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NSE Intra-day chart (16 December 2021)
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Market Commentary 17 December 2021
Benchmarks likely to make flat-to-negative start amid weak global cues

 

Indian equity benchmarks ended a volatile session marginally higher on Thursday in a rebound after four days of losses. Indices witnessed a gap up opening, mirroring the positive overseas cues. Traders took encouragement with a private report stating that the New Year will herald the return of normalcy and witness the growth momentum gaining steam, and pegged the real GDP growth estimate at 8.2 per cent for FY2022-23. Some optimism also came as an article on the state of the economy published in RBI Bulletin said that upbeat high-frequency indicators and consumer confidence show that the Indian economy continues to forge ahead, emerging out of shackles of the pandemic. It said the recovery is spearheaded by an uptick in private investment through November-December alongside a turnaround in bank credit offtake and high capex from the government sector (Centre and States). However, indices witnessed volatility and erased almost all their gains in afternoon deals, amid Omicron concerns. State Health Minister Veena George said four more cases of Covid-19 variant Omicron have been confirmed in Kerala. With this the total cases of the variant in Kerala has reached 5 and in India -73. Some cautiousness also came in as IMF Chief Economist Gita Gopinath said that as the global economy recovers from the pandemic, a great deal of uncertainty remains about new COVID-19 variants and increased inflation pressures in many countries.  But, key gauges managed to end in positive territory after fighting bouts of volatility, taking support from  after Prime Minister Narendra Modi said that the Union cabinet's decision on designing and manufacturing semiconductor chips in India would encourage research and innovation, boost manufacturing and help fulfil the dream of Atmanirbhar Bharat. Finally, the BSE Sensex rose 113.11 points or 0.20% to 57,901.14 and the CNX Nifty was up by 27.00 points or 0.16% to 17,248.40.

 

The US markets ended lower on Thursday amid weakness among large tech stocks. The pull back on Wall Street came as traders continued to digest the Federal Reserve's highly anticipated monetary policy announcement on Wednesday. The Fed announced its widely expected decision to accelerate the pace of tapering its asset purchases and forecast as many as three interest rate hikes next year. While some stocks benefited from reduced uncertainty about the outlook for monetary policy, high-growth tech stocks fell sharply amid concerns about the impact of higher interest rates. Traders were also reacting to a slew of US economic data, including a Labor Department report showing a modest rebound in first-time claims for unemployment benefits in the week ended December 11th. The Labor Department said initial jobless claims rose to 206,000, an increase of 18,000 from the previous week's revised level of 188,000. Street had expected jobless claims to inch up to 195,000 from the 184,000 originally reported for the previous week. Meanwhile, the Fed also released a report showing US industrial production increased by less than expected in the month of November. The report said industrial production rose by 0.5 percent in November after surging by an upwardly revised 1.7 percent in October. Street had expected industrial production to climb by 0.7 percent compared to the 1.6 percent jump originally reported for the previous month.

 

Crude oil futures ended sharply higher on Thursday, extending their previous session's gains, supported by record US implied demand and dropping crude stockpiles, even as the spread of the Omicron coronavirus variant threatens to put a brake on consumption globally.  Demand has been rising in 2021 after last year's collapse, and the US Energy Information Administration (EIA) said product supplied by refineries, a proxy for demand, surged in the latest week to 23.2 million barrels per day (bpd). Further, the dollar's weakness against other major currencies amid easing uncertainty about tapering of the asset-purchase program and interest rate hikes contributed as well to oil's uptick. Benchmark crude oil futures for January delivery rose $1.51 or about 2.1 percent to settle at $72.38 a barrel on the New York Mercantile Exchange. Brent crude for February delivery gained $0.80 or 1.1 percent to settle at $74.68 a barrel on London's Intercontinental Exchange.   

