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NSE Intra-day chart (23 December 2021)
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Market Commentary 24 December 2021
Markets likely to open in green amid positive global cues

 

Extending rally for third straight session, Indian equity benchmarks ended the Thursday's trade above their crucial 57,300 (Sensex) and 17,050 (Nifty) levels, as investors cheered to studies about omicron reduced risk of hospitalization and severe disease with omicron compared to delta. Traders took some support with report that the I-T department said income tax refunds of over Rs 1.44 lakh crore have been issued to 1.38 crore taxpayers so far this fiscal. This includes 99.75 lakh refunds of Assessment Year (AY) 2021-22 (fiscal ended March 31, 2021) amounting to Rs 20,451.95 crore. Market participants also took some solace with MPC minutes released by the central bank showing that RBI Governor Shaktikanta Das pitched for continued policy support to nurture revival in sectors especially those which are exposed to the evolving headwinds in the wake of spread of Omicron variant of Covid. Markets extended gains as additional support came after rating agency ICRA said that profitability of sugar, fertiliser and dairy sectors will remain stable in FY22, with only three months left to close the financial year 21-22. Traders also got some support after Commerce and Industry Minister Piyush Goyal has pitched for simplicity with an aim to formulate measures to improve ease of living, doing business and reduce the compliance burden. He also called for the creation of a single identification number for businesses and individuals by merging several identification numbers that exist presently, such as Aadhaar, PAN and TAN, so that delivery of services becomes smoother and faster. Meager profit booking witnessed in later part of the trade but, market participants went home with a decent gains shrugging off private report that Indian Consumer Price Index could rise as much as 150 basis points putting pressure on the central bank, if the GST council chooses to raise rates for many goods in line with the recommendations of the finance commission. Finally, the BSE Sensex gained 384.72 points or 0.68% to 57,315.28 and the CNX Nifty was up by 117.15 points or 0.69% to 17,072.60.

 

The US markets ended higher on Thursday, extending the strong upward move seen over the two previous sessions, on easing concerns about the Omicron variant of the coronavirus.  Separate studies have indicated the new strain poses a lower risk of severe disease and hospitalization than the Delta variant. Traders were also reacting to a slew of U.S. economic data, including reports on weekly jobless claims, durable goods orders and personal income and spending. The Labor Department released a report before the start of trading showing first-time claims for US unemployment benefits came in flat in the week ended December 18th. The report said initial jobless claims were unchanged from the previous week's revised level of 205,000. Street had expected jobless claims to edge down to 205,000 from the 206,000 originally reported for the previous week. A separate report released by the Commerce Department showed new orders for US manufactured durable goods spiked much more than expected in the month of November. The Commerce Department said durable goods orders surged up by 2.5 percent in November following a revised 0.1 percent uptick in October. Street expected durable goods orders to jump by 1.6 percent compared to the 0.4 percent drop that had been reported for the previous month. On the sectoral front, Tobacco stocks skyrocketed over the course of the session, driving the NYSE Arca Tobacco Index up by 4.1 percent to its best closing level in a month. Significant strength was also visible among transportation stocks, as reflected by the 1.4 percent gain posted by the Dow Jones Transportation Average.

 

Crude oil futures ended higher for third straight day on Thursday as signs that the worst effects of the Omicron variant might be more containable than previously feared were countered by new COVID-19 restrictions amid surging infections.  Meanwhile, Novavax Inc's Covid-19 vaccine is effective in generating an immune response against the Omicron variant. Other Covid-19 vaccine manufacturers, including Pfizer Inc. and Moderna Inc., also reported increased immune responses to Omicron. Benchmark crude oil futures for February delivery rose $1.03 or 1.4 percent to settle at $73.79 a barrel on the New York Mercantile Exchange. Brent crude for February delivery surged $1.36 or 1.81 percent to settle at $76.64 a barrel on London's Intercontinental Exchange. 

