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NSE Intra-day chart (10 November 2022)
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Market Commentary 11 November 2022
Markets to get gap-up opening; IIP data eyed

 

Indian equity markets ended lower on Thursday, on the back of weakness in Auto and Consumer Durables stocks amid widespread selling pressure in global markets. A depreciating rupee also put pressure on domestic equities. Markets made a gap-down opening and stayed in red for whole day, as traders remained concerned amid a private report said that India's GDP growth will slow down to 5.5 per cent in FY24 from the 6.9 per cent expected in the current fiscal 2022-23. The slowdown was attributed to slowing global growth and tightening of monetary policies. It said India will be among the lesser affected economies in the world, but made it clear that the world's fifth largest economy is not immune from global headwinds. Traders paid no heed towards private report stated that with an average gross domestic product growth of 5.5 per cent in the past decade, India is already the fastest-growing economy in the world. It added that India is expected to overtake Japan and Germany to become the world's third-largest economy by 2027. India is also gaining power in the world order. Sentiments remained down-beat in late afternoon deals, even as a private report stated that Indian consumer price inflation is likely to slow in October to 6.73% on weaker food price rises and a strong base one year ago but remained stubbornly well above the 6% upper limit of the Reserve Bank of India's tolerance band. Meanwhile, another private report stated that the government may soon introduce changes to the capital tax regime, making it simpler. The primary consideration will be parity within the assets, and the Centre may even consider changing the tax rates. The multiple holding periods may also be rationalised. Finally, the BSE Sensex fell 419.85 points or 0.69% to 60,613.70 and the CNX Nifty was down by 128.80 points or 0.71% to 18,028.20.

 

The US markets ended sharply higher on Thursday, with Nasdaq settling higher over seven percent, following the release of a report from the Labor Department showing a smaller than expected monthly increase in consumer prices as well as a bigger than expected slowdown in the annual rate of price growth. The Labor Department said its consumer price index rose by 0.4 percent in October, matching the increase seen in September. Street had expected consumer prices to climb by 0.6 percent. The annual rate of growth in consumer prices also slowed to 7.7 percent in October from 8.2 percent in September. The year-over-year increase was the smallest since January and came in below estimates for an 8.0 percent jump. The report also showed core consumer prices, which exclude food and energy prices, edged up by 0.3 percent in October after advancing by 0.6 percent in September. Street had expected core prices to rise by 0.5 percent. The annual rate of growth in core prices also slowed to 6.3 percent in October from 6.6 percent in September, coming in below estimates for 6.5 percent growth. The data suggests the Federal Reserve's efforts to contain inflation are having an effect, reinforcing recent optimism the central bank will slow the pace of interest rate hikes as early as next month. On the sectoral front, interest rate-sensitive housing stocks moved sharply higher on the day, with the Philadelphia Housing Sector Index skyrocketing by 10.3 percent to its best closing level in well over two months.

 

Crude oil futures ended higher on Thursday as the dollar fell after data showed a smaller than expected increase in US consumer prices in October. The dollar index fell to 108.19, losing ground amid rising hopes the Fed will start slowing down the pace of monetary tightening as early as next month. However, gains were limited due to concerns about the outlook for energy demand, as a surge in Covid cases in China's Guangdong province raised fears that authorities might impose tough curbs in the area and several other parts of the country. Benchmark crude oil futures for December delivery rose $0.64 or about 0.8 percent at $86.47 a barrel on the New York Mercantile Exchange. Brent crude for January delivery gained $0.88 or about 0.95 percent to settle at $93.53 (Provisional) a barrel on London's Intercontinental Exchange.     

