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NSE Intra-day chart (31 January 2022)
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Market Commentary 01 February 2022
Markets to make optimistic start ahead of Union Budget 2022-23


Indian equity benchmarks ended higher with gains of over a percent on Monday, taking positive cues from global markets and favourable takeaways from the Economic Survey report. All eyes were now on the upcoming Union Budget, to be presented by the Finance Minister in Parliament on February 1. Markets opened gap up and continued to trade on a buoyant note, as traders took encouragement with the Federation of Indian Chambers of Commerce & Industry (FICCI) in its latest quarterly survey on Manufacturing revealed that the outlook for India's manufacturing sector seems to have improved in the October-December 2021 quarter even as the cost of doing business remains a cause for concern and hiring prospects remain subdued. The findings of the latest survey also reflect sustained economic activity in the sector, with existing average capacity utilisation in the range of 65 to 70 per cent. Traders also found some solace with Apparel Export Promotion Council (AEPC) Chairman Narendra Goenka stating that the Council is looking at new markets such as Latin America, Australia, and Israel to push the country's apparel exports, which are expected to record healthy growth during the current fiscal and in 2022-23, even though rising raw material prices are impacting the industry. The frontline indices were seen extending gains in noon deals, after the pre-Budget Economic Survey said India's economy is expected to grow by 8-8.5 per cent in the fiscal beginning April 1 and is well placed to meet the future challenges on the back of widespread vaccine coverage, supply-side reforms and easing of regulations. It also said with forex reserves of over $630 billion and plenty of policy room to deal with the situation, India can withstand normalisation of monetary policy by central banks of large economies like the US Federal Reserve. Market participants overlooked data showing that investments in Indian capital through participatory notes (P-notes) rose to Rs 95,501 crore till December-end and experts believe that flow is expected to be flat to negative next month. According to Securities and Exchange Board of India data, the value of P-note investments in Indian markets -- equity, debt and hybrid securities -- was at Rs 95,501 crore by December-end as compared to Rs 94,826 by November-end. Finally, the BSE Sensex rose 813.94 points or 1.42% to 58,014.17 and the CNX Nifty was up by 237.90 points or 1.39% to 17,339.85.


The US markets ended higher on Monday, extending the rally seen in the previous session, as traders continued to pick up tech stocks at reduced levels. Despite the two-day relief rally, the S&P 500 and the Nasdaq Composite posted their worst months since the onset of the pandemic, as investors braced for the Federal Reserve to raise interest rates multiple times this year. Meanwhile, traders were also looking ahead to the Labor Department's closely watched monthly jobs report on Friday. Street currently expect employment to increase by 155,000 jobs in January after rising by 199,000 jobs in December. The unemployment rate is expected to hold at 3.9 percent. The strength of the monthly jobs data could impact expectations regarding how fast the Federal Reserve will raise rates from near-zero levels in an effort to fight inflation. On the sectoral front, semiconductor stocks helped to lead the rally by the tech sector, driving the Philadelphia Semiconductor Index up by 5.4 percent. The index continued to regain ground after hitting its lowest intraday level in over six months before rebounding last Friday. The strength in the tech sector also reflected significant advances by networking, biotechnology and computer hardware stocks. Substantial strength was also visible among airline stocks, with the NYSE Arca Airline Index soaring by 5.2 percent on the day. Retail, gold and brokerage stocks also saw notable strength, while oil service stocks bucked the uptrend despite a sharp increase by the price of crude oil.


Crude oil futures ended higher on Monday on possible disruptions in supply due to mounting political tensions in Europe and the Middle East. Oil prices also rosee amid signs that OPEC and allies won't meet their production targets. The Organization of the Petroleum Exporting Countries and its Russian-led allies, a group known as OPEC+, will meet this week. OPEC+ has so far stuck to a timetable that has seen it add 400,000 barrels a day to output in monthly increments, though members have struggled to meet the increased quotas. On the geopolitical front, after the United Kingdom warned it was highly likely that Russia, the continent's biggest natural gas supplier, was looking to invade Ukraine in lightening war, the head of NATO has said Europe needs to diversify its energy supplies. As the EU depends on Russia for nearly one third of its gas supplies, any interruption would exacerbate an existing energy crisis caused by a shortage. Benchmark crude oil futures for March delivery rose $1.33 or about 1.5 percent to settle at $88.15 a barrel on the New York Mercantile Exchange. Brent crude for April delivery gained $0.74 or 0.80 percent to settle at $89.26 a barrel on London's Intercontinental Exchange.


