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NSE Intra-day chart (12 November 2023)
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Market Commentary 13 November 2023
Benchmarks likely to get flat-to-positive start ahead of retail inflation data

Indian equity benchmarks remained volatile for yet another session and ended marginally higher on Friday led by gains in Utilities and Power stocks, even as hawkish US Federal Reserve remarks reignited rate worries and dragged Asian peers. Markets made a negative start and stayed in red for better part of the day as persistent foreign fund outflows dented sentiments. Provisional data from the National Stock Exchange showed that foreign institutional investors offloaded shares worth Rs 1,712.33 crore on November 9. Traders remained cautious with the RBI governor Shaktikanta Das' statement that retail inflation remains vulnerable to recurring and overlapping food price shocks. Investors also remained cautious ahead of the Industrial production data to be out later in the day. However, fag-end buying helped benchmark indices to recoup all the losses and settled higher. Some solace also came with Global rating agency Fitch Ratings' report stating that Indian banks' Viability Ratings (VR) will continue to benefit from improved operating conditions and performance in the near term. It expects Issuer Default Ratings (IDRs) to remain stable across banks as they are driven by its expectation of extraordinary support from the Indian sovereign (BBB-/Stable), should there be a need. Traders took a note of SEBI's whole-time member Ashwani Bhatia's statement that India's rapid economic growth needs to be accompanied with the transition to a sustainable economy and stressed that financial markets will play a critical role in promoting sustainable finance. He said countries including India, have made a number of important commitments in the last few years to address climate change and moving to sustainable and inclusive economies. The Indian markets were ushered into the new Hindu calendar year -- Samvat 2080 -- on a bullish note on Sunday. After the ceremonial one-hour trading session, the benchmark Sensex and the Nifty closed with gains of over half a per cent. Finally, the BSE Sensex rose 354.77 points or 0.55% to 65,259.45 and the CNX Nifty was up by 100.20 points or 0.52% to 19,525.55.

The US markets ended sharply higher on Friday with Nasdaq settling over two percent, as traders shrugged off concerns about the outlook for interest rates sparked by remarks by Federal Reserve Chair Jerome Powell on Thursday. Powell said the Fed is not yet confident, rates are at a sufficiently restrictive level to bring inflation down to 2 percent and warned the central bank would not hesitate to resume raising rates. Markets initially benefited from a pullback by treasury yields. On the sectoral front, semiconductor stocks moved sharply higher over the course of the session, resulting in a 4.0 percent spike by the Philadelphia Semiconductor Index. Significant strength was also visible among software stocks, with the Dow Jones U.S. Software Index surging by 2.5 percent to its best intraday level in well over a year. Housing stocks also showed a strong move to the upside on the day, driving the Philadelphia Housing Sector Index up by 1.8 percent. On the economic data front, the University of Michigan said its consumer sentiment index slid to 60.4 in November from 63.8 in October. The street had expected the index to edge down to 63.7. The consumer sentiment index decreased for the fourth consecutive month, falling to its lowest level since hitting 59.0 in May. The report also said year-ahead inflation expectations rose to 4.4 percent in November from 4.2 percent in October, reaching the highest level since hitting 4.7 percent in April. Long-run inflation expectations also increased from 3.0 percent in October to 3.2 percent in November, marking the highest reading since 2011.

Crude oil futures ended higher on Friday, extending previous session's gains. Traders took a note of report that Saudi Arabia's minister of investment, Khalid al-Falih, reassured that the Gulf country has no plans to use oil production as leverage in the Gaza conflict. However, the most active oil futures contract still suffered a third weekly loss as disruptions threat continued to fade. Worries about the impact of higher borrowing costs on economic growth and uncertainty about the outlook for energy demand contributed to oil's downside in recent sessions. Benchmark crude oil futures for December delivery rose $1.43 or 1.9 percent to settle at $77.17 a barrel on the New York Mercantile Exchange. Brent crude for January delivery gained $1.42 or 1.77 percent to settle at $81.73 a barrel on London's Intercontinental Exchange.

