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NSE Intra-day chart (14 December 2022)
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Market Commentary 15 December 2022
Markets likely to get negative start on weak global cues

 

Indian equity benchmarks pared some initial gains but managed to end higher on Wednesday, led by gains in Metal and Realty stocks. Benchmarks made optimistic start and stayed in green for whole day as traders took some support with the government stating that 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. Buying further crept in as industry body PHDCCI said India can scale up its merchandise exports to G20 nations to $500 billion by 2030 from the current $212 billion and significantly reduce trade deficit. Traders also took a 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. Key gauges extended gains in afternoon deals, as India's inflation based on wholesale price index (WPI) eased further to 5.85% in the month of November 2022 as against 8.39% recorded in October 2022, primarily contributed by fall in prices of food articles, basic metals, textiles, chemicals & chemical products and paper & paper products as compared to the corresponding month of the previous year. The wholesale inflation was 10.70% in September 2022. Steady foreign flows aided the sentiments in the domestic markets. Foreign institutional investors (FIIs) net bought shares worth Rs 619.92 crore on December 13, according to the provisional data available on the NSE. However, indices pared some of the gains towards the end as traders got anxious with the Asian Development Bank's report stating that developing Asia's economic expansion next year is expected to be slower than previously projected as a global slowdown and the prolonged war in Ukraine weigh on the region. Finally, the BSE Sensex rose 144.61 points or 0.23% to 62,677.91 and the CNX Nifty was up by 52.30 points or 0.28% to 18,660.30.

 

The US markets ended lower on Wednesday after the Fed announced its widely expected decision to slow the pace of interest rate increases but still signaled further rate hikes. After raising interest rates by 75 basis points at four consecutive meetings, the Fed announced its decision to raise interest rates by 50 basis points to a target range of 4.25 to 4.50 percent. The text of the Fed's accompanying statement was largely unchanged from last month, however, with the central bank reiterating that it anticipates ongoing increases in rates will be appropriate. The economic projections provided along with the announcement also suggest the Fed expects rates to ultimately be raised higher than forecast back in September. The median forecast suggests rates will be raised to a so-called terminal rate of 5.1 percent next year compared to the September projection of 4.6 percent. Fed Chair Jerome Powell said it will require substantially more evidence inflation is on a sustained downward trend, likely attracting even more attention to the inflation data due ahead of the next meeting. On the sectoral front, financial stocks showed a significant move to the downside following the Fed announcement, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index falling by 1.7 percent and 1.6 percent, respectively. Considerable weakness also emerged among semiconductor stocks, as reflected by the 1.6 percent drop by the Philadelphia Semiconductor Index. Chemical stocks also came under pressure late in the session, dragging the S&P Chemical Sector Index down by 1.4 percent.

 

Crude oil futures ended higher on Wednesday, magnifying recent gains, after the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) forecast a rebound in demand over the course of next year.  In its December report, the IEA raised its forecast for oil demand growth in 2023 to 1.7 million barrels a day. Meanwhile, OPEC expects global oil demand to be 2.2 million barrels per day in 2023. However, data from the Energy Information Administration showed crude inventories rose by 10.231 million barrels last week versus expectations for a draw of 3.595 million barrels. Benchmark crude oil futures for January delivery surged $1.89 or 2.5 percent at $77.28 a barrel on the New York Mercantile Exchange. Brent crude for February delivery rose $2.10 or 2.6 percent to settle at $82.78 (Provisional) a barrel on London's Intercontinental Exchange.

 

Indian rupee strengthened against the dollar on Wednesday on the back of positive cues from domestic equities. Sentiments were positive, as India's inflation based on wholesale price index (WPI) eased further to 5.85% in the month of November 2022 as against 8.39% recorded in October 2022, primarily contributed by fall in prices of food articles, basic metals, textiles, chemicals & chemical products and paper & paper products as compared to the corresponding month of the previous year. The wholesale inflation was 10.70% in September 2022. Besides, despite recent global headwinds, Asian Development Bank (ADB) has kept its outlook for India's economic growth unchanged at 7 per cent for the fiscal year 2022-23 (April 2022 to March 2023) from its September forecast supported by a strong domestic base. On the global front, sterling held steady against the euro on Wednesday, after data showed UK inflation eased from a 41-year high in the run-up to the Bank of England's next rate decision due later this week. Finally, the rupee ended at 82.45 (Provisional), stronger by 15 paise from its previous close of 82.60 on Tuesday.