Indian rupee ended significantly higher against greenback supported by the recovery in domestic equities. Sentiments got boost after the pre-Budget Economic Survey said India's economy is expected to grow by 8-8.5 per cent in the fiscal beginning April 1 and is well placed to meet the future challenges on the back of widespread vaccine coverage, supply-side reforms and easing of regulations. It also said with forex reserves of over $630 billion and plenty of policy room to deal with the situation, India can withstand normalisation of monetary policy by central banks of large economies like the US Federal Reserve. On the global front, sterling traded just off 23-month highs against the euro on Monday and benefited from a dollar pullback at the start of a week that should see the Bank of England raising interest rates for the second time in as many months. Finally, the rupee ended 74.65 (Provisional), stronger by 42 paise from its previous close of 75.07 on Friday.


The FIIs as per Monday's data were net sellers in equity segment and net buyers in debt segment. In equity segment, the gross buying was of Rs 8192.41 crore against gross selling of Rs 13252.91 crore, while in the debt segment, the gross purchase was of Rs 1126.47 crore with gross sales of Rs 205.68 crore. Besides, in the hybrid segment, the gross buying was of Rs 31.57 crore against gross selling of Rs 30.63 crore.


The US markets ended higher on Monday for a second session to wrap up a rough January on the back of buying in tech shares. Asian markets are trading in green on Tuesday tracked strength in Wall Street indices overnight. Indian markets finished 1.4 percent higher on Monday, led by broad-based gains. Today, the markets are likely to make optimistic start following positive global cues. All eyes today will be on the Union Budget, which will be presented by Finance Minister Nirmala Sitharaman in the Parliament at 11 AM. This year's Union Budget will also be presented in paperless form. Traders will be taking encouragement as GST collection in January crossed Rs 1.38 lakh crore in January, a growth of 15 per cent over the year-ago period. The Finance Ministry said total number of GSTR-3B returns filed up to January 30, 2022 is 1.05 crore that includes 36 lakh quarterly returns. Some support will come as India's eight core sectors grew by 3.8 percent in December 2021 compared to 3.4 percent in November 2021. According to data provided by the commerce ministry, coal output rose by 5.2 percent, while that of refinery products increased by 5.9 percent. The increase in output in December 2021 was largest for natural gas, which posted an increase of 19.5 percent. Cement followed closely, with its output rising 12.9 percent. However, there may be some cautiousness as India's Gross Domestic Product (GDP) contracted by 6.6 percent in FY21, according to the National Statistical Office's first revised estimate released on January 31. The revised estimate compares favorably with the provisional estimate of a 7.3 percent contraction, released in May 2021. Traders may be concerned as data released by the Controller General of Accounts showed that the Centre's fiscal deficit rose to 50.4 percent of the FY22 target in April-December 2021, with a huge increase seen in tax collections as well as capital expenditure for the month of December 2021. Meanwhile, according to the latest data from the Reserve Bank of India (RBI), banks' non-food credit growth accelerated to 9.3 percent in December from 6.6 per cent in the same period of the last year. Auto companies are likely to be in focus as they will release their respective January auto sales numbers.


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  • Bharti Airtel has entered into agreement to acquire around 25% equity stake in Bengaluru based technology startup, Lavelle Networks. 
  • HCL Technologies has expanded its partnership with Husqvarna Group with a new multi-year IT services contract. 
  • APSEZ's wholly owned subsidiary -- Adani Krishnapatnam has signed Share Purchase Agreement with Seabird Marine Services, to acquire 100% stake of Seabird Distriparks. 
  • Tata Motors has reported consolidated net loss of Rs 1451.05 crore for Q3FY22 as compared to net profit of Rs 2941.48 crore for Q3FY21.
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