Indian equity benchmarks
continued their bulls run to end at fresh record close on Monday, tracking
gains in HCL Technologies, Infosys and HDFC amid strong earnings expectation.
Markets remained positive throughout the day, as traders took encouragement
with Assocham's statement that India's economy is showing decisive signs of a
V-shaped recovery in 2021 with the return of consumer confidence, robust
financial markets, an uptick in manufacturing and exporters braving it out in
the global market with never-say-die spirit. Sentiments remained upbeat as
India's exports grew 16.22 percent YoY to $6.21 billion in the first week of
January, mainly driven by healthy growth in pharmaceuticals, and engineering sectors,
reflecting signs of revival. Imports during January 1-7 this year too increased
by 1.07 percent to $8.7 billion as against $8.6 billion in the same period of
2020. Some support also came as IHS Markit said Indian economy is likely to
rebound with an 8.9 percent growth in the fiscal year beginning April 2021
after economic activity showed significant improvement in the last quarter.
Benchmarks extended their gains in late afternoon session, taking support from
Union Minister Piyush Goyal's statement that India is strengthening the entire
ecosystem through rapid structural reforms to achieve the same. He said we are
working simultaneously to bring about a quantum leap in our quality, in our
productivity, in our efficiency, so that Indian Industry can truly expand our
export basket, making it bigger, better and broader. Market participants also
took a note of Fitch Ratings in its latest report expects India's economy to
contract by a record 9.4 per cent in the current fiscal year ending March 2021
(FY21) amid the shock from coronavirus pandemic but this represents a 1.1
percentage point improvement from its previous forecast, reflecting a
stronger-than-anticipated rebound in 3Q 2020. Risks to the growth outlook
appear to have eased in recent weeks as vaccine rollouts began in other parts
of the world. Meanwhile, FPIs have pumped Rs 5,156 crore into Indian capital
markets in the first six trading sessions this year amid expectations of strong
third-quarter earnings and a reformist budget. As per depositories data, FPIs
invested a net Rs 4,819 crore in equities and Rs 337 crore in debt segment
between January 1 and 8. Finally, the BSE Sensex rose 486.81 points or 1.00% to
49,269.32, while the CNX Nifty was up by 137.50 points or 0.96% to 14,484.75.
The US markets ended lower on
Monday as investors stayed largely cautious, assessing valuations and taking
some profits. Rising coronavirus cases across the world and concerns about
developments in Washington also weighed on stocks. The US saw at least 208,338
new cases of COVID-19 reported on Sunday and counted at least 1,777 deaths.
Besides, House Democrats are preparing to impeach Donald Trump even though the
president has less than two weeks left in his term. After the siege of the US
Capitol building by Trump supporters last week, Democrats are concerned about
additional incitement by the president in his final days in office. Twitter
shares plunged sharply after the social media platform announced its decision
to permanently suspend Trump's account on fears he could incite further
violence. FaceBook shares slid as well. Sales of Travelers Companies tumbled
more than 10%. Apple, Boeing, American Express, Coca-Cola and Procter &
Gamble also lost notable ground. Meanwhile, on the stimulus front,
President-elect Joe Biden pledged last Friday to come up with a massive
economic stimulus. He said it will be in the trillions of dollars, and will
include $2,000 direct payments to Americans and aid for small businesses.
Crude oil futures ended almost
flat on Monday as pressure from a rising dollar and rising coronavirus cases
and tighter lockdown measures in several countries across the world raised
concerns about outlook for energy demand. The US saw at least 208,338 new cases
of COVID-19 reported on Sunday and counted at least 1,777 deaths, numbers that
may be underreported due to lower weekend staffing. China saw its biggest daily
increase in Covid-19 cases in more than five months, as new infections in Hebei
province, which surrounds the capital Beijing, continued to rise. Investors
fear that travel bans and the closure of schools and workplaces in Europe
coupled with new movement restrictions in China could weigh on fuel demand. Crude
oil futures for February rose a penny to settle at $52.25 a barrel on the New
York Mercantile Exchange. However, March Brent crude declined 33 cents or 0.6
percent to settle at $55.66 a barrel on London's Intercontinental Exchange.
