Indian equity bourses hit yet
another record closing highs on Tuesday, with Sensex and Nifty gaining over
0.20% each. The start of the day was sluggish, as India's retail inflation
based on Consumer Price Index (CPI) jumped to an over five-year high of 7.35%
in December 2019. The CPI was 2.11% in December 2018 and 5.54% in November
2019. Traders remained pessimistic, amid reports that the deepening slowdown
has it impact on the deal market in 2019 with mergers and acquisitions
(M&As) plummeting over 34 per cent to $67.1 billion but still making it the
second best, on the back of the $6-billion ArcelorMittal takeover of Essar
Steel. Volatility persisted over the street for the most part of the session,
after India's Wholesale price index inflation also worsened to 2.59 percent in
the month of December 2019 as against 0.58 percent for the previous month and
3.46 percent during the corresponding month of the previous year. However, in the last leg of the trade,
bourses staged sharp recovery to end higher, as the Reserve Bank of India
remained a net purchaser of the US dollar in November, buying $6.928 billion
from the spot market on a net basis. The RBI had bought $7.458 billion of the
greenback and sold $530 million in the spot market in the reporting month.
Finally, the BSE Sensex gained 92.94 points or 0.22% to 41,952.63, while the
CNX Nifty was up by 32.75 points or 0.27% to 12,362.30.
The US markets ended mostly lower
on Tuesday as earnings season opened with mixed banking results. Shares of
Wells Fargo (WFC) moved sharply lower after the banking giant reported fourth
quarter results that missed expectations. However, shares of JPMorgan Chase
(JPM) saw notable strength on the day after the financial giant reported better
than expected fourth quarter results. Besides, sentiments were bruised private
report that said the United States could maintain tariffs on more than $300
billion in Chinese goods past November 2020. The report came a day before US
and Chinese representatives are set to sign a partial trade deal in which the
Washington agreed not to impose additional tariffs and to reduce tariffs on
about $120 billion of goods. On the economic data front, consumer prices in the
US increased by slightly less than anticipated in the month of December,
according to a report released by the Labor Department. The Labor Department
said its consumer price index rose by 0.2 percent in December after climbing by
0.3 percent in November. Street had been expecting another 0.3 percent
increase. The increase in consumer prices was partly due to a jump in energy
prices, which surged up by 1.4 percent in December amid a 2.8 percent jump in
gasoline prices. Excluding food and energy prices, core consumer prices inched
up by 0.1 percent in December after rising by 0.2 percent in November. Core
prices had been expected to rise by another 0.2 percent. The uptick on core
prices reflected higher prices for shelter and medical care as well as
increases by prices for apparel, motor vehicle insurance, recreation, and new
vehicles.
Snapping a five-day losing
streak, crude oil futures settled higher on Tuesday on optimism about a
US-China trade deal. Meanwhile, the
Energy Information Administration (EIA) in a monthly report raised its 2020
forecast for WTI oil prices to $59.25 a barrel, up 7.7% from its forecast a
month earlier. For Brent crude, it sees an average of $64.83 in 2020, up 7.1%
from its previous forecast. Both global oil supply and consumption are expected
to grow in 2020, with supply from non-OPEC producers, particularly the Unites
States, Norway, Brazil, and Canada, more than offsetting declining production
from OPEC. For 2020, the EIA sees total global production of petroleum and
other liquids at 102.37 million barrels a day and total global consumption at
102.11 million barrels a day. Crude oil futures for February gained 15 cents or
0.3 percent to settle at $58.23 a barrel on the New York Mercantile Exchange.
March Brent rose 29 cents or 0.5 percent to settle at $64.49 a barrel on
London's Intercontinental Exchange.
