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NSE Intra-day chart (20 December 2021)
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Market Commentary 21 December 2021
Benchmarks may start session on positive note following Asian peers

 

Monday turned out to be a nightmarish session of trade for Indian equity benchmarks where frontline gauges shaved off over two percentage point to end below their crucial 55,900 and 16,650 levels as concerns over rising Omicron cases spooked investors' sentiment. India's Omicron Coronavirus (Covid-19) count rose to 151 on December 19 after Maharashtra recently reported six more cases. Markets extended losses as sentiments remain dented on continuous foreign fund 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. Sentiments remain dampened 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. Markets staged some recovery in last leg of trade, although ended with deep cut, after the Retailers Association of India (RAI) in its latest report has showed that retail sales in India in November grew by 9 per cent over the pre-pandemic levels of the same month in November 2019. The industry body RAI further said that West India signaled 11 per cent increase, followed by East and South India at 9 per cent while North India indicated a growth of 6 per cent each as compared to sales levels in November 2019. Meanwhile, advance tax collection increased by 53.50 per cent to Rs 4,59,917.1 crore as on December 16, 2021 for the first, second and third quarter of 2021-22, against advance tax collections of Rs 2,99,620.5 crore for the corresponding period of 2020-21. Besides, dues on the listing fees against a company are 'regulatory dues' in nature and cannot be recovered under 'operational debt' through insolvency proceedings, said the National Company Law Appellate Tribunal (NCLAT) while dismissing an appeal by stock exchange BSE. Finally, the BSE Sensex fell 1189.73 points or 2.09% to 55,822.01 and the CNX Nifty was down by 371.00 points or 2.18% to 16,614.20.

 

The US markets ended lower with cut of over one percent on Monday as rapidly spreading Omicron variant of the coronavirus raised concerns about global economic recovery. The spread of the Omicron variant could also lead to further global supply chain issues, which have contributed to elevated inflation. The omicron variant is raging across to the world as the winter holiday season approaches. US cases are jumping into year-end with more than 156,000 reported on Friday. The strain has been found through testing in 43 out of 50 US states and around 90 countries, and the number of cases is doubling in 1.5 to 3 days in areas with community transmission, according to the World Health Organization. Several countries, including France and Austria have tightened travel restrictions. Paris canceled its New Year's Eve firework celebration, while Germany, which has ruled out a Christmas lockdown, has warned a fifth wave could no longer be stopped. Besides, concerns about the deadlock over US President Joe Biden's $1.75 trillion investment bill also weighed on sentiment. Sen. Joe Manchin, a conservative Democrat from West Virginia, said over the weekend that he won't support the Biden administration's Build Back Better plan.

 

Crude oil futures ended sharply lower on Monday as surging cases of the Omicron coronavirus variant in Europe and the United States stoked investor worries that new restrictions to combat its spread could dent fuel demand. Several countries, including France and Austria, have already imposed stricter rules for travelers to curb the rising wave of infections. Meanwhile, French Prime Minister Jean Castex has warned that the Omicron variant is spreading at lightning speed and that it should be the dominant variant by the start of next year. The country has imposed restrictions on travelers from the United Kingdom. Benchmark crude oil futures for January delivery fell $2.63 or 3.7 percent to settle at $68.23 a barrel on the New York Mercantile Exchange. Brent crude for February delivery dropped $2 or 2.7 percent to settle at $71.52 a barrel on London's Intercontinental Exchange. 

 

Indian rupee ended stronger against dollar on Monday due to fresh selling of the American currency by banks and exporters. This is the third consecutive session when the rupee is traded higher against dollar. Sentiments were upbeat as signaling improvement in business albeit worries around Omicron variant spread and the third wave of the pandemic, the Retailers Association of India (RAI) in its latest report has showed that retail sales in India in November grew by 9 per cent over the pre-pandemic levels of the same month in November 2019. Massive sell-offs in domestic equities, sustained foreign fund outflows and concerns around Omicron variant of coronavirus were a host of factors restricting rupee gains. On the global front, British pound slipped to a three-day low on Monday, nearing $1.32 versus the greenback as a broad risk-off mood swept through financial markets. Finally, the rupee ended 75.90 (Provisional), stronger by 16 paise from its previous close of 76.06 on Friday.

 

The FIIs as per Monday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 13936.05 crore against gross selling of Rs 14776.05 crore, while in the debt segment, the gross purchase was of Rs 810.68 crore with gross sales of Rs 745.29 crore. Besides, in the hybrid segment, the gross buying was of Rs 48.17 crore against gross selling of Rs 71.63 crore.

 

The US markets ended lower on Monday pressured lower by surging Omicron coronavirus cases and a possible fatal blow to a $1.75 trillion U.S. domestic spending bill. Asian markets are trading in green on Tuesday as investors assessed the impact of the Omicron variant of COVID-19 on the world economy. Indian markets tumbled more than two percent each to four-month closing lows on Monday, tracking a global sell-off amid rising cases of the Omicron variant of COVID-19. Today, the start of session is likely to optimistic tracking gains in other Asian counterparts. Traders will be taking encouragement as a Commerce Ministry official said Indian exports showed a turnaround after December last year and are still going strong. Some support will come as Prime Minister Narendra Modi assured India Inc that the government would focus on reducing the compliance burden while exhorting the top companies to make full use of the production-linked incentive (PLI) scheme. During the pre-Budget deliberations with corporate leaders, he said the government is fully committed to taking initiatives with a view to give impetus to the economic progress of the country. Additionally, the Asian Development Bank (ADB) will provide $350 million loan to improve access to urban services in India by accelerating policy actions and reforms to enhance service delivery and promote performance-based central fiscal transfers to urban local bodies (ULBs). However, traders may be concerned as Amit Mitra, West Bengal's former finance minister and current chief advisor to Chief Minister Mamata Banerjee, said he fears India may be heading towards stagflation. He added India is already suffering from rising inflation and unemployment simultaneously. Some cautiousness may be come with report that Formal job creation in the country slowed down in October with 1.27 million new jobs added under the Employees' Provident Fund Organisation. This is the lowest after July when 1.23 million subscribers were added. Net new additions under EPFO stood at 1.36 million in August and 1.54 million in September. Traders may take note of report that the Organisation for Economic Co-operation and Development (OECD) released the model rules, paving the way for the roll out of the new global tax regime that will subject multinational corporations to a minimum tax of 15% from 2023. Edible oil industry stocks will be in focus as the government extended by one year the free import policy for refined bleached deodorised palm oil, and refined bleached deodorised palmolein to December 31, 2022 but retained a clause that the import is not permitted through any port in Kerala. Besides, Shares of CE Info Systems (MapMyIndia) will list on the stock exchanges today.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

16,614.20

16,402.90

16,832.80

BSE Sensex

55,822.01

55,123.75

56,529.22

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ITC

373.40

212.50

209.45

215.90

Tata Motors

330.07

445.55

437.04

457.04

State Bank of India

223.36

450.90

441.26

462.26

Oil & Natural Gas Corporation

172.38

134.40

131.49

137.49

Power Grid Corporation of India

169.04

209.70

207.25

212.40

 

  • Cipla has received approval from the USFDA to market the Lanreotide injection in the American market. 
  • ITC has bought 8.70% equity stake in Mother Sparsh Baby Care, a D2C Ayurvedic and natural personal care brand. 
  • Axis Bank is planning to raise Rs 5000 crore by issuing Senior Unsecured Taxable Redeemable NCDs (Series - 6). 
  • SBI is celebrating its centenary year in the UK with the launch of a new Namaste UK account.
News Analysis