Indian equity benchmarks ended
lower for the second straight day with losses of over half percent on Wednesday
due to sharp selloff in Metal, IT and TECK counters amid weak global trends.
Traders also awaited Q3 earnings from India Inc, which kicks off next week.
Markets made a negative start and traded with a negative bias throughout the
day as traders got anxious with the HSBC India Manufacturing PMI survey,
conducted by S&P Global, showing India's manufacturing Purchasing Managers'
Index (PMI), compiled by S&P Global, was recorded at an 18-month low of
54.9 in December as against 56.0 in November. Despite the fall, the HSBC India
Manufacturing PMI was indicative of a marked improvement in the health of the
sector. It also showed the sector still expanding strongly in December despite
a loss of growth momentum. Some cautiousness also prevailed in the markets with
ICRA's report stating that at the first weekly auction of the last quarter of
2023-24, the states saw their interest burden sharply rising to cross the 7.7
percentage mark on Tuesday, leading to the spread between the cut-off of
10-year state bonds and the G-sec yield crossing the 50 basis points mark for
the first time in two years. Sentiments remained down-beat in late afternoon
deals, amid crude oil price fluctuations as tensions are on a rise with Iran's
deployment of a warship in the Red Sea in response to the US Navy destroying
three Houthi boats. Traders overlooked a private report projecting a much lower
current account deficit which is likely to print at 1 per cent for this fiscal,
leaving the balance of payment surplus at $39 billion, as the country's
external balances are stronger than expected on the back of strong inflows.
Traders also paid no heed towards a report by economic think tank GTRI stating
that countries ranging from large economies like Europe, and the UK to smaller
ones, including Oman and Peru, want to have a free trade agreement with India
due to the country's large and rapidly growing market. Finally, the BSE Sensex
fell 535.88 points or 0.75% to 71,356.60 and the CNX Nifty was down by 148.45
points or 0.69% to 21,517.35.
The US markets ended lower with
Nasdaq settling cut of over one percent after the minutes of the Federal
Reserve's latest monetary policy meeting reiterated officials widely expect to
begin lowering interest rates in 2024, although they also highlighted an
unusually elevated degree of uncertainty about the outlook for rates and the
economy. Projections provided by Fed officials at the December 12-13 meeting
suggested three quarter point rate cuts by the central bank are likely by the
end of 2024. The forecasts were backed up by the minutes, which said baseline
projections implied that a lower target range for the federal funds rate would
be appropriate by the end of 2024. However, the minutes said participants also
noted an unusually elevated degree of uncertainty and that it was possible
further rate increases could be appropriate. The minutes said several
participants also observed that circumstances might warrant keeping rates at
current levels for longer than they currently anticipated. The minutes indicated
the high degree of uncertainty surrounding the economic outlook was partly due
to the possibility that the momentum of economic activity may be stronger than
currently assessed, posing an upside risk to both inflation and economic
activity. On the economic data front, a report released by the Institute for
Supply Management (ISM) showed U.S. manufacturing activity contracted at a
slightly slower rate in the month of December. The ISM said its manufacturing
PMI rose to 47.4 in December from 46.7 in November, but a reading below 50
still indicates contraction. Street had expected the index to inch up to 47.1.
The uptick by the headline index partly reflected a turnaround by production,
with the production index climbing to 50.3 in December from 48.5 in November.
Crude oil futures ended sharply
higher on Wednesday amid concerns about further attacks by Houthi militants
against ships in the Red Sea as well as reports protests in Libya have forced
the shutdown the Sharara oil field, which produces up to 300,000 barrels per
day. Meanwhile, crude oil also benefitted from the release of a statement from
OPEC and their allies reiterating their full commitment to their continued and
unwavering efforts to maintain oil market stability going forward. Benchmark
crude oil futures for February delivery rose by $2.32 or 3.3 percent to settle
at $72.70 a barrel on the New York Mercantile Exchange. Brent crude for March
delivery surged by $2.36 or 3.10 percent to settle at $78.25 a barrel on
London's Intercontinental Exchange.
Indian rupee ended marginally
higher against the US dollar on Wednesday, supported by easing crude oil prices
and foreign fund inflows. Foreign institutional investors (FIIs) were net
buyers in the equity market on Tuesday as they purchased shares worth Rs 1,602.16
crore, according to exchange data. However, gains were limited as India's
manufacturing sector growth slowed in the month of December. According to the
report, the seasonally adjusted S&P Global India Manufacturing Purchasing
Managers' Index (PMI) eased to 54.9 in December 2023 from 56.0 in November
2023. On the global front, the U.S. dollar rose again on Wednesday after
jumping the previous day, underpinned by elevated U.S. Treasury yields and a
cautious turn that weighed on Wall Street. Finally, the rupee ended at 83.29
(Provisional), stronger by 3 paise from its previous close of 83.32 on Tuesday.
