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NSE Intra-day chart (15 November 2022)
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Market Commentary 16 November 2022
Benchmarks to make cautious start on lackluster Asian cues

 

Indian equity benchmarks ended in green in a volatile trading session on Tuesday led by buying in Oil & Gas, Telecom and Auto stocks amid favorable global cues. Both the indices, Sensex and Nifty, had opened higher but soon pared gains and turned red even as the government data showed that retail inflation dropped to 6.77 per cent in October from 7.41 per cent in the preceding month, mainly due to easing prices in the food basket, though it remained above Reserve Bank's comfort level for the 10th month in a row. Some concern also came as Petroleum and Natural Gas Minister Hardeep Singh Puri said the Centre is ready for bringing petrol and diesel under the GST regime but it is unlikely that the states will agree to such a move. Sentiments remained weak amid a private report stating that Indian businesses are likely to increase their spending on information technology slightly in 2023 amid the looming tensions on inflation and economic slowdown. India's overall IT spending is projected to grow 2.6 per cent next year down from 22.1 per cent in 2021. However, markets reversed losses and inched higher in the last hour of trade tracking unabated foreign capital inflows. Foreign institutional investors (FIIs) have net bought shares worth Rs 1,089.41 crore on November 14, as per provisional data available on the NSE. Traders also found support with private report stating that India's retail inflation to track within the Reserve Bank of India's target band by March 2023. It expects inflation to moderate in FY24 as the effect of higher commodity prices wears off in YoY terms and supply chains continue to normalize. Further, as it expects a rise in capex in FY24, it expect this higher capacity to help cap further rise in core inflation pressures in FY25. Traders also took note of a World Bank's report stating that India will need to invest $840 billion over the next 15 years to upgrade its urban infrastructure if it is to effectively meet the needs of its fast-growing population in cities. Finally, the BSE Sensex rose 248.84 points or 0.40% to 61,872.99 and the CNX Nifty was up by 74.25 points or 0.41% to 18,403.40.

 

The US markets ended higher on Tuesday, with Nasdaq settling higher over one percent, following the release of a Labor Department report showing producer prices in the U.S. crept up by much less than expected in the month of October.  The Labor Department said its producer price index for final demand inched up by 0.2 percent in October, matching a revised uptick in September. Street expected producer prices to climb by 0.5 percent compared to the 0.4 percent increase originally reported for the previous month. The report also showed the annual rate of producer price growth slowed to 8.0 percent in October from 8.4 percent in September. The year-over-year growth was expected to edge down to 8.3 percent. The strength on markets also came amid a surge by shares of Walmart, with the retail giant spiking by 6.5 percent.  The jump by Walmart came after the company reported better than expected third quarter results and announced a $20 billion share buyback. However, markets pulled back well off their best levels of the day following reports Russian missiles crossed into Poland, killing two people. On the sectoral front, semiconductor stocks turned in some of the market's best performances on the day, with the Philadelphia Semiconductor Index spiking by 3.0 percent to its best closing level in well over two months. Taiwan Semiconductor (TSM) posted a standout gain on news Warren Buffett's Berkshire Hathaway has bought more than $4.1 billion of the chipmaker's stock. Significant strength also remained visible among housing stocks, as reflected by the 2.0 percent surge by the Philadelphia Housing Sector Index.

 

Crude oil futures ended higher on Tuesday after reports that oil supply to Hungary via the Druzhba oil pipeline has been temporarily suspended due to a fall in pressure. Further, oil prices were also supported by comments from the International Energy Agency (IEA) that the European Union ban on seaborne Russian crude will results in a likely loss of 1.1 million barrels per day. Benchmark crude oil futures for December delivery rose $0.94 or about 1.09 percent at $86.81 a barrel on the New York Mercantile Exchange. Brent crude for January delivery surged $0.72 or about 0.77 percent to settle at $93.86 a barrel on London's Intercontinental Exchange.

