Extending their record braking
rally for third consecutive day, Indian equity benchmarks ended the Tuesday's
trade above their crucial 49,500 (Sensex) and 14,550 (Nifty) levels. Markets
made a pessimistic start as traders remained concerned after the Reserve Bank
of India (RBI) warned that the Indian banking system's bad loans may rise to a
two-decade high on the back of COVID-19 induced stress. In its latest Financial
Stability Report (FSR), the RBI said Public Sector Banks (PSBs) may see gross
NPAs rise from 9.7 percent in September 2020 to 16.2 percent by September 2021.
Sentiments also remain dampened as the finance ministry has rejected the demand
for further extension of the last date for income tax return (ITR) filing
beyond February 15 for the ones where audit is required. In December 2020, the
government extended the ITR filing deadline for individuals till January 10 and
till February 15 for companies. However, markets gained traction in noon deals
and turned positive as ICRA projected that India's GDP will record a
double-digit expansion of 10.1 percent in the upcoming fiscal year. It also
expects the monetary policy to be changed to neutral from accommodative in the
August 2021 Policy review or later. Markets extended gains to end near all-time
closing highs after the Ministry of Finance has released the 11th weekly
instalment of Rs 6,000 crore to the States. Out of this, an amount of Rs
5,516.60 crore has been released to 23 States and an amount of Rs 483.40 crore
has been released to the 3 Union Territories (UT) with Legislative Assembly
(Delhi, Jammu & Kashmir & Puducherry) who are members of the GST
Council. Finally, the BSE Sensex rose 247.79 points or 0.50% to 49,517.11,
while the CNX Nifty was up by 78.70 points or 0.54% to 14,563.45.
The US markets ended marginally
higher on Tuesday as investors were responding to the rollout of COVID-19
vaccines and remedies. Optimism about another big fiscal stimulus also pushed
up prices. Intel, General Electric, DuPont, Travelers Companies, Goldman Sachs
and Caterpillar gained 2 to 3.5 percent. Home Depot, JP Morgan Chase, Chevron
and Walmart also ended notably higher. However, the political tensions in the
US, and worries about rising coronavirus cases weighed on stocks. Investors
were also looking ahead to quarterly earnings reports. On the political front,
articles of impeachment against US President Donald Trump are under way in the
House. Trump warned that it was dangerous to the United States for him to be
impeached. He also claimed his inflammatory comments at a rally shortly before
the outbreak of violence in the halls of Congress, which lead to four deaths,
were not harmful. People thought what I said was totally appropriate, Trump
said when he was asked what his personal responsibility was for the violence.
The riot happened after Trump and his family members urged supporters at a
rally to fight with him to reverse Joe Biden's Electoral College win.
Crude oil futures ended higher on
Tuesday, lifting the most actively traded oil futures contract to their best
close in about 11 months. A weak dollar and Saudi Arabia's decision to cut
production in the next two months supported the commodity. Saudi Arabia said
last week that it has decided to cut production by 1 million barrels a day in
February and March. Crude oil futures for February rose 96 cents or 1.8 percent
to settle at $53.21 a barrel on the New York Mercantile Exchange. March Brent
crude surged 92 cents or 1.7 percent to settle at $56.58 a barrel on London's
Intercontinental Exchange.
Indian rupee ended substantially
stronger on fresh selling of American currency by banks and exporters. Besides,
healthy growth in the domestic equity market added to the rupee gains.
Sentiments were perked up as ICRA Ratings in its latest report states it
expects India's real gross domestic product (GDP) to grow by 10.1 per cent in
FY2022. However, it said the value of GDP in the next financial year will only
mildly surpass the level that had been recorded in FY2020. On the global front,
dollar edged higher across the board on Monday, extending a rebound from the
near three-year low hit last week, taking strength from the recent spike in
Treasury yields and the prospect of a growth boost from higher U.S. fiscal
stimulus. Finally, the rupee ended at 73.25, 15 paise stronger from its
previous close of 73.40 on Monday.
