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NSE Intra-day chart (08 December 2021)
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Market Commentary 09 December 2021
Benchmarks likely to get positive start following global markets

 

Indian equity benchmarks staged a strong up move for second straight session on Wednesday after the Reserve Bank of India (RBI), as widely expected, held interest rates steady at all-time low and maintained its accommodative stance for as long as necessary to support growth. The benchmark indices started firm, as traders took encouragement with global rating agency S&P's statement that the impact of the new coronavirus variant on India's economic outlook would be contained. It expects India's economy to grow 9.5% in FY22 and 7.8% in FY23. Buying further crept in as Minister of State for Finance Bhagwat Karad said public sector banks (PSBs) recovered over Rs 4.18 lakh crore in the last three financial years from incidents pertaining to frauds and defaults. Also, the amount related to frauds of Rs 1 lakh and above has declined over the period. He added that the government has taken comprehensive steps to tackle defaults and to effect recovery from defaulters. Key indices extended gains to the day's high level in second half of the trading session, taking support from the Reserve Bank of India's statement that retail inflation is likely to ease to around 5 per cent next fiscal on the back of government measures to ease supplies, reduction in fuel prices as well as prospects of good crops. For the current fiscal year to be ending on March 31, 2022, retail inflation is expected to be around 5.3 per cent. Traders overlooked Fitch Ratings' report in which it has cut India's economic growth forecast to 8.4 per cent for the current fiscal year ending March 31, 2022, saying the rebound after the second wave of COVID infections has been subdued than expected. Fitch, which had previously forecast a GDP growth of 8.7 per cent in 2021-22 (April 2021 to March 2022), however, raised the economic growth projection for the next financial year (FY23) to 10.3 per cent from previously forecast 10 per cent. Finally, the BSE Sensex rose 1016.03 points or 1.76% to 58,649.68 and the CNX Nifty was up by 293.05 points or 1.71% to 17,469.75.

 

The US markets ended lackluster session higher on Wednesday as investors continued to bet the impact of the omicron variant of Covid-19 would not be as threatening as many previously thought. Some of the comeback was validated by vaccine news Wednesday. Pfizer and BioNTech said three doses of their vaccine are effective at neutralizing the omicron variant, citing their own preliminary lab tests. They also said two doses may still protect against severe disease. However, upside remained capped as traders expressed some uncertainty about the near-term outlook for the markets following recent volatility. A relatively quiet day on the US economic front also kept some traders on the sidelines ahead of the release of reports on weekly jobless claims, consumer prices and consumer sentiment in the coming days. On the sectoral front, significant strength was visible among tobacco stocks, as reflected by the 2.1 percent jump by the NYSE Arca Tobacco Index. Oil service stocks also turned in a strong performance on the day, resulting in a 1.7 percent gain by the Philadelphia Oil Service Index. The strength among oil service stocks came amid a modest increased by the price of crude oil, with crude for January delivery rising $0.31 to $72.36 a barrel.

 

Crude oil futures ended higher on Wednesday after data from Energy Information Administration (EIA) showed a drop in US crude inventories in the week ended December 3.Oil's gains were just modest as the decline in crude stockpiles, at 240,000 barrels, was much less than an expected drop of about 1.71 million barrels. On Tuesday, the American Petroleum Institute (API) reported crude inventories decreased by 3.1 million barrels in the week ending December 3. Meanwhile, Geopolitical tensions also remained on investors' radar amid rising tensions between the United States and Russia regarding Ukraine. Benchmark crude oil futures for January delivery rose $0.31 or 0.4 percent to settle at $72.36 a barrel on the New York Mercantile Exchange. Brent crude for February delivery gained $0.46 or 0.61 percent to settle at $75.90 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended marginally weaker against dollar on Wednesday on account of sustained dollar demand from importers and banks. Sentiments were impacted as Fitch Ratings cut India's economic growth forecast to 8.4 per cent for the current fiscal year ending March 31, 2022, saying the rebound after the second wave of COVID infections has been subdued than expected. However, a rally in the domestic equities and sliding crude prices in the international market restricted the rupee's fall. Meanwhile, the Reserve Bank of India's Monetary Policy Committee held repo rate at record low of 4 per cent and maintained accommodative policy stance to support growth for as long as necessary. On the global front, the dollar edged lower Wednesday amid growing risk appetite over indications that the Omicron Covid variant has relatively mild symptoms, and thus won't derail the global economic recovery. Finally, the rupee ended 75.50, weaker by 6 paise from its previous close of 75.44 on Tuesday.

