Indian equity benchmarks ended
lower for fourth session in a row on Wednesday, tracking losses in index majors
Bajaj Finance, Bajaj Finserv, ITC and TCS. After making cautious start,
frontline indices slipped into red terrain, as traders got anxious as Asian
Development Bank (ADB) for the second time in three months scaled down India's
growth estimate for the fiscal year ending March 2022 due to supply chain issue
of industries. It has pegged India's growth estimate at 9.7% for the current
fiscal in its latest supplement. It had projected a growth rate of 10% in its
September supplement. Some anxiety also came as 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%. However, key indices have recouped some of its losses
in late afternoon deals, taking support from the government data showing 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. Some support also came with Foreign Secretary Harsh
Vardhan Shringla's statement that the Indian economy is rapidly recovering from
the pandemic-induced downturn and is returning to its trajectory of rapid
growth. He also said India's trade figures are promising and that the total
foreign direct investment the country received in the current financial year
stood at $81.72 billion, the highest ever.
Though, markets failed to hold recovery and ended lower with losses of
over half percent, as some concern remained among traders with data showing
that foreign institutional investors (FIIs) remained net sellers in the capital
market, as they sold shares worth Rs 763.18 crore on Tuesday. Besides,
nervousness ahead of the US Fed outcome and increasing warning calls by the
World Health Organisation (WHO) against the Omicron coronavirus variant, which
is now spreading faster than the Delta variant, also kept investors on the
sidelines. Finally, the BSE Sensex fell 329.06 points or 0.57% to 57,788.03 and
the CNX Nifty was down by 103.50 points or 0.60% to 17,221.40.
The US markets ended sharply
higher after the Fed announced its widely expected decision to accelerate the
pace of reductions to its asset purchases program. Citing inflation
developments and further improvement in the labor market, the Fed said it has
decided to reduce the monthly pace of its net asset purchases by $30 billion
per month, double the previously announced $15 billion per month. Beginning in
January, the Fed will increase its holdings of Treasury securities by at least
$40 billion per month and of agency mortgage-backed securities by at least $20
billion per month. The $60 billion per month in asset purchases is half the
$120 billion per month the Fed bought from June 2020 to October 2021. The Fed
said it expects similar reductions in the pace of net asset purchases will
likely be appropriate each month, pointing to an end to the program next March.
Meanwhile, the Fed also announced its widely expected decision to keep the
target range for the federal funds rate at zero to 0.25 percent. The Fed noted
inflation has exceeded its 2 percent target for some time but predicted
interest rates will remain at near-zero levels until labor market conditions
have reached levels consistent with its assessments of maximum employment. The
central bank's latest projections forecast as many three rate hikes in 2022
compared to the lone rate hike forecast in September. On the sectoral front,
Semiconductor stocks moved sharply higher over the course of the session,
driving the Philadelphia Semiconductor Index up by 3.7 percent. Substantial
strength also emerged among networking stocks, as reflected by the 3.1 percent
spike by the NYSE Arca Networking Index.
Crude oil futures ended higher on
Wednesday as Data released by Energy Information Administration (EIA) showed
crude inventories in the US dropped by 4.6 million barrels in the week ended
December 10. The EIA data also said gasoline stockpiles were down by nearly
720,000 barrels last week, while distillate stocks fell by 2.85 million barrels
in the week. However, Oil prices drifted lower earlier in the day, weighed down
by virus worries after the World Health Organization Chief stated that 77
countries have reported cases of Omicron and the variant of coronavirus is
spreading at an unprecedented rate. Benchmark crude oil futures for January
delivery rose $0.14 or about 0.2 percent to settle at $70.87 a barrel on the
New York Mercantile Exchange. Brent crude for February delivery gained $0.30 or
0.41 percent to settle at $74.00 a barrel on London's Intercontinental
Exchange.
Continuing previous session
drubbing, Indian rupee ended significantly weaker against dollar on emergence
of demand for the greenback from importers amid muted trend in domestic
equities, consistent foreign fund outflows and risk-averse sentiments weighed
on the local unit. Nervousness ahead of the US Fed outcome and increasing
warning calls by the World Health Organisation (WHO) against the Omicron
coronavirus variant, which is now spreading faster than the Delta variant, is
keeping investors on the sidelines. Sentiments were also fragile as the Asian
Development Bank (ADB) for the second time in three months scaled down India's
growth estimate for the fiscal year ending March 2022 due to supply chain issue
of industries. On the global front, dollar held firm on Wednesday, with
currency markets quiet as investors waited to see if the U.S. Federal Reserve
would reinforce market expectations for rate hikes next year. Finally, the
rupee ended 76.32 (Provisional), weaker by 44 paise from its previous close of
75.88 on Tuesday.
