Indian equity
benchmarks ended in the red for a fifth straight session on Monday, with Realty
and Metal stocks dragging the most, as investor worries ballooned over
possibilities of a quicker rate hike from the U.S. Federal Reserve. The
benchmark indices started trade on a lower note, as continued selling by
foreign institutional investors (FIIs) weighted on domestic markets. As per
provisional data available on the NSE, FIIs net sold shares worth Rs 3,148.58
crore. Some cautiousness came in 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. Sentiments remained
down-beat with the Ministry of Statistics and Programme Implementation in its
latest report has said 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. It said reasons for time overruns as
reported by various project implementing agencies include delay in land
acquisition, delay in obtaining forest and environment clearances, and lack of
infrastructure support and linkages. Key indices continued to reel under the
selling pressure in second half of trading session, as nervousness ahead of the
upcoming Budget announcements were weighing on the investment sentiment.
Traders also got cautious, with a survey done by a consultancy firm has
revealed that India Inc is staring at an ''integrity crisis'' in the second
year of the pandemic. Traders overlooked the Services Export Promotion
Council's (SEPC) statement that it 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. Market participants also paid
no heed towards the commerce and industry minister Piyush Goyal's statement
that a year 2022 will be the breakthrough year which will unlock the country's
exponential value. He noted that services export has reached more than $178
billion in April-December 2021 despite the Covid-19 pandemic when the Travel,
Hospitality & Tourism sectors were significantly down. Finally, the BSE
Sensex fell 1545.67 points or 2.62% to 57,491.51 and the CNX Nifty was down by
468.05 points or 2.66% to 17,149.10.
The US markets ended in green on
Monday, after early sell-off, as traders went bargain hunting following recent
weakness on markets. However, concerns about tightening monetary policy
continued to weigh on the markets early in the session ahead of this week's
Federal Reserve meeting. The Fed is scheduled to begin a two-day meeting on
Tuesday, with the latest monetary policy decision due Wednesday. While the Fed
is likely to leave interest rates unchanged, the accompanying statement could
hint at the first rate hike as early as the next meeting in mid-March. Along
with the Fed announcement, reports on consumer confidence, new home sales,
durable goods orders and personal income and spending may attract attention in
the coming days. On the sectoral front, housing stocks moved sharply higher
over the course of the trading session, driving the Philadelphia Housing Sector
Index up by 3.1 percent. The index rebounded strongly after hitting its lowest
intraday level in three months. Significant strength also emerged among oil
service stocks, as reflected by the 2.3 percent jump by the Philadelphia Oil
Service Index. The turnaround by the sector came even though the price of crude
oil for March delivery tumbled $1.83 to $83.31 a barrel. Retail, biotechnology
and telecom stocks also showed notable moves to the upside as the day progressed,
while weakness remained visible among pharmaceutical and utilities stocks.
Crude oil futures ended lower on
Monday amid rising fears the Federal Reserve might resort to aggressive
monetary tightening. The Fed's two-day monetary policy meeting is scheduled to
take place on Tuesday and Wednesday. The central bank is expected to hold rates
unchanged on Wednesday, but the accompanying statement could hint at the first
rate hike as early as the next meeting in mid-March. A firm dollar weighed on
oil prices. The dollar climbed to a two-week high amid rising tensions between
Russia and the West over Ukraine and on prospects about a hawkish stance from
the Federal Reserve. Benchmark crude oil futures for March delivery fell $1.83
or 2.2 percent to settle at $83.31 a barrel on the New York Mercantile
Exchange. Brent crude for March delivery dropped $1.62 or 1.8 percent to settle
at $86.27 a barrel on London's Intercontinental Exchange.
Snapping previous session gaining
streak, Indian rupee depreciated against dollar on Monday amid muted domestic
equities and elevated crude oil prices weighed on investors mood. Sentiments
were downbeat 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. On the global front, pound touched a
two-week low versus the dollar in early London trading on Monday, hurt by
investor caution brought on by falling stocks and tensions between Russia and
the West. Finally, the rupee ended 74.62 (Provisional), weaker by 19 paise from
its previous close of 74.43 on Friday.
