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NSE Intra-day chart (13 December 2022)
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Market Commentary 14 December 2022
Benchmarks to open in green on firm global cues

 

Indian equity benchmarks ended higher by over half a percent on Tuesday amid largely positive cues from global markets. After the initial uptick, key gauges gradually inched higher as data showed domestic retail inflation fell to an 11-month low of 5.88 per cent in November, below the upper end of RBI's target band of 2-6 per cent for the first time since December 2021. Some support also came 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 also took 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. Markets continued to trade higher and closed near day's high points. Traders got support as Finance Minister Nirmala Sitharaman lauded the Indian Rupee and said it has been strong against every currency. She said the Reserve Bank of India (RBI) has used foreign exchange reserves that it has to intervene in the market to make sure that the Dollar-Rupee fluctuation does not go too much. Domestic sentiments remained optimistic as Finance ministry said that steps taken by the government has helped in bringing down the inflation to the RBI's tolerance level of below 6 per cent. The ministry also expressed confidence that prices of cereals, pulses and edible oils will soften further in the coming months. Traders overlooked data released by the Ministry of Statistics and Programme Implementation showing that India's industrial output, as per the Index of Industrial Production (IIP), contracted by 4 percent in October. Finally, the BSE Sensex rose 402.73 points or 0.65% to 62,533.30 and the CNX Nifty was up by 110.85 points or 0.60% to 18,608.00.

 

The US markets ended in green on Tuesday, with Nasdaq settling over one percent, following the release of a report from the Labor Department showing consumer prices in the U.S. inched up by less than expected in the month of November. The Labor Department said its consumer price index crept up by 0.1 percent in November after climbing by 0.4 percent in October. Street had expected consumer prices to rise by 0.3 percent. Excluding food and energy prices, core consumer prices edged up by 0.2 percent in November after rising by 0.3 percent in October. Core prices were expected to show another 0.3 percent increase. The report also showed the annual rate of growth by consumer prices slowed to 7.1 percent in November from 7.7 percent in October. The year-over-year increase in November, which came in below street estimates for a slowdown to 7.3 percent, reflects the slowest annual growth since December 2021. However, upside remained capped as traders seemed reluctant to make significant beats ahead of the Federal Reserve's monetary policy announcement on Wednesday. The Fed is widely expected to raise interest rate by another 50 basis points, with traders likely to pay close attention to the accompanying statement for clues about the outlook for future rate hikes. On the sectoral front, oil service stocks turned in some of the market's best performances on the day, driving the Philadelphia Oil Service Index up by 3.6 percent. The rally by oil service stocks came amid a sharp increase by the price of crude oil, with crude for January delivery spiking $2.22 to $75.39 a barrel. A jump by the price of gold also contributed to substantial strength among gold stocks, as reflected by the 2.6 percent surge by the NYSE Arca Gold Bugs Index.

 

Crude oil futures ended higher on Tuesday, magnifying their previous session's rally, on account of concerns about supply disruptions amid the ongoing shutdown of the Keystone pipeline following a massive leak last week. Further, a weak dollar also supported oil prices. Besides, the Chinese government's decision to loosen some Covid-related restrictions helped ease concerns about demand for energy. According to reports, China has withdrawn a state-mandated app used to track whether people had travelled to Covid-stricken areas. Benchmark crude oil futures for January delivery surged $2.22 or 3 percent at $75.39 a barrel on the New York Mercantile Exchange. Brent crude for February delivery rose $2.76 or 3.54 percent to settle at $80.75 (Provisional) a barrel on London's Intercontinental Exchange.

 

Rupee ended weaker against dollar on Tuesday on account of continued dollar demand from importers and banks. Sentiments were downbeat after Ministry of Statistics and Programme Implementation in its latest data has showed that industrial production of India, measured in terms of the Index of Industrial Production (IIP), contracted by 4 per cent in October 2022, mainly due to a decline in the manufacturing sector output and subdued growth in mining and power generation. Investors shrugged off Finance Minister Nirmala Sitharaman's statement that Indian Rupee has been strong against every currency. She said the Reserve Bank of India (RBI) has used foreign exchange reserves that it has to intervene in the market to make sure that the Dollar-Rupee fluctuation does not go too much. On the global front, the pound held broadly steady on Tuesday, as gains following UK employment data were offset by caution ahead of a key reading of U.S. consumer inflation. Finally, the rupee ended at 82.87 (Provisional), weaker by 36 paise from its previous close of 82.51 on Monday.

 

The FIIs as per Tuesday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 10481.36 crore against gross selling of Rs 6866.13 crore, while in the debt segment, the gross purchase was of Rs 296.85 crore against gross selling of Rs 534.57 crore. Besides, in the hybrid segment, the gross buying was of Rs 11.07 crore against gross selling of Rs 10.99 crore.

 

The US markets ended higher on Tuesday as US CPI inflation numbers came in lower than expected. Asian markets are trading in green on Wednesday ahead of the US Federal Reserve's rate action later in the day. Indian markets ended higher on Tuesday after a two day losing run as investors accumulated IT, finance and energy stocks in the wake of encouraging retail inflation data. Today, markets are likely to get positive start tracking strong global cues. Traders will be taking encouragement with foreign fund inflows as foreign institutional investors (FIIs) net bought shares worth Rs 619.92 crore on December 13, according to the provisional data available on the NSE. Some support will come as the government said an amount of Rs 60.46 crore has been received in tax from entities for transactions in virtual digital assets (VDAs), including cryptocurrencies, since the introduction of TDS provisions in July. Some optimism will come as industry body PHDCCI said India can scale up its merchandise exports to G20 nations to USD 500 billion by 2030 from the current USD 212 billion and significantly reduce trade deficit. Traders may take note of report that India and the United Kingdom (UK) have decided to iron out the differences while keeping both nations' sensitivities in mind, and agreed to conclude the negotiations towards a free trade agreement (FTA) at the earliest. There will be some buzz in fertilizer industry stocks with report that urea production stood at 187.21 lakh tonnes during April-November period of this fiscal, while imports were at 46.14 lakh tonnes to meet domestic demand. Banking stocks will be in focus as finance minister Nirmala Sitharaman said banks have written off bad loans worth Rs 10,09,511 crore during the last five financial years. She said the non-performing assets (NPAs), including those in respect of which full provisioning has been made on completion of four years, are removed from the balance sheet of the bank concerned by way of write-off. There will be some reaction in livestock industry stocks as the country's livestock industry said India needs to restrict corn exports to curb a rise in domestic prices and to ensure sufficient supplies of the main poultry feed.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

18,608.00

18,526.39

18,653.44

BSE Sensex

62,533.30

62,252.60

62,690.95

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

322.64

111.25

110.41

112.46

Oil and Natural Gas Corporation

125.93

143.85

142.71

144.81

ITC

106.93

345.05

342.96

346.56

ICICI Bank

104.15

932.65

928.34

936.44

Tata Motors

97.17

418.50

416.66

420.91

 

  • ICICI Bank has raised Rs 5000 crore through allotment of 50,000 senior unsecured redeemable long term bonds in the nature of debentures on private placement basis. 
  • NTPC has started commercial operation of entire capacities of 150 MW & 90 MW Devikot Solar PV Projects with effect from December 13, 2022 at Jaisalmer, Rajasthan. 
  • Tata Motors is all set to increase the prices of its commercial vehicles up to 2% from January 2023. 
  • Axis Bank has raised Rs 12000 crore through bonds at a coupon rate of 7.88% p.a. payable annually, on a private placement basis.
News Analysis