In a volatile session, Indian
equity benchmarks fell for the third day in a row on Tuesday, tracking weakness
across global markets amid renewed concerns about the Omicron variant of
COVID-19. Benchmarks started session on a negative note and stayed in red for
whole day, as traders remained cautious with, as the state health department
said Maharashtra on Monday reported two new patients infected with the new
Omicron variant of SARS-CoV-2. Sentiments remained down-beat with a private
report showed that foreign direct investment (FDI) into India in the July-September
quarter of 2021-22 fell a sharp 42% on year at $13.5 billion from $23.4 billion
a year ago. Some pessimism also came as preliminary data from the statistics
ministry showed India's inflation accelerated again in November, driven by
steep increases in food and fuel prices. The consumer price index rose 4.91
percent year-on-year following a 4.48 percent increase in the previous month.
Street had forecast 5.10 percent inflation. A year ago, inflation was 6.93
percent. However, indices erased most of their early losses in afternoon
session, as traders found some solace with estimates by Export-import Bank of
India showed that India's merchandise exports are expected to grow by 51 per
cent to about $303.98 billion in nine months ending December 2021 over the same
period in 2020. Some support also came with NITI Aayog CEO Amitabh Kant's
statement that the government will continue to push for greater reforms across
sectors. Kant stated India is determined to carry out reforms. We need more and
more reforms and the government will push for greater levels of reforms across
sectors and make things easy and simple. However, markets failed to hold
recovery and ended lower, as some pessimism remained among traders with data
showing that India's inflation based on wholesale price index (WPI) jumped to
14.23% in the month of November as against 12.54% in October. The annual rate
of inflation is 14.23% (Provisional) for the month of November 2021 as compared
to 2.29% in November 2020. Finally, the BSE Sensex fell 166.33 points or 0.29%
to 58,117.09 and the CNX Nifty was down by 43.35 points or 0.25% to 17,324.90.
The US markets settled in red,
following the sharp pullback seen in the previous session, as some large tech
stocks moved lower. Concerns about the outlook for monetary policy continued to
weigh on the markets, as the Federal Reserve's two-day meeting got underway.
With inflation remaining at an elevated rate, the Fed is widely expected to
accelerate its timetable for reducing bond purchases. The Labor Department
released a report showing producer prices increased by more than expected in
the month of November. The report said the producer price index for final
demand advanced by 0.8 percent in November after climbing by 0.6 percent in
October. Street had expected producer prices to rise by 0.5 percent. With the
stronger than expected monthly price growth, the annual rate of producer price
growth accelerated to 9.6 percent in November from 8.8 percent in October. The
Labor Department said the year-over-year spike reflected the largest advance
since 12-month data were first calculated in November 2010. Further, lingering
worries about the new Omicron variant of the coronavirus have also generated
some selling pressure after the World Health Organization warned the new
variant is spreading faster than previous strains. On the sectoral front,
software stocks turned in some of the market's worst performances on the day,
resulting in a 3.3 percent nosedive by the Dow Jones US Software Index.
Considerable weakness was also visible among housing stocks, as reflected by
the 1.8 percent slump by the Philadelphia Housing Sector Index. Oil service
stocks also came under pressure over the course of the session after seeing
early strength, dragging the Philadelphia Oil Service Index down by 1.6
percent.
Crude oil futures ended lower on
Tuesday, extending their previous session's losses, on concerns about the outlook for energy
demand on account of renewed restrictions on movement in several countries amid
rising new cases of the Omicron variant of the coronavirus. Further, oil prices
were also weighed down by a firm dollar amid increasing prospects of the
Federal Reserve resorting to a faster pace of tapering of its asset-buying
program following data showing an acceleration in US producer price inflation.
Meanwhile, the International Energy Agency's (IEA's) report said that the new
variant would slow a recovery in demand for crude contributed as well to the
decline in oil prices. The IEA has cut its 2022 supply forecast from non-OPEC
producers by 100,000 barrels a day and has also said global demand for oil will
drop by 100,000 barrels a day from its earlier forecast. Benchmark crude oil
futures for January delivery fell $0.56 or about 0.8 percent to settle at
$70.73 a barrel on the New York Mercantile Exchange. Brent crude for February
delivery declined $0.94 or 1.25 percent to settle at $73.45 a barrel on
London's Intercontinental Exchange.