Snapping
its five-day winning streak, Indian rupee ended almost flat against dollar on
Tuesday, as rising crude oil prices kept investors edgy. Traders also remained
wary as India's retail inflation spiked to five year high. India's retail
inflation spiked to a five-year high in December, breaching the upper end of
the RBI's 2-6 percent target for the first time since July 2016. Inflation
increased notably to 7.35 percent from 5.54 percent in November, driven by
higher food prices. Also, wholesale prices based inflation surged to 2.59 per
cent in December, as against 0.58 per cent in November due to increase in
prices of food articles like onion and potato. On the global front, euro fell
on Tuesday as investors locked in some gains after a recent record-setting
rally ahead of the signing of an initial U.S.-China trade truce. Finally, the
rupee ended at 70.87, 1 paise weaker from its previous close of 70.86 on
Monday.
The
FIIs as per Tuesday's data were net buyers in equity segment, while they were
net sellers in debt segment. In equity segment, the gross buying was of Rs
4881.89 crore against gross selling of Rs 4761.10 crore, while in the debt
segment, the gross purchase was of Rs 595.50 crore with gross sales of Rs
1724.39 crore. Besides, in the hybrid segment, the gross buying was nil against
gross selling of Rs 6.54 crore.
The US markets ended mostly lower
on Tuesday as traders seemed reluctant to make significant moves as they
digested quarterly results from several big-name financial companies. All the Asian
markets are trading in red on Wednesday as investors awaited the signing of an
initial US-China trade deal, with sentiment somewhat dented by comments from
the US Treasury Secretary that tariffs would remain in place for now. Indian
markets settled at record highs on Tuesday as investors shrugged off data
showing high retail inflation. Today, the markets are likely to make
pessimistic start amid lackluster global cues. Investors will be eyeing Balance
of Trade data for the month of December to be out later in the day. There will
be some cautiousness with a private report that a spike in India's retail
inflation in December has raised the chances that the Reserve Bank of India
(RBI) will put rate cuts on hold for some time despite economic growth languishing
at more than six-year lows. As per the report, the RBI's monetary policy
committee (MPC) may even change its stance from accommodative to neutral at its
February meeting. Traders may also take note of report that new FICCI President
Sangita Reddy has urged the government not to worry too much about the fiscal
deficit and try to pump the economy by increasing investments to arrest
slowdown and accelerate growth. Besides, the government may impose anti-dumping
duty on a Chinese medicine used to treat different kind of bacterial infections
with a view to guard domestic players from cheap imports. The commerce
ministry's investigation arm Directorate General of Trade Remedies (DGTR) has
initiated a probe into an alleged dumping of Ciprofloxacin Hydrochloride from
China. Meanwhile, according to the much awaited draft Rare Diseases Policy, the
government will provide a financial support of up to Rs 15 lakh under its
Rashtriya Arogaya Nidhi scheme for one-time treatment of rare diseases. There
will be some buzz in the reality stocks with a joint report by Knight
Frank-FICCI-Naredco stating that real estate sentiments in the country revived
in December quarter and turned optimistic after two quarters on the back of
several measures taken by the government and the RBI to boost demand. There
will be some reaction in power stocks with the Central Electricity Authority
data showing that India's annual electricity demand in 2019 grew at its slowest
pace in six years with December marking a fifth straight month of decline.
There will be some earnings announcements too to keep the markets buzzing.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
12,362.30
|
12,322.58
|
12,388.13
|
BSE Sensex
|
41,952.63
|
41,817.60
|
42,040.96
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
3,149.75
|
38.55
|
36.15
|
41.35
|
Tata Motors
|
298.68
|
195.85
|
193.55
|
198.20
|
SBI
|
262.96
|
328.00
|
325.77
|
330.97
|
Vedanta
|
197.28
|
165.00
|
161.97
|
167.07
|
GAIL (India)
|
192.61
|
130.05
|
128.07
|
132.42
|
IOC has developed a special class diesel conforming to NATO grade for use in ships and vessels of Indian Navy.
Tata Motors has commenced bookings of the BS-VI compliant versions of Tiago, Tigor and the Nexon.
SCR has inked a MoU with SBI in connection with doorstep banking for direct pick up of earnings covering all 585 railway stations.
Bajaj Auto has launched its much-awaited Chetak electric scooter and the bookings will start from January 15.