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NSE Intra-day chart (01 December 2022)
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Market Commentary 02 December 2022
Markets likely to open in red amid weak global cues

 

Extending gains for the eighth session in a row, Indian equity benchmarks continued to hit fresh record closing highs on Thursday in spite of some volatility due to weekly expiry day. Markets made positive start and stayed in green for whole day amid firm global market trends and continuous foreign fund inflows. Traders got encouragement as the government data showed that retail inflation for industrial workers rose to 6.08 per cent in October from 6.49 per cent in September 2022 mainly due to lower prices of certain food items. Some optimism came in as Chief Economic Advsior V Anantha Nageswaran said the Indian economy is on track to achieve a 6.8-7 per cent GDP growth in the current fiscal. He said the economic recovery momentum is continuing and the GDP is averaging the 2019-20 level. Sentiments remained up-beat after  a private survey showed India's factory activity expanded at its fastest pace in three months in November, signalling resilient demand despite deteriorating global economic conditions as input cost inflation fell to a two-year low. The Manufacturing Purchasing Managers' Index, compiled by S&P Global, rose to 55.7 last month compared with 55.3 in October, marking the seventeenth successive month of expansion in manufacturing production across India. Additional support came as investment in the Indian capital markets through participatory notes rose to Rs 97,784 crore at the end of October, the highest in a year. This was also the third consecutive monthly increase in investments through such a route. However, markets trimmed some gains in late afternoon deals as some concern came with data showing that growth in production by eight infrastructure industries, which comprise the core sector, slowed down sharply to a 20-month low of 0.1 per cent in October, owing to a high base effect and weak activity. Finally, the BSE Sensex rose 184.54 points or 0.29% to 63,284.19 and the CNX Nifty was up by 54.15 points or 0.29% to 18,812.50.

 

The US markets ended mostly in red on Thursday as investors awaited jobs data coming Friday that could determine the pace of the Federal Reserve's future rate tightening. Street currently expect employment to jump by 200,000 jobs in November after shooting up by 261,000 jobs in October, while the unemployment rate is expected to hold at 3.7 percent. The data could affect the outlook for interest rates, although the impact may be somewhat muted following Federal Reserve Chair Jerome Powell's remarks on Wednesday hinting at a slowdown in the pace of rate hikes as soon as next month. Cautiousness also prevailed in the markets as activity in the U.S. manufacturing sector contracted for the first time in over two years in the month of November, according to a report released by the Institute for Supply Management (ISM). The ISM said its manufacturing PMI slipped to 49.0 in November from 50.2 in October, with a reading below 50 indicating a contraction. Street had expected the index to edge down to 49.8. With the slightly bigger than expected decrease, the manufacturing PMI fell to its lowest level since hitting 43.5 in May of 2020. On the sectoral front, Most of the major sectors showed only modest moves on the day, contributing to the lackluster performance by the broader markets. Gold stocks showed a substantial move to the upside, however, driving the NYSE Arca Gold Bugs Index up by 3.6 percent to its best closing level in over five months. The rally by gold stocks came amid a sharp increase by the price of the precious metal, with gold for February delivery soaring $55.30 to $1,815.20 an ounce.

 

Crude oil futures ended higher on Thursday as China moved to ease some COVID-19 curbs.  Further, a weak dollar amid rising prospects of smaller rate hikes by the Fed also contributed to the increase in oil prices. The dollar drifted lower, extending losses from the previous session following Fed Chair Jerome Powell's comments indicating rate hikes could slow next month. However, Brent crude prices fell as traders awaited a weekend meeting of OPEC+ ministers. Benchmark crude oil futures for January delivery rose 67 cents or about 0.8 percent at $81.22 a barrel on the New York Mercantile Exchange. However, Brent crude for February delivery lost 9 cents or about 0.1 percent to settle at $86.88 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended higher against dollar on Thursday, on persistent selling of the American currency by exporters. Sentiments were upbeat after government data showed that retail inflation for industrial workers rose to 6.08 per cent in October from 6.49 per cent in September 2022 mainly due to lower prices of certain food items. Besides, India's factory activity expanded at its fastest pace in three months in November, signalling resilient demand despite deteriorating global economic conditions as input cost inflation fell to a two-year low. The Manufacturing Purchasing Managers' Index, compiled by S&P Global, rose to 55.7 last month compared with 55.3 in October, marking the seventeenth successive month of expansion in manufacturing production across India. On the global front, sterling rose to a near 16-week high against a broadly-soft dollar on Thursday, with currency traders looking past gloomy British manufacturing data for now. Finally, the rupee ended at 81.22 (Provisional), stronger by 8 paise from its previous close of 81.30 on Wednesday.

