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NSE Intra-day chart (12 December 2022)
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Market Commentary 13 December 2022
Markets likely to open in green on positive global cues

 

Indian equity benchmarks settled flat on Monday as traders remained on sidelines ahead of the country's November retail inflation data, October's industrial production (IIP) data to be released later in the day. Benchmarks made negative start amid a weak trend in global markets and continuous foreign fund outflows. Foreign Institutional Investors (FIIs) remained net sellers in the capital markets on Friday as they offloaded shares worth Rs 158.01 crore, according to exchange data. But, key indices quickly pared initial losses to trade flat with positive bias as traders took some support with the Reserve Bank of India's (RBI) statistical supplement showing that India's foreign exchange reserves rose for a fourth week to an over three-month high of $561.16 billion in the week through December 2. Traders also took a note of report that the government has asked trade bodies and banks to explore opportunities for trade in rupee with more countries after having facilitated rupee trade with Russia, Mauritius and Sri Lanka. But, buying proved short-lived as markets once again slipped into red in late afternoon session amid a private report stating that foreign portfolio investors (FPIs) turned sellers in the last four trading sessions and pulled out Rs 3,300 crore as they are adopting a cautious stance ahead of the US Federal Reserve's decision on the interest rate. Some concern also came with the data provided by commerce and industry minister Piyush Goyal showing that the trade deficit, difference between import and exports, between India and China has touched $51.5 billion during April-October this fiscal. Though, markets managed to trim losses towards the end, taking support from the Finance Ministry's statement that the net direct tax collection grew 24 per cent to Rs 8.77 lakh crore in the April-November of the current fiscal. This represents 61.79 per cent of the full-year Budget Estimates (BE) of direct tax collection for 2022-23 (April-March). Finally, the BSE Sensex fell 51.10 points or 0.08% to 62,130.57 and the CNX Nifty was up by 0.55 points to 18,497.15.

 

The US markets ended higher with strong gains on Monday as traders picked up stocks at somewhat reduced levels following the notable decline seen in the previous week.  Positive sentiment was also generated in reaction to a survey from the New York Federal Reserve showing inflation expectations decreased at the short, medium, and longer terms in November. The New York Fed's Survey of Consumer Expectations showed median one-, three-, and five-year-ahead inflation expectations decreased to 5.2 percent, 3.0 percent, and 2.3 percent, respectively. Meanwhile, traders continued to look ahead to the Federal Reserve's highly anticipated monetary policy decision on Wednesday. While the Fed is widely expected to slow the pace of interest rate hikes to 50 basis points, traders have recently expressed concerns about how much further the Fed will need to raise rates in order to contain inflation. On the sectoral front, energy stocks turned in some of the market's best performances on the day, benefiting from a significant rebound by the price of crude oil. With crude for January delivery surging $2.15 to $73.17 a barrel, the Philadelphia Oil Service Index soared by 4.1 percent and the NYSE Arca Oil Index jumped by 2.7 percent. Substantial strength was also visible among transportation stocks, as reflected by the 3.0 percent surge by the Dow Jones Transportation Average.

 

Crude oil futures ended sharply higher on Monday on supply jitters following the continued closure of a pipeline carrying Canadian heavy crude to the U.S. Gulf Coast of Mexico. It is not known as yet as to how long it will take TC Energy Corp to restart its Keystone oil pipeline that was shut after more than 14,000 barrels of oil leaked on the line last week. Meanwhile, traders also looked ahead to the consumer price inflation data, and the Federal Reserve's monetary policy meeting. Benchmark crude oil futures for January delivery surged $2.15 or 3 percent at $73.17 a barrel on the New York Mercantile Exchange. Brent crude for February delivery rose $1.89 or 2.5 percent to settle at $77.99 a barrel on London's Intercontinental Exchange.

 

Indian rupee ended lower against dollar on Monday, on the back of lackluster trend in the domestic equity markets. Traders were worried after data provided by commerce and industry minister Piyush Goyal showed that the trade deficit, difference between import and exports, between India and China has touched $51.5 billion during April-October this fiscal. The deficit during 2021-22 had jumped to $73.31 billion as compared to $44.03 billion in 2020-21. According to the data, imports during April-October this fiscal stood at $60.27 billion, while exports aggregated at $8.77 billion. On the global front, dollar edged lower on Monday but losses were contained by data last week that showed U.S. wholesale inflation rose more than expected last month, reinforcing the view that the Federal Reserve may have to keep interest rates higher for longer. Finally, the rupee ended at 82.53 (Provisional), weaker by 25 paise from its previous close of 82.28 on Friday.

