Indian equity benchmarks erased
all of their initial gains and ended lower on Monday on fag-end selling amid
weakness in Asian markets. After making a positive start, the markets gained
some traction and oscillated in a narrow range for most part of the day, as
traders got support after provisional data from the NSE showed Foreign
institutional investors (FIIs) net bought shares worth Rs 70.69 crore on
February 2. Some support also came in as the Reserve Bank of India (RBI) said
India's forex reserves increased $591 million to $616.733 billion for the week
ended January 26. Some support also came
as CRISIL's latest report stated that the Indian economy is expected to grow at
an average rate of 6.7% per annum until the end of the decade. The economy will
grow at this rate between the financial years 2024 to 2031, a notch above the
pre-pandemic average of 6.6%. According to CRISIL, the key contributor to this
trend will be capital. Markets managed to trade in green in afternoon deals, as
India's services activity rose at the sharpest rate of expansion in January
2024. The HSBC India Services PMI came in at 61.8 in January, up from 59 in
December. It is the highest since July 2023 when the PMI was 62.3. A reading
above 50 shows that the sector is expanding. Some optimism also came as senior
government officials and industry players have discussed ways to enhance
collaborations and create a clear action plan for successful implementation of
PLI schemes. However, a sharp dip in the final hour pushed the indices lower.
Traders took a note of the Department of Investment and Public Asset Management
(DIPAM) Secretary Tuhin Kanta Pandey's statement that the central government
and Central Public Sector Enterprises (CPSEs) are estimated to monetise assets
worth Rs 1.50 trillion in the current fiscal (FY24), a tad lower than the
targeted of Rs 1.75 trillion. Finally, the BSE Sensex fell 354.21 points or
0.49% to 71,731.42 and the CNX Nifty was down by 82.10 points or 0.38% to
21,771.70.
The US markets ended lower on
Monday as some traders looked to cash in on the rally seen to close out the
previous week amid fading optimism about the likelihood the Federal Reserve
will cut interest rates in March. Fed Chair Jerome Powell reiterated the
central bank is unlikely to cut interest rates next month. Powell suggested the
strength of the US economy even amidst elevated rates will allow the Fed to
proceed carefully. However, selling pressure waned over the course of the
session as traders once again saw the pullback as a buying opportunity about
general optimism about the outlook for the markets. on the sectoral font,
Despite the recovery attempt by the broader markets, airline stocks finished
the day sharply lower, dragging the NYSE Arca Gold Bugs Index down by 2.9
percent. Substantial weakness also remained visible among gold stocks, as
reflected by the 2.1 percent slump by the NYSE Arca Gold Bugs Index. The
Institute for Supply Management (ISM) released a report showing U.S. service
sector growth accelerated by more than expected in the month of January. The
ISM said its services PMI climbed to 53.4 in January from a downwardly revised
50.5 in December, with a reading above 50 indicating growth in the sector.
Street had expected the index to rise to 52.0 from the 50.6 originally reported
for the previous month. The bigger than expected increase by the headline index
was partly due to an acceleration in the pace of new orders growth, with the
new orders index rising to 55.0 in January from 52.8 in December. The report
also showed a significant turnaround in employment in the service sector, as
the employment index jumped to 50.5 in January from 43.8 in December.
Crude oil futures ended higher on
Monday as concerns about potential trade and supply disruptions after a series
of retaliatory strikes on Iran-backed militants this weekend by a coalition led
by the U.S. and U.K. However, the dollar gained in strength amid fading hopes
of an early interest rate cut by the Federal Reserve following recent buoyant
economic data, and Fed Chair Jerome Powell's comments that a rate cut is
unlikely by March. Benchmark crude oil futures for March delivery gained $0.50
or about 0.7% to settle at $72.78 a barrel on the New York Mercantile Exchange.
Brent crude for April delivery rose $0.66 or about 0.90% to $77.99 per barrel
on London's Intercontinental Exchange.