The FIIs as per Wednesday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 10235.61 crore against gross selling of Rs 8640.85 crore,
while in the debt segment, the gross purchase was of Rs 1220.65 crore with gross
sales of Rs 270.97 crore. Besides, in the hybrid segment, the gross buying was
of Rs 26.79 crore against gross selling of Rs 36.42 crore.
The US markets ended lower on
Wednesday after minutes of the US Federal Reserve's last meeting showed
uncertainty over the rate cut trajectory. Asian markets are trading mostly in
red on Thursday led by Japan as the country resumed trading after an extended
New Year's holiday during which it witnessed an earthquake and a collision at
Tokyo's Haneda airport involving Japan Airlines. Indian markets remained under
pressure for a second straight day on Wednesday as risk-off sentiment, spread
across global markets, hit domestic shores as well. Today, markets are likely
to open in green after two-days of consolidation. Sentiments will get a boost
as India Ratings and Research upped India's GDP growth estimate for current
fiscal to 6.7 per cent, from 6.2 per cent, citing resilient economy, sustained
government capex and prospect of a new private corporate capex cycle. Some
optimism will also come as Fitch Ratings said the economic growth in Asia
Pacific will remain strong in 2024 and GDP is expected to grow by about 5 per
cent in India and a host of emerging market countries. In its report titled APAC
Cross-Sector Outlook 2024, Fitch said the outlooks for the banking sectors in
India and Indonesia, as well as APAC emerging markets as a whole, move to
improving in 2024, partly reflecting the robust economic backdrop. However,
gains in the markets are likely to remain capped tracking persistent weakness
across global markets. Foreign fund outflows also likely to dent sentiments.
Foreign institutional investors (FIIs) sold shares worth Rs 666.34 crore on
January 3, provisional data from the NSE showed. Auto stocks will be in focus
as the Union Finance Ministry sanctioned an additional Rs 1,500 crore for the
second phase of the Faster Adoption and Manufacturing of Electric Vehicles in
India (FAME-II) programme, addressing fears that funds could run out before the
scheme ends in March 2024 due to robust electric vehicle (EV) sales. A proposal
to increase the outlay for FAME-II from Rs 10,000 crore to Rs 11,500 crore was
approved by the department of expenditure (DoE) on January 2. There will be
some reaction oil & gas industry stocks amid a private report that oil
demand in India is expected to remain positive this year despite worries over
an industrial slowdown in China affecting related economies, and a cut in
global crude production. Sugar industry stocks will be in limelight as the
government notified exports of 8,606 tonnes of raw cane sugar under tariff-rate
quota (TRQ) to the US for 2024. The directorate general of foreign trade (DGFT)
in a public notice said that this quantity has been notified under the TRQ
scheme from October 1, 2023-September 30, 2024. There will be some buzz in
metal stocks as Icra said global prices of metals, including aluminium, are
unlikely to improve considerably in the near term due to uncertainties in the
global macroeconomic environment.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
21,517.35
|
21,452.80
|
21,629.45
|
BSE
Sensex
|
71,356.60
|
71,153.04
|
71,711.07
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Steel
|
451.77
|
135.00
|
133.04
|
138.29
|
Adani
Ports & SEZ
|
330.61
|
1095.40
|
1057.44
|
1138.69
|
ITC
|
240.36
|
477.45
|
470.96
|
482.31
|
Adani
Enterprises
|
197.25
|
3005.00
|
2907.40
|
3150.80
|
ICICI
Bank
|
168.27
|
986.35
|
978.30
|
991.20
|
- Tata Motors has supplied 100
electric buses to Assam State Transport Corporation.
- Sun Pharmaceutical Industries has
acquired 100% of shares of Libra Merger, a company incorporated in Israel.
- LTIMindtree along with Farmers
Edge has launched the Farmers Edge Innovation Lab (FEIL) in Mumbai.
- Dr. Reddy's Laboratories has
acquired MenoLabs business, a leading women's health and dietary supplement
branded portfolio from Amyris, Inc. (Amyris) in Amyris' Chapter 11 sales
process.