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NSE Intra-day chart (17 December 2021)
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Market Commentary 20 December 2021
Markets to get negative start amid weak global cues

 

Friday turned out to be a dismal day of trade for Indian equity benchmarks with frontline gauges breaching their crucial 17,000 (Nifty) and 57,050 (Sensex) levels. After making cautious start, Indian equities extended their decline in morning deals, amid weak global cues coupled with uncertainty surrounding the Omicron variant. India reported 14 fresh Omicron cases on Thursday, taking the tally of patients contracting the highly infections coronavirus variant in the country to 87. Traders remain 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. Besides, continued foreign fund outflow dented sentiments in the markets. As per provisional data available on the NSE, Foreign institutional investors (FIIs) net sold shares worth Rs 1,468.71 crore. Selling got accelerated in second half of trade, as some anxiety remained among traders 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. Traders failed to get any sense of relief 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. Market participants also overlooked the Ministry of Commerce and Industry in its latest report has said that India registered the highest ever annual FDI Inflow of $ 81.97 billion (provisional) in the financial year 2020-21. The Ministry of Commerce and Industry noted that FDI inflow in the last 7 financial years (2014-21) is $ 440.27 billion, which is nearly 58% of the total FDI inflow in last 21 financial years (2000-21: $ 763.83 billion).  Finally, the BSE Sensex fell 889.40 points or 1.54% to 57,011.74 and the CNX Nifty was down by 263.20 points or 1.53% to 16,985.20.

 

The US markets closed a volatile session in red on Friday with notable losses on account of a quadruple witching day, with stock options, index options, stock futures and index futures all expiring. A lack of major US economic data may also have contributed to the choppy trading, as traders look ahead to next week's reports on consumer confidence, personal income and spending, durable goods orders and new and existing home sales.Traders also seem to be expressing conflicting reactions to the Federal Reserve's monetary policy announcement on Wednesday. The markets initially seemed relieved the Fed's move to accelerate the reduction in its asset purchases to $30 billion per month was not as aggressive as some had feared. The Fed's forecast for three interest rates hikes next year also eliminated some uncertainty, although traders now seem to be grappling with the reality of sooner-than-expected rate hikes. Concerns about the impact of the Omicron variant of the coronavirus also weighed on the markets along with worries about ongoing supply chain issues. On the sectoral front, banking stocks showed a substantial move to the downside on the day, dragging the KBW Bank Index down by 2.8 percent. Early in the session, the index hit its lowest intraday level in almost three months. Considerable weakness was also visible among oil stocks, as reflected by the 2.1 percent slump by the NYSE Arca Oil Index. The sell-off by oil stocks came amid a step drop by the price of crude oil, with crude for January delivery tumbling $1.52 to $70.86 a barrel. Pharmaceutical, housing and chemical stocks also saw significant weakness on the day, while notable strength was visible among biotechnology, airline and networking stocks.

 

Crude oil futures ended significantly lower on Friday amid worries about the spread of the omicron variant and its potential impact on fuel demand. France on Thursday imposed fresh restrictions on travelers from the U.K. in response to the spread of the omicron variant. The U.S. is reporting more than 120,000 new cases of COVID-19 a day, up more than 40% from two weeks ago. According to a report from Baker Hughes, the number of active drilling rigs in the United States rose by 3 this week. The report said the total rig count increased to 579, up 233 from a year ago. Rigs drilling for oil rose by 4 to 475 while gas rigs fell by 1 to 104. Benchmark crude oil futures for January delivery rose $1.52 or 2.1 percent to settle at $70.86 a barrel on the New York Mercantile Exchange. Brent crude for February delivery gained $1.50 or 2 percent to settle at $73.52 a barrel on London's Intercontinental Exchange.   

 

Indian Rupee ended stronger against dollar on Friday due to fresh selling of the American currency by banks and exporters. Traders got some support as Ministry of Commerce and Industry in its latest report has said that India registered the highest ever annual FDI Inflow of $81.97 billion (provisional) in the financial year 2020-21. However, upside remain capped amid acceleration of bond-buying programmes by various central banks to fight off inflation and suck excess liquidity out of the system. After the US Fed, the European Central Bank and the Bank of Japan have decided to hasten the asset purchase programmes. Besides, losses in local equity market also hit the rupee sentiment. On the global front, dollar remained under pressure at the end of a week in which major central banks laid out plans to unwind pandemic-era stimulus, with the Bank of England surprising markets with a rate hike. Finally, the rupee ended 76.06 (Provisional), stronger by 3 paise from its previous close of 76.09 on Thursday.

