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NSE Intra-day chart (09 December 2021)
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Market Commentary 10 December 2021
Markets likely to get cautious start on weak global cues

 

Indian equity benchmarks managed to close higher for the third straight session on Thursday, led by gains in index heavyweights like ITC, Larsen & Toubro and Asian Paints. The benchmarks fluctuated between gains and losses for most part of the day owing to volatility as weekly index futures and options expired. After making slightly positive start, key indices slipped into red as traders turned cautious amid reports of foreign fund outflows. Foreign institutional investors (FIIs) net sold shares worth Rs 579.27 crore, as per provisional data available on the NSE. Some anxiety also spread among investors with private report stated that India's retail inflation likely accelerated last month towards the upper limit of the Reserve Bank of India's target range as fruit and vegetable prices climbed. Adding to the pessimism, the Reserve Bank of India (RBI) admitted that credit growth is very low given the size and growth rate of the economy and said for both the numbers to match, the very very wide output gap has to close. Thereafter, the benchmarks recouped losses to trade in green terrain in second half of the session, as traders found some support 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. Some solace also came with a private report stated that 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 also took a 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. Finally, the BSE Sensex rose 157.45 points or 0.27% to 58,807.13 and the CNX Nifty was up by 47.10 points or 0.27% to 17,516.85.

 

The US markets ended lower on Thursday as traders cashed in on the recent strength in the markets, which saw stocks recover strongly from the post-Thanksgiving sell-off triggered by the detection of the Omicron variant of the coronavirus. Meanwhile, traders were now looking ahead to the Federal Reserve's monetary policy announcement next week. Reports suggest the Fed could decide to double the pace of tapering its asset purchase program to $30 billion per month. A report on consumer price inflation due to be released on Friday could impact the outlook for Fed policy, leading some traders to look for safe havens ahead of the data. On the sectoral front, significant weakness emerged among semiconductor stocks, as reflected by the 2.1 percent slump by the Philadelphia Semiconductor Index. The index pulled back further off Tuesday's record closing high. On the economic data front, first-time claims for US unemployment benefits pulled back by much more than expected in the week ended December 4, according to a report released by the Labor Department. The report said initial jobless claims slid to 184,000, a decrease of 43,000 from the previous week's revised level of 227,000. Street had expected jobless claims to edge down to 215,000 from the 222,000 originally reported for the previous week. Meanwhile, the Commerce Department released a report showing a sharp increase in US wholesale inventories in the month of October. The report said wholesale inventories surged up by 2.3 percent in October after jumping by 1.4 percent in September. Street had expected inventories to shoot up by 2.1 percent.

 

Crude oil futures settled sharply lower on Thursday with cut of two percent on concerns about the outlook for energy demand following several countries imposing fresh restrictions on movements to curb the spread of the Omicron variant of the coronavirus. Traders weighed the latest reports on the new virus variant. While a study earlier in the week showed an additional vaccination dose from Pfizer might neutralize the variant, a report quoting a Japanese scientist says the Omicron variant is 4.2 times more transmissible. Meanwhile, British Prime Minister Boris Johnson imposed tougher COVID-19 restrictions in England, saying people should work from home where possible, wear masks in public places and show COVID-19 vaccine passes for entry to certain events and venues. Denmark also plans new restrictions, including closure of restaurants, bars and schools, while China has halted group tourist trips from Guangdong. Besides, South Korea has registered record infections while cases remain elevated in Singapore and Australia. Benchmark crude oil futures for January delivery dropped $1.42 or 2 percent to settle at $70.94 a barrel on the New York Mercantile Exchange. Brent crude for February delivery fell $1.72 or 2.27 percent to settle at $74.10 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended considerably lower against dollar on Thursday on emergence of demand for the greenback from importers. Traders were worried with private report stating that India's retail inflation likely accelerated last month towards the upper limit of the Reserve Bank of India's target range as fruit and vegetable prices climbed. Investors paid no heed towards a private report stating that 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. On the global front; euro, sterling and dollar stabilised on Thursday amid hopes some COVID-19 vaccines might be able to neutralise new coronavirus variant Omicron. Finally, the rupee ended 75.60 (Provisional), weaker by 10 paise from its previous close of 75.50 on Wednesday.