The FIIs as per Monday's data
were net sellers in both equity and debt segment. In equity segment, the gross
buying was of Rs 7557.51 crore against gross selling of Rs 10632.53 crore,
while in the debt segment, the gross purchase was of Rs 1236.02 crore with
gross sales of Rs 1288.37 crore. Besides, in the hybrid segment, the gross
buying was of Rs 2.83 crore against gross selling of Rs 9.11 crore.
The US markets ended higher on
Monday with bargain hunters pushing the indexes into positive territory by
closing bell. Asian markets are trading in red on Tuesday amid nervousness
among investors about the situation in Ukraine and ahead of the outcome of the
Fed's scheduled policy review. Indian markets suffered their biggest single-day
percentage fall since November 26 on Monday, extending losses to the fifth
straight session. Today, markets are likely to start session on a negative
note, amid weakness across other Asian markets. Heavy selling by foreign
institutional investors (FIIs) is likely to weight on the markets. Traders will
be concerned as in the adverse case, ICRA projects fiscal deficit at a higher
Rs 17.9 trillion, driven by the two major outlays intended to bolster
confidence amongst households, namely free food grains under the PMGKAY scheme
and an enhanced outgo for MGNREGA. However, some respite may come later in the
day as the commerce ministry said exports of engineering goods rose 54 per cent
to $81.8 billion during April-December 2021-22 as compared to the same period
of the previous year. In the corresponding nine-month period of 2020-21,
exports stood at $52.9 billion. The sector accounted for over 27 per cent in
India's total exports basket during the period. Some support may also come as
Fitch Ratings said India's fuel demand will continue to recover through the
current quarter as the easing of Covid-19 pandemic-related restrictions boosts
economic activity. Traders may take note of a private report that digital
infrastructure sector needs investment of up to $23 billion by 2025, to support
the growing demand of digital services and rising online traffic. Meanwhile,
the Reserve Bank of India conducted an overnight variable rate repo auction
under liquidity adjustment facility (LAF) Monday for an amount of Rs 75,000
crore. The date of reversal is on January 25, 2022. Agriculture industry
related stocks will be in focus as the Union Food Ministry said the Centre has
procured 606.19 lakh tonne of paddy in the ongoing 2021-22 marketing season so
far, with maximum quantities being purchased from Punjab. There will be some
reaction in textile industry stocks as Icra ratings in its report stated that
Indian cotton spinners are likely to report double-digit revenue growth and
all-time high profits in 2021-22, mainly driven by high demand and
realisations. It added while the growth is primarily being led by all-time high
realisations, which have sustained for much of the year, volumes are also
estimated to be better than the pre-COVID levels.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
17,149.10
|
16,898.16
|
17,499.71
|
BSE
Sensex
|
57,491.51
|
56,642.35
|
58,682.31
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ICICI Bank
|
296.12
|
792.00
|
777.96
|
811.36
|
Oil & Natural Gas Corporation
|
287.83
|
165.00
|
163.06
|
167.61
|
Tata Motors
|
252.28
|
477.65
|
465.90
|
496.85
|
State Bank of India
|
202.33
|
493.70
|
485.54
|
504.34
|
ITC
|
173.54
|
211.65
|
209.11
|
215.96
|
ICICI Bank has reported 18.89% rise in its consolidated net profit at Rs 6,536.55 crore for Q3FY22 as compared to Rs 5,498.15 crore for Q3FY21.
Reliance Industries' telecom arm -- Jio Infocomm has completed 5G network coverage planning for top 1,000 cities in the country.
HDFC's wholly-owned subsidiary -- HDFC Capital has achieved the initial close of its third fund of $1.88 billion (about Rs 13,500 crore) focused on affordable housing.
TCS is aiming for a high double-digit growth in revenues from Canada in the next few years.