Earnings optimism and positive
global cues fuelled a broad-based rally in the markets with Sensex and Nifty
settling around one and half percent higher each on Friday. Benchmarks made
gap-up opening, as sentiments got boost with report that India in 2020 has been
one of the biggest and fastest-growing technology markets in the world. Digital
and technology adoption in India has been increasing at a steady rate over the
last few years, and the current COVID-19 pandemic has accelerated the rate of
technology adoption across sectors, including in high involvement services such
as education and healthcare. Some optimism also came with report that the RBI
will conduct simultaneous purchase and sale of government securities under Open
Market Operations (OMO) for Rs 10,000 crore each on January 14. The decision
was taken after a review of current liquidity and financial conditions. Markets
extended gains in late afternoon session to end at record high levels, taking
support from report indicated that job listings continued to improve in
December with industries including telecom, agro-based units, and media and
entertainment returning to the pre-COVID-19 levels. Some support also came as
the Central Board of Indirect Taxes & Customs (CBIC) has introduced
liberalised Authorised Economic Operator package for micro, small and medium
enterprises (MSMEs) for swift customs clearances. In order to attract MSMEs to
become Authorised Economic Operators (AEOs) and avail various benefits, the
CBIC has relaxed the compliance criteria provided the MSMEs have a valid
certificate from their line-ministry. Market participants overlooked the
government report that India's economy is set for its biggest annual
contraction in records going back to 1952 as the rapid spread of coronavirus
cases and measures to contain them hurt businesses and households. The
statistics ministry in its first advance estimate said gross domestic product
will shrink 7.7% in the financial year ending March 2021. Finally, the BSE
Sensex rose 689.19 points or 1.43% to 48,782.51, while the CNX Nifty was up by
209.90 points or 1.48% to 14,347.25.
The US markets ended higher with
notable gains on Friday amid optimism that a Democrat-controlled government
will lead to more fiscal stimulus and a better handling of the coronavirus
vaccine rollout. In a statement on Thursday, President Donald Trump finally
acknowledged a new administration will be inaugurated on January 20th, although
he declined to mention President-elect Joe Biden by name. Trump has repeatedly
refused to accept the outcome of the election, spouting fraudulent claims of
widespread voter fraud that inspired his supporters to assault the US Capitol
building on Wednesday. Traders seem hopeful for a return to normalcy, as
Democrats will control both houses of congress and the White House but do not
have the margin in the Senate to force through radical legislation. Traders
were also reacting to a closely watched Labor Department report showing an
unexpected decrease in US employment in the month of December. The Labor
Department said non-farm payroll employment fell by 140,000 jobs in December
after climbing by an upwardly revised 336,000 jobs in November. The decline
surprised market participants, who had expected employment to increase by about
71,000 jobs compared to the addition of 245,000 jobs originally reported for
the previous month. Employment decreased for the first time since April as the
recent surge in coronavirus cases led to a nosedive in employment in the
leisure and hospitality sector, which lost 498,000 jobs.
Crude oil futures ended
significantly higher on Friday, as recent data showing a drop in US crude
stockpiles, and Saudi Arabia's decision to cut output continued to support the
commodity. Data released by Baker Hughes said the oil drilling rigs count in
the US rose for a seventh straight week, surging up by 8 to 275 this week.
Earlier this week, Saudi Arabia made a surprise announcement, saying it would
reduce crude output by 1 million barrels a day in February and March. This
significantly offset OPEC+ decision to allow Russia and Kazakhstan to increase
their outputs by a combined 75,000 barrels a day. Crude oil futures for
February rose $1.41 or 2.8 percent to settle at $52.24 a barrel on the New York
Mercantile Exchange. March Brent crude gained $1.61 or 3 percent to settle at
$55.99 a barrel on London's Intercontinental Exchange.