 

The FIIs as per Thursday's data were net buyer in equity segment and net sellers in debt segment. In equity segment, the gross buying was of Rs 9412.74 crore against gross selling of Rs 8465.93 crore, while in the debt segment, the gross purchase was of Rs 214.64 crore with gross sales of Rs 532.17 crore. Besides, in the hybrid segment, the gross buying was of Rs 14.66 crore against gross selling of Rs 49.57 crore.

 

The US markets ended lower on Thursday following positive updates on the Omicron coronavirus variant, with focus now turning towards inflation data for clues on the Federal Reserve's policy decision. Asian markets are trading in red on Friday amid renewed concerns about COVID-19, and as investors awaited key US inflation data that could set direction on interest rates. Indian markets extended gains to a third straight day on Thursday. Today, the start of session is likely to be cautious following weakness in global markets amid concerns over Omicron variant. Health Ministry has said that there are 23 cases of Omicron variant of Covid-19 in India and authorities are closely monitoring the situation. Maharashtra leads the chart with 10 cases, followed by Rajasthan with nine, while globally there are 2303 cases of Omicron variant. However, some support may come later in the day as a private report expects the economy to continue to show positive surprises and record up to 9 percent growth in the next fiscal. For the current financial year too, the report anticipates growth to be higher than the consensus forecast of 8.4-9.5 percent, and printing in at around 10.5 percent. Traders may take note of Finance Minister Nirmala Sitharaman's statement that for a strong, sustainable and inclusive recovery of the global economy hit by the outbreak of COVID-19 pandemic, it is imperative to ensure collective progress of all countries. There will be some buzz in the power industry stocks as dispatch of coal by state-owned CIL to the power sector increased 22.5 per cent to 340 million tonne (MT) during April-November period of the ongoing fiscal year. CIL's despatches to coal-based power plants in the year-ago period stood at 277.4 MT. Software sector stocks will be in focus with research firm IDC's report that the software market in India is estimated to surpass $8.2 billion by the end of the calendar year 2021. There will be some reaction in jewelry industry stocks as a report by the World Gold Council (WGC) showed that imports made up 86 per cent of India's gold supply between 2016-2020, and inbound shipments continue to grow despite high import duty. Shares of Rakesh Jhunjhunwala-backed Star Health and Allied Insurance Company will list on the stock exchanges today. The IPO of the private insurance company saw a weak response with subscription tally reaching only 0.79 times. The issue size of the public issue was trimmed post IPO to Rs  6,400 crore from nearly Rs 7,200 crore. Shriram Properties will enter the final day of bidding while it is the second day to subscribe to C.E Info Systems. Metro Brands issue will open today.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,516.85

17,416.55

17,580.20

BSE Sensex

58,807.13

58,468.66

59,017.77

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ITC

382.41

236.00

227.19

240.64

Tata Motors

169.51

493.15

488.96

497.91

ICICI Bank

160.07

754.30

747.46

762.06

Indian Oil Corporation

128.64

119.90

119.06

121.11

State Bank of India

125.60

487.80

484.76

492.16

 

  • HCL Technologies and Deutsche Apotheker- und Arztebank eG have signed with Atruvia AG an agreement to acquire IT consulting company Gesellschaft fur Banksysteme GmbH. 
  • Bharti Airtel has launched Airtel India Startup Innovation Challenge in partnership with Invest India. 
  • Dr. Reddy's Laboratories has launched Valsartan Tablets, USP, a therapeutic equivalent generic version of Diovan (valsartan) Tablets approved by the USFDA. 
  • Maruti Suzuki India's premium hatchback Baleno has crossed the cumulative sales milestone of 10 lakh units.
News Analysis