
rebels over the past two weeks. Besides, crude oil prices rose despite data
showing a larger than expected increase in US crude inventories last week. The
Energy Information Administration said that crude oil inventories rose by 2.4
million barrels during the week ended January 21. The Street was expecting an
increase of just 150,000 barrels. Benchmark crude oil futures for March
delivery rose $1.75 or 2 percent to settle at $87.35 a barrel on the New York
Mercantile Exchange. Brent crude for March delivery gained $1.22 or 1.4 percent
to settle at $ 88.40 a barrel on London's Intercontinental Exchange.
Continuing previous sessions
drubbing, Indian rupee concluded substantially weaker against dollar on Tuesday
on account of continued dollar demand from importers and banks. Sentiments
remained under pressure as ICRA projects fiscal deficit at a higher Rs 17.9
trillion, driven by the two major outlays intended to bolster confidence
amongst households, namely free food grains under the PMGKAY scheme and an
enhanced outgo for MGNREGA. Traders failed to take solace with the commerce
ministry statement that exports of engineering goods rose 54 per cent to $81.8
billion during April-December 2021-22 as compared to the same period of the
previous year. In the corresponding nine-month period of 2020-21, exports stood
at $52.9 billion. The sector accounted for over 27 per cent in India's total
exports basket during the period. On the global front, dollar edged higher on
Tuesday to within striking distance of its two-week peak, as investors bought
safe-haven currencies amid tensions between Russia and the West over Ukraine
while awaiting the outcome of the Federal Reserve's policy meeting. Finally,
the rupee ended 74.78 (Provisional), weaker by 18 paise from its previous close
of 74.60 on Monday.
The FIIs as per Tuesday's data
were net sellers in equity segment, while net buyers in debt segment. In equity
segment, the gross buying was of Rs 5622.73 crore against gross selling of Rs
9521.92 crore, while in the debt segment, the gross purchase was of Rs 1113.93
crore against gross selling of Rs 80.46 crore. Besides, in the hybrid segment, the
gross buying was of Rs 16.90 crore against gross selling of Rs 14.21 crore.
The US markets ended mostly lower
on Wednesday taking an abrupt nosedive that reversed earlier solid gains after
the U.S. Federal Reserve released its statement at the conclusion of its
two-day policy meeting. Asian markets are trading mostly in red on Thursday as
investors digested Fed Chair Jerome Powell's comments. Indian markets ended a
choppy session slightly higher on Tuesday, with Axis Bank's upbeat earnings
results, expectations surrounding upcoming Union Budget and a firm trend in
European markets offering some support. Markets were closed on Wednesday on
account of Republic Day. Today, the markets are likely to make gap-down
opening, a day of the monthly expiry of January month derivatives contract.
There will be some cautiousness as the International Monetary Fund (IMF) cut
India's economic growth forecast to 9 per cent for the current fiscal year
ending March 31, joining a host of agencies which have downgraded their
projections on concerns over the impact of a spread of new variant of
coronavirus on business activity and mobility. Continues selling in FIIs may
weight on the markets. As per provisional data available on the NSE, foreign
institutional investors (FIIs) net sold shares worth Rs 7,094.48 crore on
January 25. Meanwhile, India has initiated an anti-dumping probe against
imports of a certain type of tiles, used for covering the floors in residential
and commercial buildings, from China, Taiwan and Vietnam following a complaint
by domestic players. Gems and jewellery related stocks will be in focus as the
commerce ministry said gems and jewellery exports rose by 71 per cent during
April-December 2021 to $28.9 billion as compared to $16.9 billion in the same
period of the previous year. In December 2021, these exports grew by 16.38 per
cent to $2.99 billion. There will be some reaction in aluminium industry stocks
as Arguing that growing imports of scrap is threatening the primary aluminium
industry, an umbrella industry body has urged the finance minister to raise
basic customs duty on aluminium scrap to 10% from 2.5% now. Besides, The Rs
3,600-crore Adani Wilmar IPO will open on Thursday (January 27, 2022), and will
close on Monday (January 31). A joint venture between Adani Group and the
Wilmar Group, Adani Wilmar is an FMCG food company offering most of the
essential kitchen commodities. The edible oil major has fixed a price band of
Rs 218-230 per share for the public issue.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,277.95
|
16,973.45
|
17,445.80
|
BSE
Sensex
|
57,858.15
|
56,856.21
|
58,413.51
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Axis Bank
|
380.88
|
704.60
|
690.46
|
736.86
|
Tata Motors
|
225.65
|
478.45
|
466.56
|
491.41
|
State Bank of India
|
217.91
|
494.15
|
482.94
|
511.44
|
Power Grid Corporation of India
|
205.41
|
214.00
|
210.56
|
218.81
|
ICICI Bank
|
195.13
|
798.45
|
788.24
|
806.49
|
Hero MotoCorp has received approval from its board for investment up to Rs 700 crore in Hero FinCorp.
Axis Bank has reported around 3-fold jump in its consolidated net profit at Rs 3,973.07 crore for Q3FY22 as compared to Rs 1,334.84 crore for Q3FY21.
TCS is now a partner for the newly-launched Microsoft Cloud for Retail, expanding its collaboration with the hyperscaler.
Wipro has received the Palo Alto Networks EMEA Systems Integrator Partner of the year for 2021.