 

Indian rupee appreciated against US dollar on Tuesday, on the back of positive domestic macroeconomic data and selling of the American currency by exporters. Traders got encouragement as India's retail inflation measured in Consumer Price Index (CPI) dropped to 6.77 per cent in October 2022 from 7.41 per cent in the preceding month. The retail inflation, which the RBI factors in while deciding its periodic monetary policy, was 4.48 per cent in October 2021. Traders ignored reports that India's exports dip to $29.78 billion in October 2022 from $35.73 billion a year ago. Besides, trade deficit widened to $26.91 billion as against $17.91 billion a year ago. On the global front, euro, sterling and Swedish crown rose against the U.S. dollar on Tuesday as traders assessed a slew of economic data, including UK and euro zone job figures plus German economic sentiment. Finally, the rupee ended at 81.11 (Provisional), stronger by 17 paisa from its previous close of 81.28 on Monday.

 

The FIIs as per Tuesday's data were net buyers in both equity and debt segment. In equity segment, the gross buying was of Rs 23284.22 crore against gross selling of Rs 20290.88 crore, while in the debt segment, the gross purchase was of Rs 240.56 crore against gross selling of Rs 157.29 crore. Besides, in the hybrid segment, the gross buying was of Rs 37.27 crore against gross selling of Rs 13.24 crore.

 

The US markets ended higher on Tuesday as investors seized on softer-than-expected inflation data that raised hopes of a pullback in rate hikes by the US Federal Reserve. Asian markets are trading mixed on Wednesday amid reports that said Russian missile attacks killed two people in a Polish village near the Ukraine border. Indian markets ended higher with gains of around 0.40% each on Tuesday propped up by robust fag-end buying in banking and energy stocks amid a positive trend in global equities. Today, markets are likely to get cautious start tracking weakness in Asian peers. Traders will be concerned as data released by the commerce ministry showed that India's merchandise trade deficit widened to $26.91 billion in October as exports crashed by 17 percent year-on-year to $29.78 billion while imports rose by 6 percent. The trade deficit stood at $17.91 billion in October 2021. Some cautiousness will come as foreign institutional investors (FIIs) have net offloaded shares worth Rs 221.32 crore on Tuesday, according to the provisional data available on the NSE. Besides, Moody's gave a negative outlook to credit worthiness of countries globally for 2023, saying high prices of food and energy would curb economic growth and raise social tensions. However, some respite may come later in the day as the Central Board of Direct Taxes (CBDT) chairman Nitin Gupta said direct tax collections are likely to be 25-30% more than the budget estimate (BE) of Rs 14.2 trillion for the current fiscal. There will be some buzz in the banking stocks as Crisil in a report said riding on a broad-based economic recovery and stronger, cleaner balance sheets, lenders are expected to see their credit growing at 15 per cent this fiscal and the next. Mineral industry stocks will be in focus as the mines ministry's report showed that the nation's mineral production increased by 4.6 per cent in September compared to the same month last year. There will be some reaction in aviation industry stocks as IATA executive said India is among the countries that has the largest potential to produce Sustainable Aviation Fuel (SAF), which will be a key enabler for the global airlines industry in reducing emissions. Meanwhile, Medanta operator Global Health and FMCG major Bikaji Foods International will debut on the bourses today. The issue price for the two is fixed at Rs 336 per share and Rs 300 apiece, respectively.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

18,403.40

18,314.29

18,460.24

BSE Sensex

61,872.99

61,554.60

62,073.66

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Steel

350.07

108.50

107.35

109.50

Oil and Natural Gas Corporation

246.36

142.40

140.49

143.84

Coal India

202.25

232.55

229.15

237.40

ITC

154.51

345.50

340.11

349.91

ICICI Bank

151.76

913.20

903.45

918.30

 

  • Adani Ports and Special Economic Zone has incorporated a joint venture company with Gadot Chemical Terminals (1985) in Israel namely Mediterranean International Ports A.D.G.D.
  • ONGC has reported fall of 63.57% in its consolidated net profit at Rs 6830.16 crore for Q2FY23 as compared to Rs 18749.16 crore for Q2FY22. 
  • Tata Motors and Cummins Inc have joined hands to offer solutions in the hydrogen-powered commercial vehicle space.
  • HDFC is planning to raise up to Rs 5,500 crore by issuing bonds on private placement basis to shore up its resources.
News Analysis