 

The FIIs as per Friday's data were net sellers in both equity and debt segment. In equity segment, the gross buying was of Rs 8013.36 crore against gross selling of Rs 8496.88 crore, while in the debt segment, the gross purchase was of Rs 179.38 crore with gross sales of Rs 790.57 crore. Besides, in the hybrid segment, the gross buying was of Rs 1.84 crore against gross selling of Rs 14.05 crore.

 

The US markets ended lower on Friday amid rising worries about the economic impact of the Omicron variant of COVID-19. Asian markets are trading in red on Monday as surging Omicron cases triggered tighter restrictions in Europe and threatened to drag on the global economy into the new year. Indian markets tumbled 1.5 percent to more than one-week closing lows on Friday, dragged by losses across sectors barring IT stocks. Today, the markets are likely to make negative start as global sentiment remains cautious amid rising Omircon coronavirus cases worldwide. India's Omicron COVID count rose to 151 on Sunday after Maharashtra reported six more cases. Traders will be concerned with continues foreign fun outflow. Foreign portfolio investors (FPIs) have pulled out Rs 17,696 crore from the Indian markets in December so far amid uncertainty due to a new coronavirus strain, Omicron, and expectations of faster tapering by the US Federal Reserve. There will be some cautiousness as a private report estimated 6.3 per cent real GDP expansion in FY23, among the lowest within the analyst community and stated that there is uncertainty on the growth trajectory. Also, RBI data showed declining for the third consecutive week, India's forex reserves dipped by $77 million to reach $635.828 billion for the week ended December 10. However, some respite may come later in the day with a report that after staging a strong recovery from COVID-induced slowdown in 2021, India's exports are likely to extend the growth story to the New Year also on increased demand in the global markets, boost in domestic manufacturing due to production-linked incentive schemes and implementation of some interim trade pacts. Some support may come with report that aided by revival of economic activities and better compliance, the Union government's advance direct tax collections from companies, LLPs and individuals rose 50% on year to about Rs 2.1 lakh crore in Q3FY22, even as a favouarble base effect waned. Meanwhile, Commerce Minister Piyush Goyal has exuded confidence that negotiations for a free trade agreement between India and the UK would be launched next month and with Canada by March-April. There will be some buzz in the textile industry stocks as Trade body Cotton Association of India (CAI) estimated cotton arrival for the month of November at 77 lakh bales. Sugar stocks will be in focus as Food Secretary Sudhanshu Pandey ruled out hike in the minimum selling price of sugar from current Rs 31 per kg as domestic rates are higher and expressed confidence that exports will touch 50-60 lakh tonnes in the current marketing year starting October. Coal industry stocks will be in limelight with a private report that India's coal import registered a decline of 26.8 per cent to 15.75 million tonnes (MT) in October over the same month a year ago. Besides, Shares of Shriram Properties will list on the stock exchanges today.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

16,985.20

16,868.39

17,200.09

BSE Sensex

57,011.74

56,621.06

57,732.36

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Wipro

523.00

674.75

657.64

684.34

ITC

296.83

218.10

215.61

221.71

Tata Motors

273.41

470.20

462.65

483.30

Infosys

188.87

1823.00

1,805.84

1,841.09

Oil & Natural Gas Corporation

176.67

139.70

137.10

143.70

 

  • NTPC is all set to raise Rs 1175 crore, through unsecured NCDs on private placement basis at coupon of 6.74% p.a. with a door to door maturity of 10 years 3 months 25 days on April 14, 2032. 
  • Bharti Airtel is all set to acquire additional upto 2.86% stake in Vahan Inc. 
  • ICICI Bank has on-boarded 70 leading companies on CorpConnect, the digital platform that it launched last year to enable corporates to undertake instant payments and collections to/from their channel partners. 
  • HDFC has sold 26,80,000 shares representing 4.51% of the paid-up share capital of Ansal Housing, which includes sale of 21,50,000 shares representing 3.62% of the paid-up share capital of Ansal done on December 15, 2021.
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