Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas:
The Nifty witnessed profit booking on January 06 after having run up for the last four consecutive sessions. It had reached near 18000 mark, which was a key barrier & thereon the bulls took a pause for a breather. As a result of the recent rally, the hourly momentum indicators had reached the overbought zone & with the current minor degree dip, they are getting an opportunity to cool off.
Also, the hourly chart shows that the lower end of a rising channel is acting as a support for the minor degree dip. The junction of 40 HEMA & the hourly lower Bollinger Band is also present below the lower channel line.
Thus 17650-17600 is a key support zone where the Nifty can form a short term base for itself. The overall structure shows that the index can witness sideways action over the next few sessions post which it will be set to head higher.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd:
On Thursday, the benchmark indices witnessed selling pressure at higher levels. Due to weak global conditions the market opened with a gap down and consistently registered to sell pressure at higher levels.
Technically, after an intraday sharp fall, the market took the support near 17650/59300 and reversed but failed to surpass 17800/59800 resistance level which is broadly negative. In addition, on daily charts, the index has formed a Hammer kind of candlestick formation that also supports short-term weakness.
The texture of the market is volatile and remain volatile in the near future. Hence, level-based trading would be the ideal strategy for day traders. Now, 17700/59000 would act as an immediate support level for the bulls. Above the same uptrend, the move will continue up to 17800-17875/59800-60000. On the flip side, trading below 17700/59000 could drag the index up to 17650-17610/58800-58600.
Sachin Gupta, AVP-Research at Choice Broking:
The benchmark index extended the losses after a gap-down opening on Thursday due to weak global cues, after FOMC meeting minutes. However, we witnessed a slight pullback in the second half of the session ahead of Weekly expiry.
On a technical chart, the Nifty index has taken immediate resistance at upper Bollinger Band formation and traded below it. However, on a four hourly chart, the stock has still been trading above the Horizontal Line, which is acting as an immediate support zone.
An indicator MACD & RSI is still trading with a positive crossover that supports the bullish trend. At present, the index has support at 17600 levels while resistance at 18000 levels. On the other hand, Bank Nifty has support at 36700 levels while resistance at 38000 levels.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:
Despite opening down with a gap, the index was quick to bounce from the lows. Until we do not break 17200, the short term trend of the market is positive.
Intra day corrections can be utilized to accumulate long positions for a target of 18050-18100. A closing below 17200 would be the stop.
Vinod Nair, Head of Research at Geojit Financial Services:
Following a sharp fall in western markets, the domestic market witnessed a gap-down opening and extended its losses led by selling in IT, realty and oil & gas shares.
Global markets were wounded by heavy selling as Fed meeting minutes pointed to a faster than expected policy rate hike considering elevated US inflation levels. Investors are also watching the fast spread of covid cases and stricter restrictions being imposed as it would keep the market highly volatile in the coming days.
S Ranganathan, Head of Research at LKP securities:
The day witnessed a gap-down opening on the back of weak global cues and hawkish FOMC minutes which saw the US 10-year yield rising to 1.7%.
Bulls were a bit restrained on the back of rising covid cases and its impact on the fourth quarter corporate performance since it happens to be an important quarter for India Inc. The IT & Oil & Gas Index led the fall today with Cement stocks too witnessing profit taking.
Market Close:
Benchmark indices broke the four-day winning streak and ended lower with Nifty below 17800 on the back of weak global cues.
At close, the Sensex was down 621.31 points or 1.03% at 59,601.84, and the Nifty was down 179.40 points or 1% at 17,745.90. About 1798 shares have advanced, 1336 shares declined, and 74 shares are unchanged.
JSW Steel, UltraTech Cement, Tech Mahindra, Shree Cements and Reliance Industries were among the top Nifty losers. Gainers included UPL, IndusInd Bank, Bajaj Auto, Bharti Airtel and Eicher Motors.
Among sectors, except auto and oil & gas, all other sectoral indices ended lower with IT and Realty indices down 1 percent each. The BSE midcap and smallcap indices ended on flat note.
CLSA view on UPL
Brokerage firm CLSA has kept buy call on UPL and raised the target price to Rs 1,100 from Rs 1,060.
The new launch successes are key to achieving goal of 25% EBITDA margin, while transition towards high-value products should drive a P/E rerating.
It raise FY22-24 EPS estimates by 2-3% as it build in spot currency assumptions.
UPL was quoting at Rs 783.75, up Rs 19.10, or 2.50 percent.
Nifty Auto index added 0.5 percent supported by the Bharat Forge, Bajaj Auto, TVS Motor
Jefferies on Thermax
Foreign broking house Jefferies has upgraded Thermax to a buy rating with target at Rs 2,575 per share.
