Indian equity
benchmarks closed over half a percent lower but off Friday's intra-day lows, extending
the sell-off for the fourth day. The benchmark indices opened on a sharply
negative note in tandem with the weak sentiment across the global markets.
Traders remained cautious as the government data showed that retail inflation
for farm and rural workers rose to 4.78 percent and 5.03 percent respectively
in December 2021, mainly due to higher price of certain food items. Some
concern also came with domestic rating agency ICRA's report stated that the
recent surge in fresh Covid infections as well as subsequent localised
lockdowns emanating from Omicron spread are likely to shave off around 100 bps
of growth in toll collections in fiscal year 2021-22. However, the key indices
made a sharp recovery in afternoon trade, as traders took some solace after the
payroll data of the Employees' Provident Fund Organization (EPFO) showed at
least 8,27, 979 people joined formal work for the first time in November,
showing a marginal uptick in the formal sector job creation over the month-ago
period. Adding some optimism, with a view to boost economic activities slowed
down due to the impact of COVID-19, the Finance Ministry has relaxed spending
norms for the fourth quarter in a bid to spur capital expenditure. But, key
gauges failed to hold recovery and ended lower, as some anxiety remained among
traders with a private report stated that institutional investments in real
estate fell 81 per cent at $670 million during the December quarter because of
lower inflow in office assets. Besides, persistent selling by FIIs weighted
down on the markets. As per provisional data available on NSE, Foreign
institutional investors (FIIs) sold shares worth Rs 4,679.84 crore on January
20. Finally, the BSE Sensex fell 427.44 points or 0.72% to 59,037.18 and the
CNX Nifty was down by 139.85 points or 0.79% to 17,617.15.
The US markets ended
significantly lower on Friday with Nasdaq falling around 3 per cent amid weak
earnings report from Netflix, which set off a cascade of selling pressure among
the other markets. Surging bond prices also drove the markets lower,
exacerbating interest rate concerns; most of the market participants believe a
rate hike of at least 25 basis points from the FOMC is imminent in March. Also
on Friday, Treasury Secretary Janet Yellen offered her view that U.S. economic
policy improves on Reagan-era supply-side economics. Yellen said Modern supply-side
economics seeks to spur economic growth by both boosting labor supply and
raising productivity, while reducing inequality and environmental damage. On
the economic front, the Conference Board's leading economic index ticked
slightly higher and was in line with expectations. A gauge of future U.S.
economic activity increased solidly in December, suggesting the expansion would
continue despite challenges from the COVID-19 pandemic and anticipated interest
rate increases from the Federal Reserve to tame high inflation. The Conference
Board said its Leading Economic Index rose 0.8% last month after advancing 0.7%
in November. The Conference Board estimated that gross domestic product growth
would slow to a 2.2% annualized rate in the first quarter. It is forecasting
growth of 3.5% this year.
Extending their losses for second
straight session, crude oil futures ended lower on Friday although they came up
from session lows. Investors turned to profit booking after data showed a
build-up in U.S. crude and fuel inventories. The Energy Information
Administration (EIA) reported on Thursday that U.S. crude inventories rose by
515,000 barrels for the week ended Jan. 14. According to a poll conducted by
S&P Global Platts, market participants had forecast a fall of 700,000
barrels. The report showed gasoline inventories in the United States, the world's
biggest oil consumer, rose by 5.9 million barrels to their highest since
February 2021. The EIA also reported a slight decline in refinery runs,
indicating lower demand for crude. Benchmark crude oil futures for February
delivery fell 41 cents or 0.5 percent to settle at $85.14 a barrel on the New
York Mercantile Exchange. Brent crude for March delivery lost 49 cents or
nearly 0.6 percent to settle at $87.89 a barrel on London's Intercontinental
Exchange.