Indian rupee settled lower against dollar on Friday tracking an upward movement in crude oil prices and foreign capital outflows. Traders overlooked Global rating agency Fitch Ratings' report stating that Indian banks' Viability Ratings (VR) will continue to benefit from improved operating conditions and performance in the near term. It expects Issuer Default Ratings (IDRs) to remain stable across banks as they are driven by its expectation of extraordinary support from the Indian sovereign (BBB-/Stable), should there be a need. On the global front, sterling held at around a one-week low against the dollar on Friday, set for a weekly decline of 1.2%, as markets digested data showing Britain's economy failed to grow in the third quarter, though this was slightly above expectations. Finally, the rupee ended at 83.32 (Provisional), weaker by 3 paise from its previous close of 83.29 on Thursday.

The FIIs as per Friday's data were net sellers in equity segment, while they were net buyers in debt segment. In equity segment, the gross buying was of Rs 7314.69 crore against gross selling of Rs 8777.05 crore, while in the debt segment, the gross purchase was of Rs 976.00 crore with gross sales of Rs 124.82 crore. Besides, in the hybrid segment, the gross buying was of Rs 10.45 crore against gross selling of Rs 18.71 crore.

The US markets ended higher on Friday after Moody's Investors Service lowered its U.S. credit rating outlook to negative from stable. Asian markets are trading mostly in green on Monday ahead of US President Biden and his Chinese counterpart Xi Jinping's in-person meeting this week. Indian markets edged higher on Friday to end Samvat 2079 with double-digit gains. On Sunday, markets ushered in Samvat 2080 with solid gains as the benchmark indices clocked their second-best Muhurat trading gains in five years. Today, indices are likely to make flat-to-positive start ahead of the retail inflation data. There are expectations that retail inflation to have cooled to a four-month low in October following moderation in volatile food prices. Traders will be taking encouragement as the Central Board of Direct Taxes (CBDT) said gross direct tax collection increased by 17.59 per cent year-on-year (Y-o-Y) to Rs 12.37 trillion in the period from April 1 to November 9. Direct tax collection (net of refunds) stood at Rs 10.6 trillion, 21.82 per cent higher than the net collection for the comparable period last year. Refunds amounting to Rs 1.77 trillion have been issued during the period. However, some cautiousness may come with a private report that Foreign Portfolio Investors (FPIs) selling spree continued as they dumped Indian equity worth over Rs 5,800 crore this month so far on rising interest rates and geopolitical tensions in the Middle East. This came after such investors withdrew Rs 24,548 crore in October and Rs 14,767 crore in September, data with the depositories showed. Traders may be concerned as the data released by the National Statistical Office (NSO) showed that growth in the Index of Industrial Production (IIP) cooled to a three-month low of 5.8 per cent in September from 10.3 per cent in August, on the back of moderation across all sub-sectors and use-based categories. Besides, former Reserve Bank of India Governor Raghuram Rajan said India's economy is showing signs of steady growth but needs to expand at a pace of over 8 percent to create enough jobs for the world's most populous nation. There will be some reaction in port sector stocks as Central government-owned ports, which are major ports and had been showing slow growth this financial year, saw a turnaround in October. The provisional data by the Indian Ports Association showed that there was 13 per cent growth in cargo and the ports handled 70 million tonnes (mt) of goods. Meanwhile, Protean eGov Tech will make its market debut today. The issue price is fixed at Rs 792.

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

Index

Previous close

Support

Resistance

NSE Nifty

19,525.55

19,508.11

19,545.11

BSE Sensex

65,259.45

65,179.04

65,379.42

Nifty Top volumes

Stock

 

Volume

Previous close (Rs)

Support (Rs)

Resistance (Rs)

(in Lacs)

Coal India

102.63

332.45

328.24

336.69

Tata Steel

39.84

120.85

120.44

121.44

ONGC

29.89

196.70

195.46

198.36

NTPC

25.15

244.80

243.09

246.44

Tata Motors

22.46

653.40

651.21

656.76

  • Dr. Reddy's Laboratories has acquired 26% of the paid up equity share capital of O2 Renewable Energy IX (SPV) in the first tranche, in accordance with terms and conditions of the Security Subscription and Shareholders' Agreement. 
  • US-based Ohio Rail Development Commission has approved $1 million in financial assistance to JSW Steel's subsidiary -- JSW Steel USA for its two on-site rail projects at Mingo Junction facility. 
  • Infosys has entered into collaboration with Better Home & Finance Holding Company, a leading digital-first homeownership company, to launch Mortgage as a Service. 
  • Mahindra & Mahindra has reported 17.79% fall in its consolidated net profit at Rs 2483.97 crore for Q2FY24 as compared to Rs 3021.38 crore for the same quarter in the previous year.

News Analysis