The management focussed on taking a step ahead in improving capital allocation and margin improvement.
Jefferies upgrades FY23-24 EPS by 11-36% to reflect revenue recovery.
Thermax touched a 52-week high of Rs 1,948.55 and was quoting at Rs 1,894, up Rs 54.90, or 2.99 percent.
Manappuram Finance to consider various options for raising funds
Manappuram Finance is considering various options for raising funds through borrowings including by the way of issuance of various debt securities in onshore / offshore securities market by Public Issue, on Private Placement Basis or through issuing Commercial Papers, company said in its press release.
Based on the prevailing market conditions, the Board of Directors / Financial Resources and Management Committee / Debenture Committee of the Board of Directors of the Company may consider and approve issuances of Debt Securities during the month of January, 2022, subject to such terms and conditions including the issue price of debt securities, as the Board / respective Committee may deem fit, it added.
Manappuram Finance was quoting at Rs 166.95, up Rs 0.15, or 0.09 percent.
Market at 3 PM
Benchmark indices erased some of the intraday losses but still trading lower with Nifty below 17800.
The Sensex was down 576.70 points or 0.96% at 59646.45, and the Nifty was down 167.80 points or 0.94% at 17757.50. About 1834 shares have advanced, 1291 shares declined, and 76 shares are unchanged.
BSE Metal index fell 0.5 percent dragged by the JSW Steel, Tata Steel, APL Apollo
Bajaj Finserv December Business Update
Bajaj Finserv's subsidiary Bajaj Allianz General Insurance’s gross direct premium for the month of December 2021 was at Rs 1,123.6 crore.
The Bajaj Allianz Life Insurance’s individual single premium was at Rs 22.9 crore and individual non-single premium was at Rs 459.1 crore.
Bajaj Finserv was quoting at Rs 18,046.50, up Rs 63.50, or 0.35 percent on the BSE.
IRB Infrastructure subsidiary executes concession agreement with Uttar Pradesh Expressways Industrial Development Authority
IRB Infra informed that Meerut Budaun Expressway Private Limited, wholly-owned subsidiary of the Company, has executed Concession Agrecment with Uttar Pradesh Ex pressways Industrial Development Authority(U llEIDA) for development of Access Controlled Six Lane (Expandable to Eight Lane) Greenfield 'Ganga Expressway’ spread over 129.7 km. IRB Infra was trading at Rs 225.80, up Rs 2.60, or 1.16 percent. It has touched an intraday high of Rs 230.00 and an intraday low of Rs 219.30.
European Markets Updates
ICICI Direct on telecom sector:
We expect subscriber addition momentum to moderate for the industry amid recent tariff hike. Reliance Jio (Jio) is likely to lead the subscriber addition with ~8 mn net adds mainly led by JioPhone Next launch. Bharti Airtel, which is likely to add ~0.3 mn subscribers, with modest addition amid tariff hike led consolidation. On the other hand, Vodafone Idea is expected to continue experiencing churn (albeit in a controlled level vis-à-vis earlier quarter) with subscriber loss of ~2 mn. ARPU growth will be seen for all telcos, led by partial benefit of tariff hike.
We expect Jio, Airtel and VIL to report ARPU to be up 6%, 4%, 6% QoQ at ~Rs 149, Rs 163, Rs 116, respectively. The lower ARPU growth for Jio is owing to lag between tariff hike vs. peers and larger share of long duration renewals. For Jio, revenues are expected at Rs 19,387 crore, up 3.5% QoQ. Airtel’s India wireless revenue is expected at Rs 16,111 crore, up 6.1% QoQ. For Vodafone Idea, we expect overall revenues to grow 4.6% QoQ at Rs 9835 crore.
Market update at 2 PM: Sensex is down 725.67 points or 1.20% at 59497.48, and the Nifty fell 205.80 points or 1.15% at 17719.50.
Alembic Pharma gets USFDA nod for Entacapone Tablet
Alembic Pharmaceuticals has received final approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) for Entacapone Tablets USP, 200 mg.
The approved ANDA is therapeutically equivalent to the reference listed drug product (RLD) Comtan Tablets, 200 mg, of Orion Corporation. Entacapone Tablets are indicated as an adjunct to levodopa and carbidopa to treat end-of-dose "wearing-off" in patients with Parkinson's disease.
Alembic Pharmaceuticals was quoting at Rs 819.05, up Rs 2.85, or 0.35 percent.
Kotak Mahindra Mutual Fund launches Midcap 50 ETF Scheme
Kotak Mahindra Asset Management Company announced the launch of an Exchange Traded Fund - Kotak Midcap 50 ETF - an open ended scheme that will track the Nifty Midcap 50 Index.