 

Indian rupee tumbled against dollar on Thursday ahead of the release of the US inflation data. Traders were worried as private report said that India's GDP growth will slow down to 5.5 per cent in FY24 from the 6.9 per cent expected in the current fiscal 2022-23. The slowdown was attributed to slowing global growth and tightening of monetary policies. It said India will be among the lesser affected economies in the world, but made it clear that the world's fifth largest economy is not immune from global headwinds. On the global front, dollar rose ahead of U.S. inflation data due later on Thursday while cryptocurrencies remained under pressure after crypto exchange Binance scrapped plans to rescue ailing rival FTX. Finally, the rupee ended at 81.77 (Provisional), weaker by 30 paisa from its previous close of 81.47 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 9096.54 crore against gross selling of Rs 8550.12 crore, while in the debt segment, the gross purchase was of Rs 600.06 crore against gross selling of Rs 323.59 crore. Besides, in the hybrid segment, the gross buying was of Rs 3.23 crore against gross selling of Rs 12.22 crore.

 

The US markets ended higher on Thursday as a sign of slowing inflation in October sparked speculation the Federal Reserve might become less aggressive with interest rate hikes. Asian markets are trading in green on Friday after the release of US inflation data in October raised investor hopes that inflation has peaked. Indian markets extended their previous session's losses and fell notably on Thursday as U.S. political uncertainty, China's COVID-woes and the turmoil in crypto currency markets spurred risk aversion. Today, the markets are likely to make gap-up opening tracking firm global cues. Investors will be eyeing the Index of Industrial production (IIP) for further cues. Foreign fund inflows likely to support domestic sentiments. Foreign institutional investors (FIIs) have net bought shares worth Rs 36.06 crore on November 10, as per provisional data available on the NSE. Some support will come as State Bank of India has pencilled in lower current account deficit at 3 per cent for this fiscal as against the minimum consensus of 3.5 per cent, citing rising software exports, remittances and a likely $5-billion jump in forex reserves via swap deals. Traders may take note of Commerce and industry minister Piyush Goyal's statement that Indo-US economic relations are driven by the common interest of promoting sustainability, emerging technologies, globally resilient supply chains, and small businesses. There will be some buzz in tea industry stocks as Indian Tea Association (ITA) said that tea exports from India are expected to increase to around 230 million kg during this calendar year from 196 million kg last year on the back of buoyancy in export markets and Sri Lanka's loss of crop. FMCG industry stocks will be in focus with a private report that the country's FMCG industry continued to witness consumption slowdown in the September quarter, with rural markets registering a higher decline in volumes compared to the three months ended June. There will be some reaction in insurance industry stocks with a private report that India's insurance regulator has proposed to the government that insurers be allowed to buy over 10% of unlisted firms without approval, a move that could unlock new funding avenues for startups in Asia's third largest economy. Corporate earnings continue to be under watch as LIC, Mahindra & Mahindra, Adani Power, Hindalco Industries, Hindustan Aeronautics, Hindalco Industries, ABB India, Zydus Lifesciences and Hindustan Aeronautics are among companies that will announce their quarterly earnings today. Meanwhile, DCX Systems will debut on bourses on Friday, November 11. There are expectation that the stock to list at premium over the issue price of Rs 207 per share.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

18,028.20

17,964.04

18,097.74

BSE Sensex

60,613.70

60,409.87

60,833.13

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

278.64

104.85

 104.20

 105.75

Tata Motors

262.51

413.20

 408.09

 419.44

Coal India

208.32

254.40

 250.84

 259.24

ITC

193.27

356.00

 353.44

 359.24

Axis Bank

189.56

841.40

 836.04

 851.74

 

  • Adani Enterprises' JV -- AdaniConnex has signed a MoU with Adani Power to acquire 100% equity shares of APL's wholly owned subsidiary namely, Support Properties. 
  • JSW Steel expects its exports to fall to a more than five-year low at 10% of overall sales in the fiscal year to March 2023 because of reduced global demand and an export tax.
  • Mahindra & Mahindra's subsidiary -- Mahindra Holdings has incorporated wholly owned subsidiary namely Emergent Solren on November 09, 2022. 
  • Hindustan Unilever and GlaxoSmithKline Consumer Healthcare have mutually planned to terminate their agreement for selling of Over-the-Counter and oral care products.
News Analysis