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NSE Intra-day chart (08 December 2022)
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Market Commentary 09 December 2022
Markets likely to get optimistic start on firm global cues

 

Indian equity benchmarks managed to end volatile session in green on Thursday following gains in select Capital Goods, Industrials and Banking counters. After making cautious start, key gauges traded higher in morning deals, as traders took support with a report that robust GST collections will help achieve the FY23 revenue growth target on the indirect taxes front, despite the impact of duty cuts on central excise and customs mop-up. Sentiments remained positive as the government extended export benefits under the tax refund scheme -- RoDTEP -- to chemicals, pharmaceuticals and products of iron and steel for a specified period with a view to boost shipments of these goods, amidst exports growth recording a contraction of 16.65 per cent in October. However, key gauges trimmed some gains in afternoon deals, as traders got anxious with India Ratings and Research's (Ind-Ra) latest report stating that the many rising headwinds, both domestic as well as external, are expected to pull down India's Gross domestic product (GDP) growth to 4-4.5 per cent in the second half of FY2023 (H2FY23), shaving off the better numbers in the first half. But, markets once again added gains in late afternoon deals, taking support from a report revealed that there is likely to be 90-110 lakh additions to the gig workforce by 2025 with more and more companies preferring to hire employees on project basis.  According to the report, companies have also started investing in gig work platforms and processes, which indicates how integral they are to the future of jobs growth in India. Some optimism also came as Minister of State for Commerce and Industry Som Parkash said that the reforms taken by Government have resulted in increased Foreign Direct Investment (FDI) inflows in the country. FDI inflows in India stood at $45.15 billion in 2014-2015 and have continuously increased since then, and India registered its highest ever annual FDI inflow of $84.84 billion (provisional figures) in the financial year 2021-22. Finally, the BSE Sensex rose 160.00 points or 0.26% to 62,570.68 and the CNX Nifty was up by 48.85 points or 0.26% to 18,609.35.

 

The US markets ended higher on Thursday as traders picked up stocks at somewhat reduced levels following the sell-off seen to start the week, which reflected concerns about the outlook for interest rates and the economy. Meanwhile, traders continued to look ahead to Friday's release of the Labor Department's report on producer price inflation in November. Street expect producer prices to inch up by 0.1 percent in November after rising by 0.2 percent in October, while the annual rate of growth is expected to slow to 7.4 percent from 8.0 percent. On the sectoral front, networking stocks showed a substantial move to the upside on the day, driving the NYSE Arca Networking Index up by 3.9 percent. Ciena (CIEN) helped lead the sector higher, spiking by 20 percent after reporting better than expected fiscal fourth quarter results and forecasting 'outsized' revenue growth in 2023. Significant strength was also visible among semiconductor stocks, as reflected by the 2.7 percent surge by the Philadelphia Semiconductor Index. On the economic data front, first-time claims for U.S. unemployment benefits edged slightly higher in the week ended December 3rd, according to a report released by the Labor Department. The report said initial jobless claims crept up to 230,000, an increase of 4,000 from the previous week's revised level of 226,000. Street had expected jobless claims to inch up to 230,000 from the 225,000 originally reported for the previous week. The Labor Department said the less volatile four-week moving average also ticked up to 230,000, an increase of 1,000 from the previous week's revised average of 229,000. The four-week moving average of continuing claims also rose to 1,582,250, an increase of 43,250 from the previous week's revised average of 1,539,000.

