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NSE Intra-day chart (27 December 2021)
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Market Commentary 28 December 2021
Benchmarks to open in green amid positive global cues

 

Indian equity benchmarks staged a splendid recovery on Monday's trade to end the session near intraday highs with frontline gauges ending above their crucial 57,400 (Sensex) and 17,050 (Nifty) levels. Markets made a pessimistic start as sentiment remained weak as several states such as Delhi, Karnataka, and Maharashtra enforce new restrictions in view of rising Covid-19 cases. Traders were concerned with a private report as it has penciled in an 8.2 per cent GDP growth next fiscal, with more downside risks to the projection, warning that the New Year will be riskier than the previous two in terms of growth, inflation and the perils of monetary policy normalisation on consumption demand in particular, along with other external risks. Meanwhile, investments in Indian capital market through participatory notes (P-notes) dropped to Rs 94,826 crore till November-end after hitting 43-month high in the preceding month. However, markets took U-turn and staged a decent comeback as traders opted to buy beaten down but fundamentally strong stocks. Traders took some support after a member of the Monetary Policy Committee (MPC) of the Reserve Bank, Jayanth R Varma expressed hope that in a few quarters from now, capital investment would begin to pick up even in the old economy, and said the next fiscal year is also expected to witness a decent growth. Traders took note of report that the GST regime will see a host of tax rate and procedural changes coming into effect from January 1, including liability on e-commerce operators to pay tax on services provided through them by way of passenger transport or restaurant services. Markets extended gains to end near intraday highs amid reports that Indian companies have mopped up more than Rs 9 lakh crore through equity and debt routes in 2021 to meet their renewed thirst for business expansion in a buoyant stock market brimming with liquidity and helped by recovering macroeconomic indicators after pandemic-ravaged first few months. Adding to the optimism, rating agency ICRA has said that the recent improvement in recovery of the non-performing assets (NPAs) and decline in provisioning of loans in the banking sector are expected to improve further in the coming year. Finally, the BSE Sensex gained 295.93 points or 0.52% to 57,420.24 and the CNX Nifty was up by 82.50 points or 0.49% to 17,086.25.

 

The US markets ended in green on Monday as markets reopened after the Christmas holiday and investors assessed the spread of the omicron Covid-19 variant. The continued strength on markets came amid easing concerns about the economic impact of the Omicron variant of the coronavirus. While Omicron seems to be more transmissible, the new strain purportedly causes milder symptoms and could potentially accelerate the end of the pandemic. On the sectorol front, semiconductor stocks showed a substantial move to the upside on the day, driving the Philadelphia Semiconductor Index up by 2.7 percent to a new record closing high. Significant strength was also visible among networking stocks, as reflected by the 2.4 percent jump by the NYSE Arca Networking Index. The index has also reached a new record closing high. However, Airline stocks fell after a holiday weekend that saw thousands of flights canceled due to Covid-related issues. The omicron variant led to a staffing shortage at a time when airlines were looking to ramp up their schedules to meet high travel demand. Delta Air Lines, United Airlines and American Airlines all closed lower.

 

Crude oil futures ended higher on Monday amid hopes the Omicron variant of the coronavirus will not any significantly impact global economic recovery. However, prices drifted lower earlier in the day, reacting to news about cancellation of over 1,300 flights by the US airlines over the weekend. According to reports, airlines across the world cancelled nearly 8,000 flights over the three-day Christmas weekend due to the spread of the Omicron variant. In the United States, the Omicron variant's daily cases have breached those of the Delta wave. Meanwhile, Britain, where Omicron is the dominant variant, has been reporting more than 100,000 cases in a single day. France has also reported cases above that figure for the first time. Benchmark crude oil futures for February delivery rose $1.78 or 2.4 percent to settle at $75.57 a barrel on the New York Mercantile Exchange. Brent crude for February delivery surged $2.37 or 3.1 percent to settle at $78.16 a barrel on London's Intercontinental Exchange.

 

Continuing gaining rally, Indian rupee strengthened marginally against dollar on Monday, owing to dollar sale by exporters and banks. Sentiments were positive as a member of the MPC of the Reserve Bank, Jayanth R Varma expressed hope that in a few quarters from now, capital investment would begin to pick up even in the old economy, and said the next fiscal year is also expected to witness a decent growth. However, upside remained capped as country's foreign exchange reserves declined by $160 million to stand at $635.667 billion in the week to December 17. During the reporting week ended December 17, the dip in the forex kitty was on account of a decline in foreign currency assets (FCAs), a major component of the overall reserves. On the global front, dollar was range bound, despite a hawkish turn at the Federal Reserve that saw policymakers signalling three quarter-point rate hikes next year. Finally, the rupee ended 75.00 (Provisional), stronger by 3 paise from its previous close of 75.03 on Friday.