The new fund offering (NFO) is benchmarked against the Nifty Midcap 50 Index (TRI), which captures the movement of the mid-cap segment of the market.
The Kotak Midcap 50 ETF will replicate the Nifty Midcap 50 Index, which includes the top 50 companies based on full market capitalisation from Nifty Midcap 150 Index with preference given to those stocks on which derivative contracts are available on the National Stock Exchange. In case 50 midcap stocks do not have derivatives contract available on them then it could have less than 50 stocks in the index.
Buzzing
RBL Bank shares advanced over 2 percent intraday on January 6 after company reported better loan growth for the quarter ended 31 December 2021.
RBL Bank's gross advances jumped 5 percent year-on-year to Rs 59,941 crore (provisional) in Q3FY22 from Rs 57,092 crore in the same quarter of the previous fiscal year. Sequentially, it was up 3.5 percent from Rs 57,939 crore in Q2FY22.
Retail advances remained flat, while wholesale advances grew 8 percent sequentially during the three month period.
Market at 1 PM
Benchmark indices erased some of the intraday losses but still trading lower with Nifty around 17700
The Sensex was down 731.39 points or 1.21% at 59491.76, and the Nifty was down 210.80 points or 1.18% at 17714.50. About 1621 shares have advanced, 1456 shares declined, and 83 shares are unchanged.
Mohit Ralhan, Managing Partner & Chief Investment Officer of TIW Private Equity
The market has been facing downward pressure post touching its all-time high in October. While, the economy has been recovering on expected lines, the global cues indicating the unwinding of balance sheet expansion by central banks around the world have been a major factor.
In this context, the US Fed’s hawkish stance has not been a surprise, but the negative market reaction today is primarily due to the indication of balance sheet reduction in the Fed minutes released yesterday. Almost all members showed concern on rising inflation and the possibility of accelerating rate hikes followed by a reduction in the balance sheet.
Although the timing remains uncertain, market participants are now expecting this to happen sooner than later. In addition, the rising cases of COVID-19 around the globe has also increased the risk levels. Overall, we remain cautious in the markets right now.
Buzzing
Shares of NHPC advanced 3 percent on January 6 after company signed an agreement with Green Energy Development Corporation of Odisha (GEDCOL) for formation of a JV company for development of 500 MW floating Solar Power Projects in various water reservoirs in the State of Odisha.
ADF Foods gets govt approval under PLI scheme for food processing industries
ADF Foods Industries share price rose 2 percent on January 6 after company received approval from the Government of India under Production Linked Incentive (PLI) scheme for food processing industries.
"ADF Foods Industries has received approval from the Government of India under Category III pf the PLI scheme for food processing industries - incentive for undertaking branding and marketing activities abroad," company said in its release.
Market at 12 PM
Benchmark indices extended the fall and trading at day's low level with Nifty below 17,700.
The Sensex was down 872.80 points or 1.45% at 59350.35, and the Nifty was down 253.70 points or 1.42% at 17671.60. About 1548 shares have advanced, 1488 shares declined, and 99 shares are unchanged.
Reliance Industries raises USD 4 billion in US dollar bonds in 3 tranches
Reliance Industries successfully priced fixed rate senior unsecured notes for an aggregate amount of USD 4 billion across three tranches.
The Notes were nearly 3 times oversubscribed with a peak order book aggregating ~ USD 11.5 billion and were priced through RIL’s secondary curve
“We are extremely pleased with the strong outcome on our multi-tranche long dated USD bond issuance, having issued not only the largest debt capital market transaction at US$4 billion but also the tightest credit spreads across each of the long-dated tenors for any corporate in India," said Srikanth Venkatachari, Joint Chief Financial Officer, RI.”
Reliance Industries was quoting at Rs 2,425.20, down Rs 40.85, or 1.66 percent on the BSE.
Asian shares fall after hawkish Fed minutes
Asian shares fell on Thursday, extending a global slump after Federal Reserve meeting minutes pointed to a faster-than-expected rise in US interest rates due to concerns about persistent inflation.
Worries over higher US rates combined with growing concerns about the rapid spread of the Omicron coronavirus variant to weigh on riskier assets.
Asian shares took their cue from overnight losses on Wall Street. The Nasdaq plunged more than 3% on Wednesday in its biggest one-day percentage drop since February and the S&P 500 fell the most since Nov. 26, when news of the Omicron variant first hit global markets.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.95%, Australian shares slid 1.53% and Japan's Nikkei stock index fell 2.08%.