The FIIs as per Tuesday's data
were net buyer in equity segment and net seller in debt segment. In equity
segment, the gross buying was of Rs 9423.22 crore against gross selling of Rs
6483.34 crore, while in the debt segment, the gross purchase was of Rs 349.69
crore with gross sales of Rs 1843.31 crore. Besides, in the hybrid segment, the
gross buying was of Rs 12.48 crore against gross selling of Rs 15.03 crore.
The US markets ended higher on
Tuesday as markets bet on more government stimulus and coronavirus vaccines in
2021. Asian markets are trading mostly in green on Wednesday tracking modest
Wall Street gains as prospects of an eventual victory against coronavirus
shored up recovery hopes, while tight supply expectations pushed oil prices to
their highest in a year. Indian markets recovered from morning lows to end at
record close for the third straight session on Tuesday mainly led by a rally in
the PSU banks, auto and realty sectors. Today, the domestic markets are likely
to make flat-to-positive start tracking gains in global peers coupled with
easing inflation data. Traders will be getting encouragement with the
government data showing that Consumer Price Index (CPI)-based inflation eased
to 4.59 per cent in December 2020 compared to 6.93 per cent in November. Food
inflation declined to 3.41 per cent in December, compared to 9.5 per cent in
the previous month. Some supprot may also come with report that a mega
immunisation drive against Covid-19 has kicked off with nine flights
transporting over 5.6 million doses of the vaccine to 13 cities across the
country on Tuesday. Kerala will get the first consignment of over 400,000
coronavirus vaccines today. In the last 24 hours, India registered 14,898 fresh
Covid-19 cases, taking the tally to 10,494,811. traders may take note of that
the government said India's new Foreign Trade Policy, under formulation, will
come into effect from April 1, 2021 for five years and will strive to make the
country a leader in international trade. However, market participants may be
concerned with the Ministry of Statistics and Programme Implementation data
showing that the Index of Industrial Production (IIP) contracted by 1.9 per
cent in November as against 3.6 per cent growth in October. The manufacturing
sector output shrank by 1.7 per cent in November, while power generation grew
3.5 per cent. Mining output saw a decline of 7.3 per cent. There may be some
cautiousness with SBI Ecowrap report stating that India's fiscal deficit in the
current financial year is likely to reach 7.4 per cent of the GDP on the back
of enhanced government expenditure amid the pandemic. Meanwhile, the Union
cabinet is most likely to consider the proposal of mining sector reform for
enhancing private investment, in the meeting scheduled for January 13. There
will be some reaction hospitality industry stocks with ICRA's report that the
domestic hospitality industry, which has been severely affected by the COVID
-19 related disruptions, is likely to witness a decline of over 65 percent in
2020-21. However, there might be a recovery in demand in the later part of
financial year 2021-22 as vaccine rollouts gains traction. There will be some
important earnings announcements too to keep the markets buzzing.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
14,563.45
|
14,467.31
|
14,625.11
|
BSE
Sensex
|
49,517.11
|
49,208.08
|
49,697.65
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Motors
|
3,905.77
|
237.80
|
223.80
|
252.10
|
Gail
India
|
650.58
|
141.40
|
139.24
|
143.54
|
State
Bank of India
|
443.07
|
292.50
|
282.31
|
298.26
|
ITC
|
356.17
|
206.45
|
203.06
|
208.36
|
Indian
Oil Corporation
|
319.41
|
97.95
|
95.65
|
99.80
|
Bharti Airtel and National Small Industries Corporation have teamed up to drive the digital transformation of MSMEs in India.
Tata Motors' wholly owned subsidiary -- JLR has reported 9% Y-o-Y fall in retail sales at 128,469 vehicles for the quarter ending December 31, 2020 over the same period last year.
Dr. Reddy's Laboratories has got approval from the independent Data and Safety Monitoring Board for phase 3 trials of Russia's Sputnik V Covid-19 vaccine.
SBI and Mahindra Lifespace have signed a MoU to enable an improved and more seamless experience for homebuyers across India.