Indian equity benchmarks ended
lower on Thursday after having run up for the last four consecutive session,
with frontline gauges tumbling below their crucial 59,700 (Sensex) and 17,750
(Nifty) levels on sustained selling by funds and retail investors. The domestic
markets witnessed a gap-down opening and extended their losses as rising
Coronavirus cases in the country sparked fears of renewed curbs to contain the
spread of the virus which may impact the nascent economic growth in the
country. The sentiments remained down-beat as ICRA Ratings warned that the
third wave of the pandemic is likely to shave 40 bps of the fourth quarter
Gross Domestic Product (GDP) growth that may print in at 4.5-5 per cent. It
said third wave of the pandemic has seen a massive spike in infections after
the more infectious Omicron variant of the coronavirus appeared. Frontline
indices continued to trade in red terrain in afternoon deals, as traders
remained cautious with report stating that the cost of debt-funds for the
states has touched the highest level so far this fiscal with the weighted
average cut-off crossing the 7.16 percentage points at the latest auctions, up
11 bps over the past week, reflecting the hardening yields even for the
government securities. However, markets managed to cut some losses in late hour
of trading session, as traders took some support with rating agency ICRA's
repost that a focussed road map, including timely interventions by the
government, is necessary for the country in order to achieve the net zero
target by 2070. It calls for timely interventions by the government and large
capex/investments in GHG (greenhouse gas) emitting sectors like power, industry
and transport. Traders took note that Union Minister of Commerce &
Industry, Consumer Affairs, Food & Public Distribution and Textiles, Piyush
Goyal called for transparency and the highest level of integrity in the stock
markets, adding that this will empower households to look at greater incomes
through investment besides encourage foreign investors. Finally, the BSE Sensex
fell 621.31 points or 1.03% to 59,601.84 and the CNX Nifty was down by 179.35
points or 1.00% to 17,745.90.
The US markets ended lower on
Thursday, following the sell-off seen in the previous session, on uncertainty
about the near-term outlook for the markets. Sentiments were cautious as the US
trade deficit widened significantly in the month of November, according to a
report released by the Commerce Department. The report said the trade deficit
widened to $80.2 billion in November from a revised $67.2 billion in October.
Street had expected the deficit to widen to $77.1 billion from the $67.1
billion originally reported for the previous month. The wider than expected
trade deficit came as the value of imports spiked by 4.6 percent to $304.4
billion in November after jumping by 1 percent to $291.0 billion in October. Meanwhile,
after reporting US service sector growth at a record high in the previous
month, the Institute for Supply Management (ISM) released a report showing a
notable slowdown in the pace of growth in the sector in the month of December.
The ISM said its services PMI slid to 62.0 in December from 69.1 in November,
although a reading above 50 still indicates growth. Street had expected the
index to drop to 66.9. The pullback by the headline index came as the new
orders index tumbled to 61.5 in December from 69.7 in November and the business
activity index slumped to 67.6 from 74.6 in the previous month. The employment
index also dipped to 54.9 in December from 56.5 in November, indicating a
modest slowdown in the pace of job growth in the service sector.
Crude oil futures ended higher on
Thursday, extending their previous sessions' gains, on escalating unrest in
OPEC+ oil producer Kazakhstan and supply outages in Libya. Russia sent
paratroopers into Kazakhstan on Thursday to help quell a countrywide uprising
after deadly violence spread across the tightly controlled former Soviet state.
Kazakhstan produces about 1.6 million barrels of oil per day. However, there
are no indications that oil production has been hit so far. Meanwhile, as a
result of disruptions due to pipeline maintenance work and oilfield shutdowns,
oil output has dropped by over 500,000 barrels per day in Libya. Further, hopes
that the Omicron variant of the coronavirus will not significantly impact
global oil demand also contributed to the increase in prices. Benchmark crude
oil futures for February delivery surged $1.61 or 2.1 percent to settle at
$79.46 a barrel on the New York Mercantile Exchange. Brent crude for March
delivery rose $1.2 or 1.5 percent to settle at $82.00 a barrel on London's
Intercontinental Exchange.