 

The FIIs as per Wednesday's data were net buyers in equity segment, while net sellers in debt segment. In equity segment, the gross buying was of Rs 9622.17 crore against gross selling of Rs 8953.54 crore, while in the debt segment, the gross purchase was of Rs 238.45 crore against gross selling of Rs 4135.47 crore. Besides, in the hybrid segment, the gross buying was of Rs 9.67 crore against gross selling of Rs 8.11 crore.

 

The US markets ended in red on Wednesday after US Federal Reserve announced a 50 bps interest rate hike which was on expected lines. Asian markets are trading lower on Thursday following overnight weakness on Wall Street. Indian markets ended with gains on Wednesday, extending their previous day rally amid lower level of inflation on domestic front and better-than-expected inflation readings from the US. Today, the markets are likely to open in red on weak global cues. Traders will be concerned as India Ratings said falling exports and high crude prices are set to push up current account deficit (CAD) in the second quarter to a 37-quarter high of 4.4 per cent of GDP at USD 36 billion as against USD 9.7 billion or 1.3 per cent in the year-ago period. However, some respite may come as Finance minister Nirmala Sitharaman exuded confidence that inflation would further decline and the government is on track to meet its budgetary target for deficit and said that there is no fear of stagflation in India. Some support may come as foreign institutional investors (FIIs) net bought shares worth Rs 372.16 crore in the Indian share market on 14 December, according to the provisional data available on the NSE. Meanwhile, the Parliament has passed the Energy Conservation (Amendment) Bill, 2022 that aims to mandate the use of green energy and enables the government to set up a carbon trading scheme. The Bill also allows the government to specify the minimum amount of non-fossil sources to be used by designated energy consumers.  Edible oil industry stocks will be in focus as industry body SEA said India's edible oil imports rose 34 per cent in November to 15.29 lakh tonne on sharp jump in import of crude palm and refined palm oils. The Solvent Extractors' Association of India (SEA) released the data of imports of total vegetable oils comprising edible oil and non-edible oil for November, the first month of 2022-23 oil marketing year. There will be some reaction in textile industry stocks as Icra in a report said even as macro headwinds impact performance of textile players across segments in the second quarter of 2022-23, the companies are expected to witness a healthy turnover in this financial year. Icra said it expects textile companies to report healthy growth in turnover in FY23 while the margins are expected to moderate amidst cost pressures. Besides, Commerce, industry and textiles minister Piyush Goyal has said India will aim to achieve $100 billion exports for textiles by 2030 as there are huge opportunities in the sector.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

18,660.30

18,630.10

18,693.30

BSE Sensex

62,677.91

62,567.75

62,811.58

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

386.06

113.05

111.70

113.80

Oil and Natural Gas Corporation

176.92

147.15

144.64

149.14

State Bank of India

140.10

625.30

619.61

628.86

ICICI Bank

123.19

921.00

915.31

931.36

Axis Bank

85.73

942.00

936.95

948.60

 

  • M&M has received approval for investment of Rs 10,000 crore for Electric Vehicles under the Maharashtra Government's industrial promotion scheme for Electric Vehicles.
  • Bharti Airtel has launched its cutting edge 5G services in Lucknow. 
  • Andhra Pradesh State Investment Promotion Board has given an approval for JSW Steel's proposal to set up a steel plant in Kadapa at a cost of Rs 8,800 crore.
  • Coal India has issued letters of acceptance for seven coal projects to be pursued through engagement of Mine Developer and operators.
News Analysis