Indian equity benchmarks ended
the volatile day of trade near intraday high levels as bulls rejuvenate in late
hour. Markets made a cautious start traded in green and red for most part of
the day ahead of earnings of IT majors as well as key economic indicators like
retail inflation and factory production for directional cues. Market
participants remain concerned with a private report that India's retail
inflation likely edged up in December on higher food prices but stayed within
the Reserve Bank of India's target range for a fourth consecutive month.
Investors also got anxious with report stating that the weighted average rates
of state debt continued to remain at an over two-year high of 7.72 per cent at
the second weekly auction of the quarter on Tuesday, making it the highest so
far this fiscal. At the same time, traders took support with foreign brokerage
report stating that the Indian economy is likely to grow at 6.2 per cent in the
next fiscal, mainly due to the favourable combination of neutral policy
settings, positive credit momentum, and manageable macros amid a 15-year high
household debt levels. Sentiments also got support with World Bank's report
where it is in its Global Economic Prospects report retained India's economic
growth forecast at 6.3% for the current financial year (FY24). It said India is
anticipated to maintain the fastest growth rate among the world's largest
economies, but its post-pandemic recovery is expected to slow. It added that
growth is then expected to recover gradually, edging up to 6.4% in FY2024-25
and 6.5 percent in FY2025-26. But, rally which took place in last leg of trade
mainly helped markets to end near intraday highs. Traders turned optimistic, as
Prime Minister Narendra Modi said that all major rating agencies are of the
opinion that India will be among three largest economies in the world in next
few years. Some support also came with a private report stating that the IPO
and deal-making activities are likely to be brisk this year and may even
surpass the record set in 2021 with around $50 billion funds being raised
across equity issuances and deals. Finally, the BSE Sensex rose 271.50 points
or 0.38% to 71,657.71 and the CNX Nifty was up by 73.85 points or 0.34% to
21,618.70.
The US markets ended higher with
gains of around half percent on Wednesday. The strength on the markets
reflected optimism ahead of the release of key U.S. inflation data in the
comings days. The Labor Department's reports on consumer and producer price
inflation, which are due to be released on Thursday and Friday, respectively,
could have a significant impact on the outlook for interest rates. With street
expecting the reports to show slowdowns in the annual rate of core price
growth, the data could bolster optimism about near-term rate cuts by the
Federal Reserve. However, if the data surprises to the upside, it could add to
recent skepticism about whether the Fed will begin cutting rates in March. On
the sectoral front, Software stocks showed a strong move to the upside on the
day, driving the Dow Jones U.S. Software Index up by 1.6 percent to a record
closing high. Considerable strength was also visible among housing stocks, as
reflected by the 1.5 percent gain posted by the Philadelphia Housing Sector
Index. On the economic data front, wholesale inventories in the U.S. dipped in
line with economist estimates in the month of November, according to a report
released by the Commerce Department. The Commerce Department said wholesale
inventories edged down by 0.2 percent in November after falling by a revised
0.3 percent in October. Street had expected wholesale inventories to slip by
0.2 percent compared to the 0.4 percent decrease originally reported for the
previous month. The modest decline in inventories came as inventories of
non-durable goods fell by 0.5 percent in November after sliding by 0.7 percent
in October, while inventories of durable goods came in unchanged for the second
straight month. Meanwhile, the report said wholesales were virtually unchanged
in November after tumbling by 1.5 percent in October.
Crude oil futures ended lower on
Wednesday after data showed an unexpected increase in U.S. crude inventories in
the week ended January 5th. Data from the Energy Information Administration
(EIA) showed crude oil inventories in the U.S. rose by 1.338 million barrels
last week, as against forecasts for a decline of about 700,000 barrels.
Gasoline stocks increased 8 million barrels last week to 245 million barrels,
while distillate stockpiles rose by 6.5 million barrels last week to 132.4
million barrels, the highest level since September 2021. Benchmark crude oil
futures for February delivery fell by $0.87 or 1.20 percent to settle at $71.37
a barrel on the New York Mercantile Exchange. Brent crude for March delivery
dropped by $0.79 or 1.02 percent to settle at $76.8 a barrel on London's
Intercontinental Exchange.
Rising for the sixth straight
session, Indian rupee ended higher against the dollar on Wednesday tracking a
firm trend in equity markets and easing crude prices. A weakness in greenback
overseas also boosted the domestic currency. Some support came in after the
World Bank retained India's growth rate projection at 6.3 per cent for FY24 and
6.4 per cent for the next fiscal. On the global front, the Japanese Yen
weakened following the release of weaker domestic wage growth data. The Labour
Ministry reported that real wages in Japan shrank for the 20th month in
November. This comes on top of falling rates of inflation in Tokyo -- Japan's
capital city -- and reaffirms bets that the Bank of Japan (BoJ) will not pivot
away from negative interest rates in January. Finally, the rupee ended at 83.03
(Provisional), stronger by 10 paise from its previous close of 83.13 on
Tuesday.