Indian rupee ended higher against
the American currency on Friday, due to selling of the US currency by exporters
and banks. Traders took some solace as India is inching toward a major
milestone by opening its $1 trillion government bond market to more
international investors, one of the most ambitious attempts to attract foreign
inflows since the country liberalized its economy three decades ago. However,
upside remain capped as government's data showed that retail inflation for farm
and rural workers rose to 4.78 percent and 5.03 percent respectively in
December 2021, mainly due to higher price of certain food items. On the global
front, dollar was on track for its best week in a month against major rivals on
Friday, as the world's reserve currency held its ground amid a selloff of
riskier assets across markets. Finally, the rupee ended 74.43 (Provisional),
stronger by 8 paise from its previous close of 74.51 on Thursday.
The FIIs as per Friday'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 7972.05 crore against gross
selling of Rs 12566.53 crore, while in the debt segment, the gross purchase was
of Rs 632.45 crore with gross sales of Rs 589.46 crore. Besides, in the hybrid
segment, the gross buying was of Rs 3.00 crore against gross selling of Rs 9.99
crore.
The US markets ended lower on
Friday with Nasdaq posting its biggest weekly loss since March 2020 amid
inflation concerns and fears of monetary tightening. Asian markets are trading
in red on Monday with the Federal Reserve expected to confirm it will soon
start draining the massive liquidity that has fuelled the huge gains in growth
stocks in recent years. Indian markets ended a volatile session lower on
Friday, extending losses to a fourth straight day. Weakness across most
sectors, with IT, financial and metal stocks being the worst hit, pulled the
headline indices lower. Today, the markets are likely to continue their
sluggish trend with gap-down opening tracking weak global cues. Continued
selling by foreign institutional investors (FIIs) is likely to weight on
domestic markets, as per provisional data available on the NSE, FIIs net sold
shares worth Rs 3,148.58 crore. There will be some cautiousness as former RBI
Governor Raghuram Rajan said the Indian economy has some bright spots and a
number of very dark stains and the government should target its spending
carefully so that there are no huge deficits. Rajan also said the government
needs to do more to prevent a K-shaped recovery of the economy hit by the
coronavirus pandemic. However, some support may come later in the day as DGFT
official Amiya Chandra said India has set up a target of $500 billion exports
for the 2022-23 fiscal, contending that the COVID-19 pandemic has taught the
country to reimagine world trade. In December 2021, exports stood at $37.8
billion, the highest-ever for any month. Besides, the Services Export Promotion
Council (SEPC) looks to set an export target of $300 billion for 2022-23 as it
expects resumption of regular international travels and other business
activities in the coming time. Gem and jewellery industry stocks will be in
focus as the Gem and Jewellery Export Promotion Council said India's gem and
jewellery exports during December 2021 grew 29.49 per cent to $3,040.92 million
(Rs 22,914.6 crore) as compared to $2,348.44 million (Rs 16,712.46 crore) in
December 2019 -- the pre-pandemic year. There will be some reaction in
infrastructure industry stocks with report that as many as 445 infrastructure
projects, each entailing investment of Rs 150 crore or more, have been hit by
cost overruns totalling more than Rs 4.4 lakh crore. The Ministry of Statistics
and Programme Implementation monitors infrastructure projects of Rs 150 crore
and above. Aviation industry stocks will be in limelight as Icra in its report
stated that hit by the third wave of the pandemic that led to massive
cancellations of domestic flights and extension of the ban on scheduled
international flights till the end of the next month, the airports are set to
see a 10-percentage-point fall in their revenue recovery this fiscal to 52 per
cent of the pre-pandemic level. Investors awaited more of quarterly earnings
from India Inc for cues.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,617.15
|
17,499.46
|
17,721.21
|
BSE
Sensex
|
59,037.18
|
58,662.19
|
59,370.89
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Power Grid Corporation of India
|
221.32
|
214.70
|
212.05
|
218.30
|
Tata Motors
|
179.46
|
504.85
|
494.79
|
514.39
|
State Bank of India
|
169.47
|
504.05
|
498.86
|
508.36
|
ITC
|
165.86
|
217.30
|
215.36
|
219.86
|
Coal India
|
144.66
|
158.95
|
156.54
|
162.34
|
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