Reversing prevision session
losses, Indian rupee ended stronger against dollar on Friday due to fresh
selling of the American currency by banks and exporters. Traders took support
as CBIC introduced liberalised Authorised Economic Operator package for MSMEs
for swift customs clearances. In order to attract MSMEs to become Authorised
Economic Operators and avail various benefits, the CBIC has relaxed the compliance
criteria provided the MSMEs have a valid certificate from their line-ministry.
Firm trade in Indian markets also supported the upside of the rupee. On the
global front, dollar held above a 2018 low against other major currencies on
Friday ahead of fresh US jobs data likely to give clues on the extent of fiscal
stimulus needed to prop up the coronavirus-hit economy. Finally, the rupee
ended at 73.24, 7 paise stronger from its previous close of 73.31 on Thursday.
The FIIs as per Friday's data
were net buyer in equity segment, while net seller in debt segment. In equity
segment, the gross buying was of Rs 8599.75 crore against gross selling of Rs
7797.24 crore, while in the debt segment, the gross purchase was of Rs 340.50
crore with gross sales of Rs 1403.15 crore. Besides, in the hybrid segment, the
gross buying was of Rs 10.76 crore against gross selling of Rs 18.13 crore.
The US markets ended higher on
Friday as hopes of more stimulus from Washington were shaken a bit by a
senator's comments but later bolstered after US President-elect Joe Biden said
his economic package will be in the trillions of dollars. Asian markets are
trading mostly in green on Monday as trillions in new US fiscal stimulus plans
were set to be unveiled this week, stoking a global reflation trade. Indian
markets rallied more than 1 percent to end at record high levels on Friday on
the back of robust buying in IT and auto stocks. Today, the start of new week
is likely to be positive taking lead from other Asian peers. Traders will be
taking 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. Also, IHS Markit
said Indian economy is likely to rebound with an 8.9 per cent growth in the
fiscal year beginning April 2021 after economic activity showed significant
improvement in the last quarter. Some support may come with 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. Besides, 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. Traders may take note of report that India continues
to show a downward trend in the new number of coronavirus cases. With tally at
10,467,431, it accounts for the 2nd highest cases of Covid-19 infections
globally. Insurance industry stocks will be in limelight with report that the
life insurance industry saw a 2.7 per cent contraction in premium collection in
December, a second consecutive month of decline. There will be some buzz in oil
& gas sector stocks with ratings agency ICRA in its latest report stating
that the domestic demand for petroleum products is expected to increase at a
healthy rate of 8 to 10 per cent in FY22 on a year-on-year basis. Banking
stocks will be in focus as the Reserve Bank of India (RBI) expressed some
concerns over zero-coupon bonds for the recapitalisation of public sector banks
(PSBs) and discussion is on between the central bank and Finance Ministry to
find a solution. There will be some reaction in coal industry stocks with a
private report stating that India's coal import declined by 17 per cent to
137.16 million tonne (MT) in the April-November period of the current fiscal. There
will be some result reactions too, to keep the markets in action.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
14,347.25
|
14,256.84
|
14,402.49
|
BSE
Sensex
|
48,782.51
|
48,480.62
|
48,969.38
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
ITC
|
564.27
|
201.50
|
199.16
|
204.91
|
Tata
Motors
|
539.92
|
198.15
|
196.34
|
200.74
|
NTPC
|
432.41
|
100.15
|
98.16
|
101.31
|
Wipro
|
409.93
|
430.20
|
414.09
|
439.49
|
Oil
& Natural Gas Corporation
|
360.22
|
100.65
|
99.04
|
101.79
|
ONGC has approved the offer and issuance of unsecured, listed, redeemable, non-cumulative, taxable, NCDs worth Rs 1,500 crore on a private placement basis.
SBI and Indian Oil Corporation have launched a co-branded contactless RuPay debit card.
Tata Motors has launched its newest smart compact truck, the Tata Intra V20, in Nepal, in association with its sole authorised distributor for the country, Sipradi Trading.
Wipro has signed a Memorandum of Understanding with Israel's Tel Aviv University for research and analysis in quantum science and technology.