 

The FIIs as per Monday's data were net sellers in both equity and debt segments. In equity segment, the gross buying was of Rs 2611.09 crore against gross selling of Rs 2843.93 crore, while in the debt segment, the gross purchase was of Rs 68.01 crore with gross sales of Rs 3764.11 crore. Besides, in the hybrid segment, the gross buying was of Rs 9.02 crore against gross selling of Rs 18.37 crore.

 

The US markets ended higher on Monday as strong US retail sales underscored economic strength and eased worries from Omicron-driven flight cancellations that hit travel stocks. Asian markets are trading mostly in green on Tuesday tracking record highs on Wall Street overnight following strong retail figures. Indian markets finished a volatile session higher on Monday led by financial, IT and healthcare stocks. Today, the markets are likely to start session in green mirroring firm global cues. Traders will be taking encouragement with report that India's exports in the first three weeks of December rose 36.20% on-year at $23.82 billion. Outbound shipments were 27.7% higher than the same period of 2019-20. Export excluding petroleum, oil and lubricants increased 28.08% over the corresponding period last year. However, there may be some cautiousness as the Centre extended the existing Covid-related restrictions in the country till January 31, 2022, in view of the rising cases of Covid-19 and Omicron variant in the country. On Monday, the number of Omicron cases in India rose to 578. Delhi and Maharashtra have reported 142 cases each. Traders may take note of a private report that spiralling prices pinched the pocket of consumer as edible oil, fuel and many other commodities turned dearer this year amid pandemic-induced disruptions but the inflationary pressure is anticipated to ease, though marginally, in the coming months. There will be some buzz in the auto stocks as to substitute India's petroleum imports, the government has advised automobile makers to start manufacturing flex-fuel vehicles and flex-fuel strong hybrid electric vehicles complying with BS-VI emission norms within six months. Telecom stocks will be in focus as the Department of Telecommunications (DoT) said commercial 5G services will be rolled out in 13 cities in India, including the metropolises, in 2022. Meanwhile, telecom service providers have demanded that the government keep 5G spectrum prices affordable to enable maximum industry participation. There will be some reaction in textile industry stocks despite demands from traders and states, the government is sticking to its decision to implement uniform goods and services tax (GST) rate at 12% on manmade fibre (MMF), MMF yarn, MMF fabrics and apparel from January 1, 2022. Banking stocks will be in limelight as the Centre-incorporated bad bank is likely to start operations from the second week of January, paving the way for a major clean-up of bad loans in the banking system. Besides, Supriya Lifescience shares will make their stock market debut on Tuesday, 28 December 2021. The Rs 700-crore IPO was subscribed 71.47 times. The IPO had a fresh issue of up to Rs 200 crore and an offer for sale of up to Rs 500 crore. It had a price range of Rs 265-274 per share.

 

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

 

Index

Previous close

Support

Resistance

NSE Nifty

17,086.25

16,908.95

17,187.80

BSE Sensex

57,420.24

56,804.87

57,773.80

 

Nifty Top volumes

 

Stock

Volume

Previous close (Rs)

Support  (Rs)

Resistance (Rs)

(in Lacs)

Tata Motors

125.57

472.45

464.21

476.56

IndusInd Bank

123.25

856.65

824.84

875.14

State Bank of India

88.56

459.40

453.14

463.09

ITC

81.53

217.70

216.09

218.89

ICICI Bank

79.55

736.50

722.15

744.80

 

  • Bharti Airtel's subsidiary -- Airtel Payments Bank has crossed one billion transactions volume milestone on its platform during September quarter 2021-22.
  • Reliance Industries' arm -- Reliance Digital Health has invested in oncology-focussed managed healthcare platform Karkinos Healthcare. 
  • IndusInd Bank has joined hands with the National Payments Corporation of India for offering real-time cross-border remittances to India using UPI IDs, for its MTO partners. 
  • BPCL is aiming at 1GW of renewable energy portfolio by 2025.
News Analysis