 

The FIIs as per Monday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 7576.11 crore against gross selling of Rs 7674.10 crore, while in the debt segment, the gross purchase was of Rs 742.70 crore against gross selling of Rs 748.52 crore. Besides, in the hybrid segment, the gross buying was of Rs 29.40 crore against gross selling of Rs 5.65 crore.

 

The US markets ended higher on Monday, lifted in part by gains in Microsoft and Pfizer, as investors girded for inflation data on Tuesday and a policy announcement from the Federal Reserve later in the week. Asian markets are trading mostly in green on Tuesday by overnight optimism on Wall Street. Indian markets ended flat on Monday amid a weak trend in global markets and continuous foreign fund outflows. Today, start of the session is likely to be optimistic tracking positive cues from global markets. Investors will also cheer on India's November CPI numbers. Retail inflation fell to an 11-month low of 5.88 per cent in November, mainly due to softening prices of food items, official data showed on Monday. This is the first time in 11 months that the retail inflation print has come within the RBI's tolerance band of 4 (+/- 2) per cent. Some support will come as a bill seeking to mandate the use of non-fossil energy sources such as biomass, ethanol and green hydrogen was passed by Parliament. Traders may take note of External Affairs Minister S Jaishankar's statement that India and the UAE which have inked a landmark trade deal have seen a veritable transformation in their ties which are now beginning to have a broader ripple impact and he emphasized that they want to use this relationship to shape the changing world. However, traders may be concerned as India's industrial output, as per the Index of Industrial Production (IIP), crashed by 4 percent in October, data released by the Ministry of Statistics and Programme Implementation showed. Some cautiousness may come foreign institutional investors (FIIs) sold shares worth Rs 138.81 crore on December 12, as per provisional data available on the NSE. There will be some buzz in gems and jewelry industry stocks as the Gem and Jewellery Export Promotion Council (GJEPC) said the gems and jewellery exports grew 11.83 per cent to Rs 19,855.17 crore (USD 2,429.86 million) in November compared to the year-ago period on the back of resumption of manufacturing activities after Diwali. Power stocks will be in focus as Icra said the all-India electricity demand is expected to grow 7 per cent to 1,480 billion units (BU) in the ongoing financial year. In the preceding 2021-22 fiscal, the all-India power demand was at 1,380 BU. There will be some reaction in aviation industry stocks as the rating firm ICRA said amid recovery in domestic passenger traffic in FY2023, the earnings recovery for domestic airlines will be slow-paced due to elevated ATF prices in addition to the rupee depreciation against the US dollar. Leather and footwear related stocks will be limelight with a report that Indian footwear and leather exports to West Asia and North Africa (WANA) region have registered an exponential growth of 20 per cent in the first half of 2022. Shares of Tata Steel, JSW Steel, JSPL and SAIL will be tracked after the companies qualified under the PLI scheme for specialty steel. Meanwhile, Landmarks Cars IPO opens for subscription today.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

18,497.15

18,388.05

18,563.90

BSE Sensex

62,130.57

61,791.34

62,354.61

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

370.82

111.70

109.56

112.96

ITC

112.14

343.20

340.86

344.76

State Bank of India

92.85

613.05

609.80

617.50

Oil and Natural Gas Corporation

89.46

142.35

140.20

143.50

ICICI Bank

84.93

930.30

925.60

934.45

 

  • Oil and Natural Gas Corporation is planning to invest Rs 2,150 crore on drilling 53 exploratory wells in Andhra Pradesh. 
  • HCL Technologies has expanded multi-year contract with Mondelez International, to enhance Mondelez International's cybersecurity and transform digital workplace services globally. 
  • NTPC has declared commercial operation of first part capacity of 162.27 megawatt out of 230 megawatt Ettayapuram Solar PV project with effect from December 10, 2022 at Tamil Nadu. 
  • Reliance Industries' telecom arm -- Jio has collaborated with global technology brand OnePlus to bring in the evolutionary stand-alone 5G technology ecosystem in the country.
News Analysis