Indian equity benchmarks ended
flat with positive bias on Monday, failing to sustain gains made earlier in the
day. The benchmarks staged a gap opening, as sentiments got a boost as Commerce
and Industry Minister Piyush Goyal said Indian economy is back in action and it
is clear from several indicators such as rising exports and increasing foreign
direct investment (FDI) inflows into the country. Some support also came with
outgoing chief economic advisor K V Subramanian's statement that Indian economy
is expected to see a double-digit growth in 2021-22 and between 6.5-7 per cent
in the next financial year. He said that he does not expect commodity inflation
will taper the V-shaped recovery going forward. Sentiments remained positive
with Sebi chief Ajay Tyagi's statement that the decision to implement a shorter
settlement system in a phased manner beginning February 2022 will go a long way
in protecting investors' interest. However, profit booking at higher levels led
to the benchmarks coming off intraday highs. Traders got anxious with data
showing that retail inflation based on Consumer Price Index (CPI) inched up to
4.48 per cent in October compared to 4.35 per cent in September, due to an uptick
in food prices. Though, it eased compared with 7.61 per cent in October 2020.
Besides, the Index of Industrial Production (IIP) indicating industrial growth
slipped to 3.1 per cent in September, mainly due to the waning low base effect
while mining and manufacturing sectors performed well. Some pessimism also came
as WPI inflation in October surged to 12.54% from 10.66% a month ago and 1.31%
in October 2020. The high rate of inflation in October 2021 is primarily due to
rise in prices of mineral oils, basic metals, food products, crude petroleum
& natural gas, chemicals and chemical products etc as compared the
corresponding month of the previous year. Finally, the BSE Sensex rose 32.02
points or 0.05% to 60,718.71 and the CNX Nifty was up by 6.70 points or 0.04%
to 18,109.45.
The US markets ended marginally
lower on Monday as traders expressed some uncertainty about the near-term
outlook for the markets. Concerns about inflation continued to weigh on
investors' minds after last week's report showing consumer prices increased at
their fastest annual rate in over thirty years in October. The elevated pace of
inflation has led to worries that the Federal Reserve might be forced to
accelerate its plans to begin tightening monetary policy. However, the Fed has
repeatedly described the factors driving inflation as transitory and signaled
that it will not be in a hurry to start raising interest rates. On the economic
data front, the New York Federal Reserve released a report showing New York
manufacturing activity grew strongly in the month of November. The New York Fed
said its general business conditions index jumped to 30.9 in November from 19.8
in October, with a positive reading indicating growth. Street had expected the
index to rise to 21.6. Meanwhile, the report said firms were less optimistic
about the six-month outlook than they were last month, with the index for
future business conditions tumbling to 36.9 in November from 52.0 in October.
Crude oil futures ended
marginally higher on Monday after plunging earlier in the session amid
expectations of higher supplies and weakening demand. The dollar's climb to a
16-month high also weighed on oil prices early on in the session. Meanwhile, US
President Joe Biden has called on the OPEC+ alliance to turn on the taps and
bring down crude prices. However, Saudi Arabia and the UAE signaled that they
will continue raising oil output cautiously and will not bow to US pressure to
pump faster. Benchmark crude oil futures for December delivery gained 9 cents
or 0.1 percent to settle at $ 80.88 a barrel on the New York Mercantile
Exchange. However, Brent crude for January delivery lost 12 cents or 0.2
percent to settle at $82.05 a barrel on London's Intercontinental Exchange.
Indian rupee ended lower against
dollar on Monday, on account of sustained dollar demand from importers and
banks. Sentiments were downbeat as WPI inflation in October surged to 12.54%
from 10.66% a month ago and 1.31% in October 2020. However, downfall remain
capped as Commerce and Industry Minister Piyush Goyal's statement that the
proposed free trade agreements (FTAs) with countries, including Australia, the
UK and the UAE, are moving at a fast pace and these pacts, when implemented,
would help provide greater market access to domestic goods. On the global
front, pound was steady in early trading on Monday, lagging behind other
risk-related currencies, as investors focused on talks over post-Brexit trade
arrangements for Northern Ireland, ahead of market data later in the week. Finally,
the rupee ended 74.50 (provisional), weaker by 5 paise from its previous close
of 74.45 on Friday.
The FIIs as per Monday's data
were net buyers in both equity and debt segments. In equity segment, the gross
buying was of Rs 11923.31 crore against gross selling of Rs 9475.49 crore,
while in the debt segment, the gross purchase was of Rs 1795.40 crore with
gross sales of Rs 476.56 crore. Besides, in the hybrid segment, the gross
buying was of Rs 248.07 crore against gross selling of Rs 40.14 crore.
The US markets ended lower on
Monday as rising Treasury yields dented the appetite for technology stocks.
Asian markets are trading in green on Tuesday as U.S. stock futures made early
gains, though investors were wary of bearish surprises in a batch of Chinese
economic data due out later. Indian markets made mild gains in a volatile
session as gains in IT, pharma and consumer stocks were offset by losses in oil
& gas, metal and automobile scrips. Today, benchmarks likely to continue
their gaining momentum with flat-to-positive start tracking gains in Asian
peers. Traders will be taking encouragement as merchandise exports grew for the
eleventh consecutive month to $35.65 billion, up 43 per cent on-year in
October, as external demand continued to remain robust. The preliminary data
released by the commerce and industry ministry showed growth being driven by
higher demand for items, primarily engineering goods, petroleum products, gems
and jewellery, as well as organic and inorganic chemicals, among other items.
Some support will come as the Reserve Bank of India (RBI) in its 'state of the
economy' report stated that the aggregate demand in the economy is improving
and overall monetary and credit conditions are conducive for a durable economic
recovery to take root, while the quality of the government expenditure has seen
an improvement in the second half. Traders may take note of Union Finance
Minister Nirmala Sitharaman's statement that the Centre would release double
the monthly amount of tax devolution -- a total of Rs 95,082 crore -- in
November to enable the states to step up their capex and spur economic growth
close to double digits this fiscal year. Meanwhile, the Reserve Bank of India
(RBI) remained net buyer of the US currency in September 2021, after it
purchased $791 million on the net basis from the spot market. The monthly RBI
bulletin for November 2021 showed in the reporting month, the central bank had
bought $9.169 billion and sold $8.378 billion in the spot market. There will be
some reaction in aviation industry stocks with a private report stating that
with a surge in domestic air passenger traffic, the airfares have risen by 30
per cent to 100 per cent of the pre-pandemic levels amid the festive season.
Besides, Tarsons Products IPO sailed through on the first day of sale on
Monday. The public issue of the company saw massive interest from retail
investors who subscribed their portion of the issue 2.12 times.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
18,109.45
|
18,050.45
|
18,189.30
|
BSE Sensex
|
60,718.71
|
60,531.86
|
60,971.06
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Oil
& Natural Gas Corporation
|
457.50
|
158.45
|
155.55
|
161.80
|
ITC
|
387.55
|
238.15
|
234.50
|
240.40
|
Coal
India
|
194.00
|
159.70
|
156.94
|
165.04
|
Power
Grid Corporation of India
|
186.16
|
187.70
|
183.55
|
190.30
|
Tata
Motors
|
180.14
|
504.65
|
501.14
|
511.54
|
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