Rupee ended substantially weaker
against dollar on Tuesday on account of continued dollar demand from importers
and banks. Besides, selloff in domestic equity markets also weighed on the
rupee sentiment. Traders were worried amid fresh scare over the possible
severity of Omicron variant, after WHO warned it as a very high global risk,
with some evidence that it evades vaccine protection. Additional pressure came
in as India's annual wholesale price-based inflation accelerated to 14.23% in
November, its highest in at least 12 years, boosted by bigger hikes in prices
of fuel and food. On the global front, dollar scaled a one-week high on Tuesday
versus a basket of major currencies, supported by expectations of a hawkish
Federal Reserve meeting and continued uncertainty about the Omicron coronavirus
variant. Finally, the rupee ended 75.88 (Provisional), weaker by 10 paise from
its previous close of 75.78 on Monday.
The FIIs as per Tuesday's data
were net seller in equity segment, while net buyer in debt segment. In equity
segment, the gross buying was of Rs 8433.05 crore against gross selling of Rs
10351.93 crore, while in the debt segment, the gross purchase was of Rs 426.30
crore against gross selling of Rs 340.56 crore. Besides, in the hybrid segment,
the gross buying was of Rs 6.59 crore against gross selling of Rs 10.02 crore.
The US markets ended lower on
Tuesday after data showed producer prices increased more than expected in
November, solidifying expectations the Federal Reserve this week will announce
a faster wind-down of asset purchases. Asian markets are trading mixed on
Wednesday as investors awaited the outcome of the US central bank's policy
review. Indian markets extended losses to the third day in a row on Tuesday, as
renewed concerns about the Omicron variant of COVID-19 spooked investors
globally. Today, markets are likely to make a sluggish opening amid mixed
global cues. Traders will be concerned as the Asian Development Bank for the
second time in three months has scaled down India's growth estimate for the
fiscal year ending March 2022 due to supply chain issue of industries. There
will be some cautiousness as the Centre for Monitoring Indian Economy (CMIE)
stated that the urban unemployment rate spiked to the double-digit rate for the
first time in 17 weeks, to be 10.09% for the week-ended December 12, pushing
the country's overall jobless rate to a nine-week high of 8.53%. The rural
jobless rate was also at a nine-week high of 7.42% during the week. However,
some support may come as the government data showed that India's merchandise
exports jumped 27.16 per cent to $30.04 billion in November on the back of good
performance by sectors like petroleum products, engineering goods and
electronic items. The exports stood at $23.62 billion in November 2020. Some
support may also come as Union Minister of Commerce and Industry Piyush Goyal
said India is becoming the global hub for innovation with the third-largest
startup ecosystem. Traders may take note of Finance Minister Nirmala Sitharaman
said the Centre earned nearly Rs 8.02 lakh crore from taxes on petrol and
diesel during the last three fiscal years, of which more than Rs 3.71 lakh
crore was collected in FY21 alone. Meanwhile, the finance ministry has turned
down a key suggestion of the NK Singh-led Fiscal Responsibility and Budget Management
(FRBM) Committee to set up an independent Fiscal Council consisting of experts
to assess and advise on the government's spending and fiscal policies. NBFCs
stocks will be in focus as the RBI introduced a prompt corrective action (PCA)
framework for large non-banking financial companies (NBFCs), putting
restrictions on para-banks whenever vital financial metrics dip below the
prescribed threshold. The PCA framework for NBFCs comes into effect on October
1 next year on the basis of their financial position on or after March 31. Tata
Group stocks will be in limelight with report that the Tata Group is in
discussions with some major international companies, including those from
Taiwan, for its foray into the semiconductor chip business. Besides, HP Adhesives,
one of the leading manufacturers of consumer adhesives and sealants, Rs 126
crore IPO will open for subscription today. The price band for the issue is Rs
262 - 274 per share.
Support and Resistance: NSE (Nifty) and BSE
(Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
17,324.90
|
17,241.74
|
17,392.14
|
BSE Sensex
|
58,117.09
|
57,839.84
|
58,358.39
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ITC
|
375.08
|
228.20
|
224.80
|
234.35
|
Power
Grid Corporation of India
|
360.31
|
212.30
|
205.95
|
215.90
|
Tata
Motors
|
177.22
|
489.40
|
484.49
|
493.14
|
ICICI
Bank
|
174.88
|
757.80
|
747.95
|
766.00
|
Oil
& Natural Gas Corporation
|
123.31
|
146.35
|
144.39
|
147.89
|
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Maruti Suzuki India's light commercial vehicle -- Super Carry has crossed one lakh sales cumulative milestone in five years of its launch in the country.
Tech Mahindra has achieved new Premier Consulting Partner status in the AWS Partner Network.
L&T's construction arm -- L&T construction has secured a large order for its buildings and factories business from the Government of Odisha.