NSE Intra-day chart (08 November 2021) | | | Top Gainers | | | Top Losers | | | World Indices | | | Indices | | | FII Activity(Rs. Cr) | | |
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Market Commentary | | 09 November 2021 | |
Markets likely to get flat-to-positive start
Indian equity benchmarks
recovered from opening lows and ended more than half a percent higher on
Monday, led by buying in Oil & Gas, Consumer Durables and Power stocks. The
benchmarks edged lower in opening deals, as traders got anxious with a private
report that the excise duty cuts on diesel and petrol will cost Rs 45,000 crore
and lead to a 0.3 percentage point widening in the Centre's fiscal deficit.
Some cautiousness also came with report that even though the retail inflation
rate fell to a five-month low of 4.35 per cent in September, there was concern
on the part of reputed agencies, from the International Monetary Fund (IMF) to
Nomura, and companies over inflationary pressure. The wholesale price inflation
(WPI) rate came down in September to the level seen in April, but remained
elevated at 10.7 per cent. Adding to the pessimism, another private report
stated that rapid strides in digital payments notwithstanding, the Indian
economy will likely remain cash-dependent for many years to come, at least
that's what the automated teller machine makers and cash logistics companies
are betting on. However, benchmark indices staged a strong recovery in
afternoon trading as traders turned optimistic with industry chamber PHDCCI
stating that India's economic recovery gained momentum in recent months on the
back of rapid progress in vaccinations, festive season and consequent
improvement in consumer and industry sentiments. The PHDCCI Economy GPS Index
for October 2021 increased to 131 as compared with 113.1 in the previous month.
Some solace also came with State Bank of India (SBI) Chairman Dinesh Kumar
Khara's statement that India is ready to move into the next orbit of growth
with the hugely successful implementation of the COVID-19 vaccination program.
Additional support also came after Reserve Bank of India (RBI) in its latest
report showed that India's forex reserves have increased by $1.919 billion to
$642.019 billion for the week ended October 29 on a healthy increase in the
currency assets and value of gold. Meanwhile, the Finance Ministry has asked
for suggestions on taxation from industries and trade bodies for Budget
2022-23, which is going to set the tone for the growth of India's economy hit
by the COVID-19 pandemic. Finally, the BSE Sensex rose 477.99 points or 0.80%
to 60,545.61and the CNX Nifty was up by 151.75 points or 0.85% to 18,068.55.
The US markets ended higher on
Monday after the House of Representatives passed infrastructure bill. The US
House of Representatives passed a more than $1 trillion infrastructure bill,
sending the legislation to President Joe Biden for his signature. First passed
by the Senate in August, the package would provide new funding for
transportation, utilities and broadband, among other infrastructure projects.
The passage of the infrastructure stimulus, an improving Covid situation in the
US and a better-than-expected labor market reading boosted investors'
confidence in the economic recovery. However, upside remained capped traders
seemed reluctant to make more significant moves amid some uncertainty about the
near-term outlook for the markets following the recent upward trend. A lack of
major US economic data also kept some traders on the sidelines ahead of the
release of reports on producer and consumer prices and consumer sentiment in
the coming days. On the sectoral front, Steel stocks moved sharply higher on
the news of the long-awaited approval of the infrastructure bill, resulting in
a 2.6 percent jump by the NYSE Arca Steel Index. Significant strength was also
visible among oil service stocks, as reflected by the 1.8 percent gain posted
by the Philadelphia Oil Service Index. The advance by oil service stocks came
amid an increase by the price of crude oil, with crude for December delivery
climbing $0.66 to $81.93 a barrel. Semiconductor stocks also turned in a strong
performance on the day, driving the Philadelphia Semiconductor Index up by 1.3
percent.
Crude oil futures ended higher on
Monday on rising optimism about outlook for energy demand. Oil prices rose as
positive signs for global economic growth supported the outlook for energy
demand and the United States said it was weighing options to address high
prices. Strong US jobs data, a bigger than expected increase in China's exports
in October, and the passage of the infrastructure bill in the US have raised
hopes that energy demand will see a marked surge in coming weeks. Meanwhile,
Saudi's state-owned producer Aramco's decision to raise the official selling
price for its crude to customers in Europe, Asia and United States suggest that
demand remains strong. Benchmark crude oil futures for December delivery rose
$0.66 or 0.8 percent to settle at $81.93 a barrel on the New York Mercantile
Exchange. Brent crude for January delivery surged $0.90 or 1.1 percent to
settle at $83.64 a barrel on London's Intercontinental Exchange.
