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NSE Intra-day chart (10 December 2021)
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Market Commentary 13 December 2021
Benchmarks likely to make gap-up opening on firm global cues

 

Indian equity benchmarks ended flat on Friday, trimming intraday losses in the dying hour of trade, as investors are eyeing the industrial production data to be out later in the day. Domestic equities began on a quiet note, following weak sentiments in the global market as the market awaits the release of Indian and US November inflation numbers. Traders were concerned as Health Ministry 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. Selling further crept in with Former Reserve Bank of India Governor Duvvuri Subbarao's statement that the central bank could lose control over the money supply and inflation management if cryptocurrency is allowed in the country. Rao also said India's case for issuing a central bank digital currency (CBDC) may not be strong as there are capital controls. However, benchmark indices have recovered from the lows of the day, taking support from 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. Some solace also came with 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. She stressed on the critical role of multilateralism and collective action in achieving the goal of global recovery.  Finally, the BSE Sensex fell 20.46 points or 0.03% to 58,786.67 and the CNX Nifty was down by 5.55 points or 0.03% to 17,511.30.

 

The US markets settled higher on Friday after the Labor Department released a report showing U.S. consumer prices surged at the fastest annual rate of in nearly 40 years in November. The report showed the annual rate of growth in consumer prices accelerated to 6.8 percent in November from 6.2 percent in October, reflecting the biggest jump since June of 1982. Core consumer prices, which exclude food and energy prices, were up by 4.9 percent compared to the same month a year ago, showing the biggest annual increase since June of 1991. The faster annual growth came as consumer prices climbed by 0.8 percent in November following a 0.9 percent advance in October. Street had expected consumer prices to increase by 0.7 percent. Core consumer prices rose by 0.5 percent in November after climbing by 0.6 percent in October. The increase in core prices matched street estimates. A separate report from the University of Michigan showed consumer sentiment in the U.S. unexpectedly improved in early December. The report said the consumer sentiment index climbed to 70.4 in December after dropping to a ten-year low of 67.4 in November. The rebound surprised market participants, who had expected the index to edge down to 67.1. On the sectoral front, Software stocks turned in some of the market's best performances on the day, driving the Dow Jones U.S. Software Index up by 2.4 percent. Oracle (ORCL) is leading the sector higher, soaring by 15.6 percent after the business software giant reported better than expected fiscal second quarter results and announced a $10 billion increase in its share repurchase program. Significant strength also emerged among oil service stocks, as reflected by the 1.7 percent gain posted by the Philadelphia Oil Service Index. The strength in the oil service sector came amid an increase by the price of crude oil, with crude for January delivery climbing $0.73 to $71.67 a barrel.

 

Crude oil futures ended higher on Friday as prices continued to recover from concerns that the omicron variant of coronavirus would disrupt economic activity, and energy demand. Fears of a likely slowdown in China's property sector as well as the country's broader economy, and declining domestic air traffic in China due to tighter travel restrictions limited oil's uptick. A report from Baker Hughes said the number of active U.S. rigs drilling for oil rose by four to 471 this week. The total U.S. rig count, which includes those drilling for natural gas, climbed by seven to 576, the data showed. Benchmark crude oil futures for January delivery rose $0.73 or about 1 percent to settle at $71.67 a barrel on the New York Mercantile Exchange. Brent crude for February delivery added $1 or 1.34 percent to settle at $75.41 a barrel on London's Intercontinental Exchange.

 

Continuing previous session drubbing, Indian rupee concluded substantially weaker against dollar on Friday amid consistent foreign fund outflows and growing concerns about inflation. Traders were worried as private report states that the US inflation is expected to have risen 6.8 per cent year-on-year in November, overtaking a 6.2 per cent increase in October, which was the quickest increase in 31 years. Adding more pessimism, Former Reserve Bank of India Governor Duvvuri Subbarao's states that the central bank could lose control over the money supply and inflation management if cryptocurrency is allowed in the country. Rao also said India's case for issuing a central bank digital currency (CBDC) may not be strong as there are capital controls. On the global front, pound inched down on Friday to within striking distance of its 2021 low against the dollar, as the UK's pandemic curbs and weak economic data dampened expectations that the Bank of England would raise interest rates soon. Finally, the rupee ended 75.78 (Provisional), weaker by 18 paise from its previous close of 75.60 on Thursday.