The FIIs as per Wednesday's data
were net sellers in equity segment, while they were net buyers in debt segment.
In equity segment, the gross buying was of Rs 10257.37 crore against gross
selling of Rs 10794.43 crore, while in the debt segment, the gross purchase was
of Rs 1872.41 crore with gross sales of Rs 430.82 crore. Besides, in the hybrid
segment, the gross buying was of Rs 20.09 crore against gross selling of Rs
17.04 crore.
The US markets ended higher on
Wednesday ahead of key inflation readings and bank earnings. Asian markets are
trading mostly in green on Thursday with Japan's Nikkei extending its
record-breaking rally on dovish BOJ bets. Indian markets managed to end
Wednesday's highly volatile session with decent gains as heavyweights Reliance
Industries, ICICI Bank, HDFC Bank and HCL Tech lent support in the fag end.
Today, markets are likely to make flat-to-positive start tracking gains in
global markets and ahead of the weekly F&O expiry. Trading activity likely
to remain subdued due to the beginning of the corporate earnings season after
market hours. India's top IT firms will kick off December quarter earnings,
with TCS and Infosys to report numbers later in the day. The Street expects IT
companies' third quarter (Q3) earnings to remain subdued because of seasonal
furloughs and continued cuts in discretionary spending by clients. Sentiments
will get a boost as Finance Minister Nirmala Sitharaman said India will become
the third largest economy by 2027-28, with a GDP of over $5 trillion. Some
optimism will come as a PHDCCI report noted that India's economy is likely to
surpass $4 trillion in 2024-25 and further escalate to $5 trillion by 2026-27.
The industry chamber also expects the RBI to cut the repo rate by 100 basis
points in a calibrated manner by the end of 2024. Observing that despite global
challenges, India's economy remains resilient, the report said the country is
poised to attain the status of a developed economy by 2047 under the initiative
of Viksit Bharat. Some support will come as State Bank of India chairman Dinesh
Kumar Khara termed the 7.3 per cent growth estimate for the country for FY24 as
a very positive development. Traders may take note of Foreign Secretary Vinay
Kwatra's statement that India and the United Arab Emirates have signed a deal
to explore the establishment of grid connectivity between the two countries.
Kwatra said the deal is part of a total of four memorandums of understanding signed
between New Delhi and Abu Dhabi in the ongoing Vibrant Gujarat Global Summit.
He said one of the pacts is on renewable energy, which also includes green
hydrogen and solar. However, foreign fund outflows may dampen sentiments.
Provisional data from the NSE showed that foreign institutional investors
(FIIs) sold shares worth Rs 1,721.35 crore on January 10. Meanwhile, India has
imposed anti-dumping duties on three Chinese products -- wheel loaders, gypsum
tiles, and industrial laser machinery -- for five years to guard local
manufacturers from cheap imports from the neighbouring country. There will be
some reaction in stocks related to coal industry as the National Coal Index
(NCI) dropped 17.54 per cent to 155.09 points in November 2023 indicating sufficient
coal availability in the market. The NCI was at 188.08 points in November 2022.
This shows a strong supply of coal in the market, with sufficient availability
to meet the growing demand.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
21,618.70
|
21,497.61
|
21,690.81
|
BSE
Sensex
|
71,657.71
|
71,267.84
|
71,890.70
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Steel
|
272.14
|
134.15
|
132.60
|
135.20
|
Power
Grid
|
168.72
|
238.40
|
236.90
|
241.00
|
ONGC
|
165.01
|
212.80
|
210.00
|
215.30
|
NTPC
|
144.55
|
313.40
|
307.69
|
319.44
|
State
Bank of India
|
127.42
|
622.00
|
618.36
|
625.46
|
- ONGC's wholly-owned subsidiary --
ONGC Videsh has incorporated a wholly owned subsidiary namely OVL Overseas IFSC
in GIFT City, Gujarat.
- State Bank of India has concluded
the issue of $600 million senior unsecured fixed rate notes having maturity of
5 years at a coupon of 5 per cent, payable semi-annually, under Regulation-S.
- LTIMindtree has launched its SaaS
based hybrid cloud management platform Canvas CloudXperienz.
- Maruti Suzuki India has inked Non
biding MoU with the State of Gujarat for construction of a new automobile
production plant.