Indian rupee ended significantly
higher against dollar on Monday, on persistent selling of American currency by
exporters. Sentiments were upbeat as RBI in its latest report showed that
India's forex reserves have increased by $1.919 billion to $642.019 billion for
the week ended October 29 on a healthy increase in the currency assets and
value of gold. In another positive development, PHD Chamber of Commerce and
Industry (PHDCCI) has said that the country's economic recovery gained momentum
in recent months on the back of rapid progress in vaccinations, festive season
and consequent improvement in consumer and industry sentiments. Healthy gains
in Indian equity markets also supported domestic currency. On the global front,
dollar was broadly steady on Monday and currency markets lacked momentum as
investors weighed up volatile rate projections and central banks' tolerance of
inflation. Finally, the rupee ended 74.03, stronger by 43 paise from its
previous close of 74.46 on Thursday.
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 9051.18 crore against gross selling of Rs 9570.73 crore, while
in the debt segment, the gross purchase was of Rs 203.08 crore with gross sales
of Rs 397.31 crore. Besides, in the hybrid segment, the gross buying was of Rs 22.74
crore against gross selling of Rs 18.45 crore.
The US markets ended in green on
Monday amid a positive reaction to news that the House of Representatives has
passed a $1 trillion infrastructure bill. Asian markets are trading mostly
higher on Tuesday as the passage of a U.S. infrastructure bill boosted
sentiment. Indian markets ended Monday's session notably higher as traders
returned to their desks after a long holiday weekend despite muted cues from
other Asia and Europe markets. Today, the start of session is likely to be
flat-to-positive tracking gains in global peers. Traders will be taking
encouragement as domestic rating agency Brickwork Ratings revised its growth
estimate for the country's gross domestic product (GDP) to 10-10.5 per cent in
the current financial year from an earlier expectation of a 9 per cent growth.
It said many economic growth indicators are suggesting a faster-than-expected
revival in economic activities. Some support will come as SBI report stated
that India is now ahead of China in financial inclusion metrics, with mobile
and internet banking transactions rising to 13,615 per 1,000 adults in 2020
from 183 in 2015 and the number of bank branches inching up to 14.7 per 1 lakh
adults in 2020 from 13.6 in 2015, which is higher than Germany, China and South
Africa. However, there may be some cautiousness as Rating agency Crisil's
latest report stated that higher diesel prices will shave off the overall
profitability of transporters despite an improvement in freight rates since
last month following the withdrawal of the monsoons, consumption recovery and
higher infrastructure activity. Meanwhile, Markets regulator SEBI allowed
foreign portfolio investors (FPIs) to write off all debt securities that they
are unable to sell. This will be applicable only to such FPIs who wish to
surrender their registration. There will be some buzz in the telecom stocks as
global ratings agency Fitch expects the Telecom Regulatory Authority of India
(Trai) to cut base prices of coveted airwaves in the 700 Mhz and 3.3-3.6 Ghz
bands and expects the much awaited 5G spectrum sale to happen next year. Power
stocks will be in focus as the Union power ministry said that peak power demand
deficit in the country was almost wiped out in 2020-21 period. Providing
statistics, the ministry said the deficit stood at 0.4 per cent in 2020-21
compared to 16.6 per cent in 2007-08 and 10.6 per cent in 2011-12. There will
be some reaction in housing finance companies (HFCs) stocks with rating agency
Icra Ratings' report stating that HFCs are likely to witness a growth of 8-10
per cent in fiscal 2022 helped by rise in economic and higher demand.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
18,068.55
|
17,907.16
|
18,158.86
|
BSE Sensex
|
60,545.61
|
60,013.48
|
60,843.45
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
State
Bank of India
|
368.02
|
523.60
|
515.21
|
533.21
|
Tata
Motors
|
317.36
|
501.00
|
492.55
|
507.15
|
Indusind
Bank
|
290.99
|
1,063.95
|
1,027.04
|
1,115.44
|
Indian
Oil Corporation
|
248.33
|
140.75
|
136.36
|
143.01
|
ITC
|
202.70
|
229.65
|
226.66
|
231.66
|
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