Indian rupee ended lower on
Monday as strengthening American currency overseas and negative sentiment in
the domestic equity markets weighed on the local unit. However, the downward
trend in the global crude oil prices supported the domestic unit and restricted
its decline. Traders overlooked report that India's services activity rose at
the sharpest rate of expansion in January 2024. The HSBC India Services PMI
came in at 61.8 in January, up from 59 in December. It is the highest since
July 2023 when the PMI was 62.3. A reading above 50 shows that the sector is
expanding. On the global front, the pound fell to its lowest since mid-December
on Monday after a very strong U.S. jobs report and comments from Federal
Reserve Chair Jerome Powell combined to boost the dollar. Finally, the rupee
ended at 83.03 (Provisional), weaker by 5 paise from its previous close of
82.98 on Friday.
The FIIs as per Monday's data
were net buyers in both equity and debt segment. In equity segment, the gross
buying was of Rs 15613.80 crore against gross selling of Rs 15385.32 crore,
while in the debt segment, the gross purchase was of Rs 5307.30 crore with
gross sales of Rs 2406.91 crore. Besides, in the hybrid segment, the gross
buying was of Rs 20.50 crore against gross selling of Rs 19.03 crore.
The US markets ended lower on
Monday after Federal Reserve Chair Jerome Powell pushed back firmly against
speculation that rate cuts would be imminent, while investors assessed a mixed
bag of U.S. earnings reports. Asian markets are trading mixed on Tuesday ahead
of the Bank of Australia's interest rate decision later in the day. Indian
markets ended lower with significant losses on Monday, after trading in green
terrain for most part of the day, as late hour selling mainly played spoil
sport for domestic indices amid weak global cues. Today, markets are likely to
get a cautious start amid weakness in global peers. Spike in the US 10-year
yields likely to dampen sentiments in the markets. All eyes will be on the
three-day monetary policy meeting of the Reserve Bank of India which will start
today. There will be some cautiousness as global ratings agency Fitch said the
fiscal deficit target of 4.5% of gross domestic product in FY26 would be a
challenge for the government amidst a focus on capex to support growth. Fitch
projects the Indian economy to grow 6.5% in FY25, helped by 11% growth in
government capex. However, Foreign fund inflows likely to aid sentiments.
Foreign institutional investors (FIIs) net bought shares worth Rs 518.88 crore
on February 5, provisional data from the NSE showed. Some support will come as
the Organization for Economic Co-operation and Development (OECD), in its
latest interim economic outlook, raised India's growth outlook for 2024-25
(FY25) to 6.2 per cent from the 6.1 per cent estimated earlier in its November
outlook. It said the emerging-market (EM) economies have generally continued to
grow at a solid pace, despite tighter financial conditions, reflecting the
benefits of improved macroeconomic policy frameworks, strong investment in
infrastructure in many countries, including India, and steady employment gains.
Also, the OECD raised its 2024 world economic growth forecast but warned that
the Middle East conflict posed a risk, with disruptions in Red Sea shipping
threatening to increase consumer prices. Banking stocks will be in focus as
S&P Global Ratings said strong credit growth of Indian banks could moderate
to 12-14 per cent in the next fiscal if deposit growth remains tepid. It added
rising cost of funds and potential rate cuts in fiscal 2025 will squeeze net
interest margins. Meanwhile, BLS E-Services shares will list on the bourses
today. Moreover, investors will continue to keep close eye on earnings of many
companies for more directional cues.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE
Nifty
|
21,771.70
|
21,677.66
|
21,915.01
|
BSE
Sensex
|
71,731.42
|
71,427.07
|
72,210.86
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata
Steel
|
807.38
|
141.60
|
139.51
|
143.51
|
Tata
Motors
|
386.87
|
929.75
|
913.40
|
948.05
|
ONGC
|
340.02
|
263.50
|
256.39
|
269.34
|
Coal
India
|
314.19
|
441.30
|
422.26
|
455.16
|
State
Bank of India
|
283.40
|
643.00
|
636.24
|
652.29
|
- Tata Motors has started working
on its gigafactory in Somerset in the UK, and the financial closure for the
project is underway.
- Bajaj Finance has entered into a
Securities Subscription Agreement /Shareholders' Agreement on February 2, 2024
to acquire 7% stake (fully diluted basis) in RMBS Development Company.
- Eicher Motors and Volvo Group's
JV company -- VECV has forayed into the small commercial vehicle segment with
the global unveiling of the first product at the Bharat Mobility Global Expo
2024.
- Bharti Airtel has launched
thirty-four new, next-gen Company owned stores in the city of Kolkata.