 

The FIIs as per Thursday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 39585.42 crore against gross selling of Rs 30672.77 crore, while in the debt segment, the gross purchase was of Rs 467.30 crore against gross selling of Rs 139.09 crore. Besides, in the hybrid segment, the gross buying was of Rs 47.23 crore against gross selling of Rs 15.25 crore.

 

The US markets ended mostly in red on Thursday as investors digested economic data following a big rally in the previous session. Asian markets are trading mostly lower on Friday following a near flat line close on Wall Street. Indian markets rallied for the eighth day running on Thursday, ending at fresh record closing highs, amid firm global market trends and continuous foreign fund inflows. Today, markets are likely to get negative start amid weakness in global markets. Traders will be concerned as data by the Centre for Monitoring Indian Economy (CMIE) showed that the country's unemployment rate rose to a three-month high at 8 per cent during November. The unemployment rate in urban India was higher at 8.96 per cent, while in rural areas, it was at 7.55 per cent. There will be some cautiousness as data from the central bank showed that India's services exports and imports in October fell from the previous month. Services exports in October stood at $25.38 billion, down from $28.03 billion in September. Services imports in October slipped to $13.49 billion from $16.12 billion a month earlier. Besides, foreign institutional investors (FIIs) net sold shares worth Rs 1,565.93 crore on December 01, according to the provisional data available on the NSE. However, some respite may come late in the day as Sanjeev Sanyal, a member of the prime minister's economic advisory council, said the Indian economy is likely to grow 6.5% to 7% next fiscal year if the global environment does not worsen. Some support may come as the Finance Ministry said Goods and Services Tax (GST) revenues rose by 11 per cent to about Rs 1.46 lakh crore in November over the year-ago period. This is the ninth straight month when collections from GST has remained above Rs 1.40 lakh crore. Aviation industry stocks will be in limelight as Jet fuel (ATF) price was reduced by 2.3 per cent, reflecting softening international oil prices but petrol and diesel rates remained on freeze for a record eighth month in running. There will be some buzz in power stocks as government data showed that India's power consumption logged a double-digit growth of 13.6 per cent to 112.81 billion units in November 2022 compared to the year-ago period. Oil & gas industry stocks will be in focus as preliminary industry data showed petrol and diesel sales in India saw a double-digit year-on-year growth in November as increased demand from the agriculture sector helped build on the momentum generated by the festive season. Separately, the government has slashed to less than half the windfall profit tax on domestically produced crude oil and also reduced the levy on diesel. There will be some reaction in solar industry related stocks with a private report that installation of open access solar capacity in India increased by 91 per cent to 596 megawatt (MW) during the July-September period.

 

Support and Resistance: NSE (Nifty) and BSE (Sensex)

 

Index

Previous close

Support

Resistance

NSE Nifty

18,812.50

18,764.60

18,874.00

BSE Sensex

63,284.19

63,117.61

63,516.91

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

917.02

110.55

108.60

111.90

Oil & Natural Gas Corporation

277.27

140.00

139.20

141.40

Coal India

224.35

226.30

224.00

229.50

ITC

166.30

339.70

337.10

342.00

ICICI Bank

159.20

939.45

931.46

952.21

 

  • Coal India's coal production has increased by 12.8% to 60.7 million tonnes in November 2022 as against 53.8 million tonnes in November 2021. 
  • Bajaj Auto has reported fall of 19% in total sales to 3,06,552 units in November 2022 as against 3,79,276 in the same month last year.  
  • L&T has successfully closed a three-year $107 million sustainability-linked loan from Sumitomo Mitsui Banking Corporation on November 30, 2022. 
  • Apollo Hospitals Enterprise has received approval to raise Rs 105 crore through issue of 7.70% - 1050 Unsecured, Redeemable, Listed, Rated NCDs face value of Rs 10 lakh each.
News Analysis