 

Reversing previous session drubbing, Indian rupee ended significantly higher against dollar on Thursday as the U.S. Federal Reserve's decision to end its bond-buying programme in March signalled confidence in an economic recovery from pandemic-induced shock. Traders also took encouragement with a private report stating that the New Year will herald the return of normalcy and witness the growth momentum gaining steam, and pegged the real GDP growth estimate at 8.2 per cent for FY2022-23. On the global front, euro and sterling edged higher on Thursday ahead of Bank of England and European Central Bank monetary policy meetings, a day after the U.S. Federal Reserve unveiled its tightening plans. Finally, the rupee ended 76.09 (Provisional), stronger by 23 paise from its previous close of 76.32 on Wednesday.

 

The FIIs as per Thursday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 5894.37 crore against gross selling of Rs 8545.60 crore, while in the debt segment, the gross purchase was of Rs 308.02 crore against gross selling of Rs 1068.55 crore. Besides, in the hybrid segment, the gross buying was of Rs 4.38 crore against gross selling of Rs 7.27 crore.

 

The US markets ended lower on Thursday as investors considered moves by other global central banks such as Bank of England that became first major bank to raise interest rates. Asian markets are trading mostly in red on Friday following overnight losses on Wall Street. Indian markets snapped four-day losing streak on Thursday. Today, the start of session is likely to be flat-to-negative tracking weakness in global markets coupled with uncertainty surrounding the Omicron variant. Traders will be concerned with the Centre for Monitoring Indian Economy's statement that the consumer sentiment index in November is far below the pre-pandemic levels though better than November last year, suggesting the economic recovery is excruciatingly slow and uninspiring. Also, foreign fund outflow likely to weigh on domestic markets. As per provisional data available on the NSE, Foreign institutional investors (FIIs) net sold shares worth Rs 1,468.71 crore. There will be some cautiousness with a private report stating that India's growth recovery has been led by capital expenditure push by the government so far, but fiscal constraints might prove to be a challenge going forward in terms of driving investments. However, some support may come later in the day with a private report that advance tax collections in the third quarter of the fiscal year almost doubled from the year-earlier period, underscoring hopes of a sustained economic recovery amid the threat from the Omicron Covid-19 variant. Meanwhile, Union Finance Minister Nirmala Sitharaman will chair pre-budget consultations with stakeholders from various sectors in two sessions in the national capital in connection with the forthcoming general budget 2022-23 on Friday. Banking stocks will be in focus amid reports that banking services, especially at branches across the country, have been hit hard following the commencement of a two-day strike by about 900,000 employees to protest against privatisation of public sector banks. There will be some reaction in metal stocks as Mines Secretary Alok Tandon said India's iron ore production has surged to 143 million tonnes (MT) in the first seven months of the ongoing fiscal, and the country is all set to surpass the record production of 246 MT achieved in 2019-20. Cement companies stocks will be in limelight as ratings agency ICRA said rise in input costs for cement manufacturers is expected to hit the sector's overall operating margins by 200-230 basis points in FY22. Shares of RateGain Travel Technologies will start trading on the stock exchanges today. The Rs 1,335 crore IPO of RateGain Travel was well received by investors earlier this month with Non-Institutional Investors (NII) subscribing to the issue 42.02 times.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,248.40

17,162.45

17,356.85

BSE Sensex

57,901.14

57,610.44

58,264.53

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ITC

241.99

223.40

220.75

226.10

ICICI Bank

141.23

741.95

734.64

753.59

Tata Motors

135.81

492.05

487.46

496.56

Oil & Natural Gas Corporation

121.56

145.50

144.61

146.31

State Bank of India

111.07

482.00

476.65

488.95

 

  • Infosys has extended its digital innovation partnership with the Australian Open until the end of 2026. 
  • L&T's construction arm -- L&T construction has bagged a slew of orders both in India and overseas for its Power Transmission and Distribution business. 
  • Reserve Bank of India has slapped Rs 30 lakh fine on ICICI Bank. 
  • SBI has renewed its MoU with the Indian Army to offer specially crafted benefits to all serving and retired Army personnel and their families through its DSP Scheme.
News Analysis