 

The FIIs as per Friday's data were net buyers in equity, while net sellers in debt segment. In equity segment, the gross buying was of Rs 15788.37 crore against gross selling of Rs 7840.82 crore, while in the debt segment, the gross purchase was of Rs 328.66 crore with gross sales of Rs 712.18 crore. Besides, in the hybrid segment, the gross buying was of Rs 9.19 crore against gross selling of Rs 18.33 crore.

 

The US markets ended higher on Friday as market participants digested an inflation reading that was in line with consensus. Asian markets are trading in green on Monday as investor focus shifted to central bank meetings lined up this week. Indian markets ended a choppy session marginally lower on Friday as investors awaited cues from U.S. consumer inflation data for November due this evening and the FOMC meeting next week. Today, the start of new week is likely to be gap-up tracking strength in global markets. Sentiments will get a boost with the government data showing that India's industrial production rose 3.2 per cent in October 2021. As per the Index of Industrial Production (IIP) data by the National Statistical Office (NSO), the manufacturing sector's output grew 2 per cent in October. Now, market participants will be eying consumer price index (CPI) for further cues. Some support will come as the finance ministry said India's economic recovery is expected to strengthen in the remaining quarters of the current fiscal year with the investment cycle kicking off, and projected 7% annual growth until the end of the decade. Though, some cautiousness may come as foreign portfolio investors (FPIs) were net sellers in the Indian markets to the tune of Rs 8,879 crore so far in December. As per depositories' data, they took out Rs 7,462 crore from equities, Rs 1,272 crore from the debt segment and Rs 145 crore from hybrid instruments during December 1-10. Also, RBI data showed India's foreign exchange reserves declined for the second consecutive week, ending $1.783 billion down at $635.905 billion for the week ended December 3. In the previous week, the reserves had slid by $2.713 million to $637.687 billion. Meanwhile, Union Minister of Commerce and Industry Piyush Goyal said that the Central government has increased the bank deposit insurance cover, in case of problems occurring such as closure, from Rs 1 lakh to Rs 5 lakh. The amount has to be refunded to the depositor within 90 days. Power stocks will be in focus as power ministry data showed that India's power consumption grew by 1.3 per cent in the first ten days of this month from December 1 to 10 to 34.23 billion units (BU) over the same period a year ago. There will be some reaction in edible oil industry stocks as industry body SEA said edible oil prices declined by Rs 8-10 per kg in last one month mainly on the back of lower import duties and may fall by Rs 3-4 per kg in coming months on higher domestic output of oilseeds and bearish trend in global markets. Railways stocks will be in limelight with a private report that the Ministry of Railways will get Rs 20,000 crore under the second tranche of the supplementary demand for grants. Besides, shares of Tega Industries will list on the stock exchanges today. The Rs 619 crore IPO of Tega Industries was subscribed to by investors a whopping 219.04 times. The three-day IPO of MapmyIndia, which has been subscribed 6.16 times, will close later in the day, while that of Metro Brands will enter its second day. MedPlus Health Services' IPO will open for subscription today.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,511.30

17,432.91

17,562.01

BSE Sensex

58,786.67

58,514.31

58,959.46

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ITC

351.62

235.90

233.45

238.65

Tata Motors

145.67

493.40

487.70

497.95

Indian Oil Corporation

135.54

120.00

119.30

121.00

State Bank of India

132.61

494.80

487.49

499.04

Oil & Natural Gas Corporation

103.24

147.70

146.16

148.61

 

  • Dr. Reddy's Laboratories has launched Venlafaxine ER Tablets which is therapeutically equivalent to Venlafaxine Extended-Release Tablets, 150 mg and 225 mg, of Osmotica Pharmaceutical US LLC approved by the USFDA.
  • Infosys has entered into collaboration with Packable, a leading e-commerce company with a proprietary tech-enabled offering, sitting at the intersection of brands, marketplaces and customers. 
  • Coal India's supply of coal to power sector increased 22.5 per cent to 340 million tonne during April-November period of the ongoing fiscal year. 
  • NTPC has awarded order to BTL EPC for setting up of the coal handling Plant of Pakri Barwadih Coal Mining Project valued at Rs 317 crore.
News Analysis