 

Crude oil futures end lower on Thursday after moving sharply higher in early trading. With the downturn on the day, the price of crude oil extended a recent sell-off, falling to its lowest levels in eleven months. Sentiments remained weak as traders remained concerns about the outlook for energy demand amid the possibility of a global recession. Benchmark crude oil futures for January delivery fell $0.55 or 0.8 percent at $71.46 a barrel on the New York Mercantile Exchange. Brent crude for February delivery dropped $0.96 or 1.25 percent to settle at $76.15 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 remained positive as Minister of State for Commerce and Industry Som Parkash said that the reforms taken by Government have resulted in increased Foreign Direct Investment (FDI) inflows in the country. FDI inflows in India stood at $45.15 billion in 2014-2015 and have continuously increased since then, and India registered its highest ever annual FDI inflow of $84.84 billion (provisional figures) in the financial year 2021-22. On the global front, dollar edged up on Thursday, supported by a push higher in U.S. Treasury yields, as investors weighed the outlook for Federal Reserve policy against the chances that high interest rates could lead to a recession. Finally, the rupee ended at 82.44 (Provisional), stronger by 3 paise from its previous close of 82.47 on Wednesday.

 

The FIIs as per Thursday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 6370.93 crore against gross selling of Rs 7753.10 crore, while in the debt segment, the gross purchase was of Rs 516.17 crore against gross selling of Rs 339.54 crore. Besides, in the hybrid segment, the gross buying was of Rs 6.92 crore against gross selling of Rs 3.30 crore.

 

The US markets ended higher on Thursday as investors interpreted data showing a rise in the weekly jobless claims as a sign the pace of interest rate hikes could soon slow. Asian markets are trading mostly in green on Friday tracking overnight gains on Wall Street. Indian markets ended the choppy session in green on Thursday following gains in select banking and auto counters amid mixed global cues. Today, markets are likely to get optimistic start following firm global cues. Some support will come with report that India Inc expects private capex to gain further momentum in the short to medium term, as it sees green shoots of revival in sectors like real estate, construction, logistics and chemicals, among others. Traders may take note of Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Piyush Goyal's statement that India will have to face global competition effectively to achieve the goal of becoming a prosperous and developed nation. However, there may be some cautiousness with a private report that the Reserve Bank of India's curb on securitising loans having residual maturity of less than 365 days may hit the sale of short-term advances like micro-finance, personal loans and gold loans for a while. There will be some buzz in aviation industry stocks as credit ratings agency Icra said domestic air passenger volume increased 3 per cent to 23.4 million in November on a sequential basis propelled by resilient travel demand and onset of the peak holiday season. Also, Minister of State in the Ministry of Civil Aviation Gen VK Singh said the Central government has accorded in-principal approval for the setting up of 21 greenfield airports across the country. Power stocks will be in focus as power deficit or gap between electricity required and supplied has fallen from two per cent in April this year to 0.1 per cent. There will be some reaction in insurance industry stocks with a private report that life insurance companies reported a 30 per cent year-on-year (YoY) growth in new business premiums (NBP) in November due to a stellar show by state-owned Life Insurance Corporation (LIC), even as private insurers saw their premium growth moderating. Pharma stocks will be in limelight with a private report that the domestic pharmaceutical industry recorded its highest growth rate for 2022 in November, at 17.3 per cent, after both volume sales and price growth picked up. Anti-infectives - antibiotics, antivirals, antifungals etc - clocked 15 per cent growth in November.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

18,609.35

18,555.86

18,643.91

BSE Sensex

62,570.68

62,382.72

62,696.10

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

324.16

112.00

110.86

113.06

Axis Bank

174.66

940.00

921.19

951.39

Kotak Mahindra Bank

126.19

1898.60

1,882.20

1,909.90

Oil & Natural Gas Corporation

101.50

142.75

141.06

143.71

ICICI Bank

101.36

933.20

926.81

936.56

 

  • Oil and Natural Gas Corporation has signed a MoU with global petroleum giant Shell for cooperation in Carbon Capture, Utilization and Storage studies. 
  • Axis Bank is planning to raise funds by issuing unsecured, rated, listed, subordinated, taxable, non-convertible, Basel III compliant Tier II bonds aggregating to total issue size up to Rs 12,000 crore. 
  • JSW Steel has reported the crude steel production for the month of November, 2022 at 16.90 lakh tonnes, that grew by 16% as against 14.60 lakh tonnes in November 2021 on standalone basis. 
  • The United States Food and Drug Administration has placed Sun Pharmaceutical Industries' Halol facility under import alert.
News Analysis