 

Indian rupee ended significantly higher against dollar on Thursday, on selling of American currency by banks and exporters and positive trend in domestic equities. Traders cheered studies showing that omicron reduced risk of hospitalization and severe disease with omicron compared to delta. Market participants also took some support with report that the I-T department said income tax refunds of over Rs 1.44 lakh crore have been issued to 1.38 crore taxpayers so far this fiscal. This includes 99.75 lakh refunds of Assessment Year (AY) 2021-22 (fiscal ended March 31, 2021) amounting to Rs 20,451.95 crore. On the global front, dollar languished near an almost one-week low against its major peers on Thursday as investors adopted a more optimistic stance about the global economic outlook, despite the rapid spread of the Omicron coronavirus variant. Finally, the rupee ended 75.26 (Provisional), stronger by 28 paise from its previous close of 75.54 on Wednesday.

 

The FIIs as per Thursday's data were net sellers in equity segment, while net buyers in debt segment. In equity segment, the gross buying was of Rs 6142.59 crore against gross selling of Rs 6605.80 crore, while in the debt segment, the gross purchase was of Rs 619.80 crore against gross selling of Rs 302.74 crore. Besides, in the hybrid segment, the gross buying was of Rs 2.24 crore against gross selling of Rs 2.55 crore.

 

The US markets ended higher on Thursday as investors and traders were optimistic about positive economic data and discounted the impact of the Omicron coronavirus variant on the economy, even as COVID-19 case counts soar. Asian markets are trading mostly in green on Friday following Wall Street's overnight rally. Indian markets extended gains to a third straight day on Thursday, backed by buying across most sectors. Today, markets are likely to open in green for yet another day following firm global cues. Traders will be getting encouragement with a private report that India can generate $813 billion in revenue creating 152 million jobs, with an investment of $272 billion in agritech and allied segments by 2030, making it the largest private sector industry in the country. Traders may take note of Jayant Sinha, Chairperson, Parliament Standing Committee on Finance's statement that the government is working to bring changes in the GST Act and other public platforms so that companies can utilise data to grow big in size and scale. However, traders may be concerned as the Federation of Indian Export Organisations (FIEO) said India's exports growth may slow to 15-17.5% in FY23 but containment of Covid-19 through massive vaccination across the globe and creation of required capacity will be the decisive factors. There may be some cautiousness with the Centre for Monitoring Indian Economy's statement that the outbreak of pandemic has led to an increase in the number of households with no earning members making them more vulnerable to the pandemic. Meanwhile, a key government panel has suggested amendments to the Insolvency and Bankruptcy Code including provisions related to time period taken for approval of resolution plans, avoidable transactions and wrongful trading. Oil & gas industry stocks will be in focus as data on the website of the Petroleum Planning and Analysis Cell (PPAC) showed India's crude oil imports in November rose to their highest level in 10 months as refiners stocked up to boost runs in anticipation of strong demand in the world's third-largest oil consumer and importer. There will be some reaction in hospitality industry related stocks with private report that the Indian hospitality industry, battered by the pandemic, is on alert mode but not panicking yet in the face of the Omicron variant threatening to derail prospects of winter holiday season business. Aviation industry stocks will be in limelight with report that the Indian aviation industry was able to breathe a little easier in 2021 as domestic flight operations reached their pre-pandemic levels even though international services continued to remain curtailed due to Covid-related travel restrictions. Shares of Data Patterns (India) will list on the stock exchanges today. The Rs 588 crore IPO (Initial public offering) of the company was heavily oversubscribed earlier this month.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,072.60

17,019.21

17,122.31

BSE Sensex

57,315.28

57,144.20

57,488.44

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

ITC

222.09

217.40

214.25

219.50

State Bank of India

144.71

460.70

457.30

464.55

Tata Motors

121.16

472.25

469.46

476.51

Power Grid Corporation of India

119.49

208.95

204.14

211.69

Indian Oil Corporation

102.85

112.35

110.55

113.30

 

  • Tata Motors has incorporated a wholly owned subsidiary, viz., Tata Passenger Electric Mobility. 
  • Indian Oil Corporation has bid for maximum number of licenses to retail CNG to automobiles and piped cooking gas to households in the latest city gas bidding round. 
  • Hero MotoCorp is all set to make an upward revision in the ex-showroom prices of its motorcycles and scooters, with effect from January 4, 2022. 
  • Kotak Mahindra Bank's subsidiary company -- Kotak Mahindra Prime has acquired the passenger vehicle finance portfolio of Ford Credit India.
News Analysis