 

The FIIs as per Wednesday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 7268.47 crore against gross selling of Rs 9379.68 crore, while in the debt segment, the gross purchase was of Rs 132.27 crore with gross sales of Rs 577.60 crore. Besides, in the hybrid segment, the gross buying was of Rs 14.00 crore against gross selling of Rs 70.40 crore.

 

The US markets ended higher on Wednesday amid encouraging vaccine news flow. Asian markets are trading mostly in green on Thursday tracking overnight gains on Wall Street. Indian markets rose sharply on Wednesday after the Reserve Bank of India left its key interest rates unchanged. Today, domestic equities may continue their rally for a third straight session with positive start amid receding Omicron concerns and firm global cues. Sentiments will get a boost with Pradeep Multani, President of PHD Chamber of Commerce and Industry's statement that the accommodative policy stance at this juncture would not only pave the way for a double digit GDP growth in the current year 2021-22, but will also help in creating a strong, sustainable and vibrant economy going forward. He also said that it is inspiring to note that the RBI has retained the projection for GDP growth at 9.5 per cent for 2021-22 despite the prevailing uncertainty caused by a new variant of Coronavirus. Traders will be taking encouragement as India's outbound goods shipments rose 44.24% year-on-year in the first week of December, led by a jump in exports of petroleum products, gems and jewellery and engineering goods. Merchandise exports were $8.5 billion during December 1-7. Traders may take note of report that Reserve Bank Governor Shaktikanta defended the central bank's more-than-anticipated dovish stance wherein the MPC unanimously voted to continue with an accommodative policy, saying our overarching policy focus and priority now is supporting growth amid the threat of a third wave of COVID-19 and the legroom a cooling inflation print offers. Meanwhile, Telecom Minister Ashwini Vaishnaw sought suggestions from industry stakeholders to usher in more reforms in the sector and place Indian regulatory framework at par with the best in the world. There will be some buzz in the infra stocks as the Union Cabinet approved the continuation of Pradhan Mantri Awaas Yojana (Rural) for another three years to provide financial assistance for the construction of the remaining 155.75 lakh houses under the scheme. Power stocks will be in focus as Union power minister R K Singh approved 23 new inter-state transmission system projects worth Rs 15,893 crore. The new inter-state transmission system (ISTS) projects comprise 13 projects with an estimated cost of Rs 14,766 crore to be developed under Tariff Based Competitive Bidding (TBCB) and 10 projects with an estimated cost of Rs 1,127 crore to be developed under Regulated Tariff Mechanism (RTM). There will be some reaction in telecom stocks as minister of state for communications Devusinh Chauhan said India will have indigenously designed and developed 5G network by the third quarter of 2022. Insurance industry stocks will be in limelight as data from Irdai showed the gross direct premium written by non-life insurance companies rose by 5.5 per cent to Rs 15,743.22 crore in November. C. E. Info Systems (MapmyIndia) IPO will open for subscription today. The company aims to raise up to Rs 1,040 crore by way of complete Offer for Sale of equity shares in the price band of Rs 1,000 - Rs 1,033.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,469.75

17,357.60

17,533.25

BSE Sensex

58,649.68

58,280.41

58,860.79

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ICICI Bank

334.32

753.55

745.50

760.20

Tata Motors

205.81

493.60

486.09

498.54

State Bank of India

203.97

490.60

483.10

495.25

Hindalco Industries

137.00

456.40

444.85

463.20

Oil & Natural Gas Corporation

122.66

148.50

146.75

150.30

 

  • Reliance Industries and TA'ZIZ have agreed to launch TA'ZIZ EDC & PVC, a world-scale chemical production partnership at the TA'ZIZ Industrial Chemicals Zone in Ruwais. 
  • Nestle India's parent organization - Nestle S.A. has opened a global IT services centre in Bengaluru to support its entities in over 45 countries across Asia, Oceania and Africa. 
  • Infosys' business process management arm -- Infosys BPM is expanding its presence in Ireland, creating 250 jobs locally with the development of a new delivery center in Waterford. 
  • Tech Mahindra has launched FiDaaS Solution Powered by Alveo to address Financial Services' Data Management Challenges.
News Analysis