Indian rupee ended considerably
lower against dollar on Monday on emergence of demand for the greenback from
importers and higher US bond yields. Sentiments were impacted despite report
that India's exports grew 16.22 percent YoY to $6.21 billion in the first week
of January, mainly driven by healthy growth in pharmaceuticals, and engineering
sectors, reflecting signs of revival. Imports during January 1-7 this year too
increased by 1.07 percent to $8.7 billion as against $8.6 billion in the same
period of 2020. On the global front, dollar gained broadly on Monday as
widening US Treasury yields and expectations of more fiscal stimulus lifted the
greenback against its rivals, with the euro falling to a two-week low. Finally, the rupee ended at 73.40, 16 paise
weaker from its previous close of 73.24 on Friday.
The FIIs as per Monday's data
were net buyer in both equity segment and debt segment. In equity segment, the
gross buying was of Rs 13159.45 crore against gross selling of Rs 7147.95
crore, while in the debt segment, the gross purchase was of Rs 1094.35 crore
with gross sales of Rs 930.24 crore. Besides, in the hybrid segment, the gross
buying was of Rs 16.72 crore against gross selling of Rs 17.96 crore.
The US markets settled lower on
Monday as investors took some profits after last weeks' records while they
waited for earnings season to begin and eyed events in Washington with
trepidation. Asian markets are trading mixed on Tuesday tracking Wall Street
declines as political turmoil in Washington and rising coronavirus cases
worldwide weighed on sentiment ahead of the start of the quarterly earnings
season. Indian markets ended at record high on Monday mainly led by IT stocks,
which surged after IT major TCS reported better than expected earnings in the
December quarter. Today, the markets are likely to make flat-to-negative start
amid weakness in global markets. Investors will be eyeing the Index of
Industrial Production (IIP) and Consumer Price Index (CPI) data to be out later
in the day. Traders will be concerned as the Reserve Bank of India (RBI) warned
that the Indian banking system's bad loans may rise to a two-decade high on the
back of COVID-19 induced stress. In its latest Financial Stability Report
(FSR), the RBI said Public Sector Banks (PSBs) may see gross NPAs rise from 9.7
percent in September 2020 to 16.2 percent by September 2021. However, some
respite may come later in the day as ICRA projected that India's GDP will
record a double-digit expansion of 10.1 percent in the upcoming fiscal year. It
also expects the monetary policy to be changed to neutral from accommodative in
the August 2021 Policy review or later. Some support may come with report that
Bharat Biotech inked a purchase agreement with the Government of India on
January 11 to provide 55 lakh doses of COVID-19 vaccine Covaxin at Rs 295 per
dose. The Indian pharma firm will be providing its coronavirus vaccine directly
to 12 states, and the process will be completed in two days by January 14.
Market participants may take note of report that India continues to show a
downward trend in the number of new coronavirus cases. In the last 24 hours,
only 12,448 fresh cases were recorded which took the tally to 10,479,879. Meanwhile,
the National Stock Exchange (NSE) has launched derivatives on the Nifty
Financial Services Index, which will give more flexibility to institutional as
well as retail investors to manage their hedge. Auto stokes will be in focus as
automobile dealers' body FADA said passenger vehicle (PV) retail sales in
December witnessed a year-on-year increase of 23.99 per cent to 2,71,249 units
on the back of the pent up demand continuing from the festive season. There
will be some reaction in aviation industry stocks with ICRA's report that
India's domestic traffic declined around 45 per cent to about 71 lakh
passengers in December last year over December 2019 even as passenger traffic
was up 12 per cent sequentially over November 2020. There will be some earnings
announcements too to keep the markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
14,484.75
|
14,412.50
|
14,527.60
|
BSE
Sensex
|
49,269.32
|
49,049.21
|
49,396.62
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Motors
|
1,824.83
|
220.65
|
205.06
|
230.81
|
Wipro
|
473.34
|
446.80
|
437.54
|
453.54
|
ITC
|
429.71
|
202.50
|
200.46
|
205.31
|
Oil
& Natural Gas Corporation
|
363.02
|
102.55
|
99.44
|
104.29
|
State
Bank of India
|
297.03
|
282.50
|
278.66
|
287.26
|
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