Rupee ended weaker against dollar
on account of continued dollar demand from importers and banks. Sentiments were
fragile as minutes from the Federal Reserve meeting signal that the US central
bank might hike interest rates faster than anticipated to cool inflation, and
this could lead to outflows from the domestic markets. According to minutes
from the Fed's December 14-15 policy meeting, policymakers believe the US job
market is nearly healthy enough and ultra-low interest rates are no longer
needed. Traders were also worried as ICRA Ratings warned that the third wave of
the pandemic is likely to shave 40 bps of the fourth quarter Gross Domestic
Product (GDP) growth that may print in at 4.5-5 per cent. It said third wave of
the pandemic has seen a massive spike in infections after the more infectious
Omicron variant of the coronavirus appeared. Downfall in equity markets also
impacted traders' sentiments. On the global front, pound fell versus dollar and
euro on Thursday, pulling back from some its recent gains in a dip driven by
dollar strength following the release of more hawkish than expected Federal
Reserve minutes. Finally, the rupee ended 74.42, weaker by 4 paise from its
previous close of 74.38 on Wednesday.
The FIIs as per Thursday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 7620.66 crore against gross selling of Rs 7029.08 crore, while
in the debt segment, the gross purchase was of Rs 306.44 crore with gross sales
of Rs 114.36 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.40
crore against gross selling of Rs 6.87 crore.
The US markets ended lower on
Thursday as technology shares fell but financials lent support a day after the
market sold off on a hawkish slant in Federal Reserve minutes. Asian markets
are trading mostly in green on Friday despite losses on Wall Street. Indian
markets broke a 4-day winning run to close a percent lower on Thursday. Today,
the markets are likely to make cautious start amid mixed global cues. Rising
coronavirus cases are likely to dampen sentiments in the markets. India
reported 1,16,836 new COVID-19 cases on Thursday, the highest in over 200 days,
taking India's caseload to 3,52,25,699, according to data released by the
health bulletins of States and Union Territories. There will be some
cautiousness as India Ratings and Research said the Omicron variant spread will
impact the January-March quarter GDP by 0.40 per cent and shave off 0.10 per
cent from the FY22 growth, as many states resort to restrictions to limit
infections. It added curbs in various forms such as reducing the capacity of
market/market complexes and night/weekend curfews to check human
mobility/contact have already started in several states, which are impacting
economic activities. Traders will be concerned with report that India is aiming
for a fiscal deficit of 6.3 percent to 6.5 percent of gross domestic product
for the next financial year, a less ambitious target than previously planned as
COVID-19 infections threaten the economic recovery. However, some support may
come later in the day as the finance ministry released monthly revenue deficit
grant to 17 states totalling Rs 9,871 crore. So far, an amount of Rs 98,710
crore has been released to 17 states as post devolution revenue deficit grant
in the current financial year. Traders may take note of report that amid fears
that the new coronavirus variant may disrupt normal business activity, industry
chamber CII pitched for coordinated actions by the Centre and state governments
to minimize the impact of Omicron on the economy. Meanwhile, the commerce and
industry ministry is making changes in the foreign direct investment (FDI)
policy to facilitate disinvestment of the country's largest insurer LIC, after
taking views from the finance ministry. Banking stocks will be in focus as
rating agency Icra said the asset quality of the banking system, especially the
restructured book, may face headwinds in the coming days as Covid-19 cases have
started rising rapidly once again. There will be some reaction in insurance
industry stocks as the regulator Irdai decided to set up two hubs on motor
insurance and property insurance and also an advisory committee with the
overall objective to promote loss prevention measures in the general insurance
industry. Sugar industry stocks will be in limelight as trade body AISTA
demanded respective state governments to allow truck movement 24X7 to increase
the pace of export with maximum quantities of exportable sugar getting lifted
from Maharashtra and Karnataka putting pressure on logistics.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
17,745.90
|
17,668.31
|
17,810.71
|
BSE Sensex
|
59,601.84
|
59,334.32
|
59,825.60
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Bharti
Airtel
|
216.42
|
710.75
|
700.34
|
720.84
|
State
Bank of India
|
181.90
|
491.35
|
486.36
|
495.36
|
Tata
Motors
|
165.63
|
488.40
|
479.35
|
495.20
|
ICICI
Bank
|
130.18
|
786.80
|
776.36
|
794.86
|
Coal
India
|
124.46
|
154.65
|
153.39
|
155.59
|
Reliance Industries' majority-owned subsidiary -- Jio Platforms has partnered with Zupee.
L&T's construction arm -- L&T construction has secured a slew of orders for the Water and Effluent Treatment Business from various prestigious clients.
SBI has reportedly invested $20 million in Pine Labs.
HDFC Bank has entered into MoU with Software Technology Parks of India's SPV -- AIC STPINEXT Initiatives.