The FIIs as per Wednesday's data
were net sellers in both equity and debt segments. In equity segment, the gross
buying was of Rs 9504.84 crore against gross selling of Rs 9535.89 crore, while
in the debt segment, the gross purchase was of Rs 554.27 crore against gross
selling of Rs 1277.90 crore. Besides, in the hybrid segment, the gross buying
was of Rs 7.24 crore against gross selling of Rs 4.64 crore.
The US markets ended higher on
Wednesday after Federal approved plans to more quickly wind down pandemic
stimulus efforts. Asian markets are trading mostly in green on Thursday tracked
Wall Street higher after the Fed said it would end its pandemic-era bond buys
in March and make way for three interest rate hikes next year to tackle
inflation. Indian markets extended losses to the fourth session in a row on
Wednesday, amid concerns about the Omicron variant of COVID-19. Today, markets
are likely to start the session on a positive note mirroring broadly positive
cues. Traders will be taking encouragement with a private report showing that
the New Year will herald the return of normalcy and witness the growth momentum
gaining steam, and pegged the real GDP growth estimate at 8.2 per cent for
FY2022-23. Some support will come as preliminary data of the commerce ministry
showed that India's exports rose 44.41 per cent to $16.46 billion year-on-year
during December 1-14, 2021. Imports too grew 42.57 per cent to $27.53 billion
during the period under review. Meanwhile, union minister Nitin Gadkari said
the government is working on a scheme to raise funds from the public at 6 per
cent annual interest rate for road infrastructure projects. However, there will
be some cautiousness as the state of the economy report released with the
December bulletin of the Reserve Bank of India (RBI) showed that the Indian
economy continues to forge ahead, emerging out of shackles of pandemic, but the
rise of the Omicron variant has emerged as the biggest risk factor. Also, IMF
Chief Economist Gita Gopinath said that as the global economy recovers from the
pandemic, a great deal of uncertainty remains about new COVID-19 variants and
increased inflation pressures in many countries. There will be some buzz in
banking stocks as the Reserve Bank of India (RBI) will introduce revised norms
for banks for setting aside capital for operational risks from April 01, 2023,
to ensure robustness in working of banking entities. Auto stocks will be in
focus as I&B Minister Anurag Thakur said the Union Cabinet approved a
production linked incentive (PLI) scheme for semiconductor and display board
production in the country. There will be some reaction in power sector stocks
as the government said India's installed nuclear power capacity has grown from
4,780 MW to 6,780 MW, an increase of over 40 per cent, in the last seven years.
Passenger vehicles industry stocks will be in limelight as ratings agency ICRA
revised downwards growth forecast for the domestic passenger vehicles industry
to 8-11 per cent in the ongoing fiscal from the earlier estimate of 14-17 per
cent on account of the ongoing semiconductor shortage. Besides, Supriya
Lifescience IPO will open for subscription today and will close on December 20.
The company plans to raise up to Rs 700 crore by way of fresh issue of shares
worth Rs 200 crore and offer for sale worth Rs 500 crore.
Support and Resistance: NSE (Nifty) and BSE
(Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
17,221.40
|
17,224.34
|
17,219.94
|
BSE Sensex
|
57,788.03
|
57,788.03
|
57,788.03
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ITC
|
346.53
|
223.95
|
220.84
|
229.64
|
Tata
Motors
|
162.63
|
489.80
|
485.46
|
495.91
|
Indian
oil Corporation
|
119.57
|
115.65
|
114.64
|
117.54
|
NTPC
|
119.16
|
126.55
|
125.49
|
128.04
|
Power
Grid Corporation of India
|
114.05
|
208.15
|
205.41
|
213.26
|
L&T's construction arm -- L&T construction has secured a repeat order for its Water and Effluent Treatment Business from the SWSM, Uttar Pradesh.
Tata Motors has tied up with Bandhan Bank for retail finance for its range of passenger vehicles.
HDFC has invoked 50 lakh shares pledged by Ansal Housing to recover its dues from the company.
SBI has received executive committee of central board's approval to offload a 6% stake in its mutual fund subsidiary SBI Funds Management through IPO.