Chinese blue-chips fell 1.37% as a private sector survey showed China's service sector activity expanded more quickly in December, but continuing COVID-19 outbreaks weighed on the outlook.
Amit Pabari, MD at CR Forex Advisors
After trading on a positive note yesterday due to the selling of dollars by a couple of big corporates, today the Indian Rupee is expected to trade in the range of 74.25 to 74.75 with a depreciating bias.
Fed meeting minutes suggest that officials are ready to aggressively dial back their bond-buying and go for rate hike immediately. Chances of a rate hike in March jumped to 70% from near 25% a month ago. The US yield curve is flattening again, 10-year yield rising to 1.71% - highest level since Apr-2021. Following a hawkish minutes, equities fell sharply, especially Tech stocks on the back of rising yields.
Locally, depreciating factors could be widening trade deficit for the fourth straight month above $19 billion, sluggish services PMI data and a double digit food prices. Further, domestic COVID cases are increasing exponentially and could lead to tighter state-wise restrictions. This could hamper the business activity and cut down the growth by atleast 40-50 bps.
HDFC Securities on Thyrocare Technologies
We believe Thyrocare Tech is on a strong footing on the back of steady recovery in core business, likely increase in B2C share, opening of regional labs and expansion of branded franchisee centres which would aid volume growth. API Holding’s technology and digital products will also bring necessary digital capabilities to Thyrocare’s business. Wider product/service offerings and inclusion of specialised test profiles would
improve its realisations once it reaches scale.
Structural tailwind around shift from unorganized business to organized players, potential consolidation, likely increase in preventive check-ups and sizeable scale would benefit large organized players like TTL. Revenue from Covid tests which has been a large proportion of revenues in FY21 and likely in FY22 (given the recent spread of Omnicron variant) may not recur in FY23/FY24 to the same extent and hence the revenue growth post FY22 may not be very exciting unless compensated by other initiatives/synergy benefits with PharmEasy.
Considering the strong historic growth profile, well-established brand image and robust return ratios, we believe that there is a scope for re-rating of this stock. We think the base case fair value of the stock is Rs 1208 (35.5x Dec’23E EPS) and the bull case fair value is Rs 1310 (38.5x Dec’23E EPS) over the next two quarters. Investors can buy the stock in the band of Rs 1082-1088 (31.8x Dec’23E EPS) and add on dips to Rs 968-972 band (28.5x Dec’23E EPS).
Market at 11 AM
Benchmark indices were trading near the day's low point with Nifty below 17700.
The Sensex was down 825.75 points or 1.37% at 59397.40, and the Nifty was down 233.90 points or 1.30% at 17691.40. About 1396 shares have advanced, 1607 shares declined, and 81 shares are unchanged
Gaurav Garg, Head of Research, Capitalvia Global Research:
The Indian benchmarks started with a gap-down opening amid negative global cues. Traders may take note of ICRA report that the third wave of the pandemic rising exponentially worldwide. Some respite may come in the market as Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) were net buyers in the Indian equity market as per yesterday data.
Our research suggests that if the market sustained the level of 17600, we may expect to gain the early market correction. If market unable to sustained the level of 17600, we can expect it to trade till the lower range of 17300-17500.
Life Insurance Corporation of India acquires 2% stake in Mahanagar Gas
Life Insurance Corporation of India acquired 2% stake in Mahanagar Gas via open market transactions, increasing shareholding to 7.01 percent from 5 percent earlier.
Mahanagar Gas was quoting at Rs 880.05, up Rs 1.35, or 0.15 percent.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services:
Details of the Fed minutes indicating earlier-than-expected policy normalization led to sharp spike in the 10-year yield to 1.69% and sell off in equity markets with S&P 500 and Nasdaq losing 1.9% and 3.3% respectively. Now the market feels that the first rate hike may come in March itself. The sharp moves in the bond and stock markets is an indication of the volatility in store in 2022.
The sharp cut in the US is unlikely to lead to similar cuts in India. Here Q3 results, budget expectations and macro data are likely to influence the market in the coming days. Sectoral rotation in favour of financials, particularly leading banks, is a likely scenario in 2022.
There are market signals and macro triggers favouring financials. So, market corrections may be used to buy high quality financials and large-cap IT. Cement prices and demand are firm indicating better prospects for the sector.
L&T Construction wins order in the range of Rs 2,500-5,000 crore:
The Water and Effluent Treatment Business of L&T Construction has secured a slew of orders from various prestigious clients.
The Department of Water Supply and Sanitation, Punjab has awarded two EPC orders for the Bulk Supply of Treated Water to 10 lakh people across 412 villages and 15 dhanies in the Fazilka and Ferozepur districts of Punjab on a DBOT (Design Build Operate Transfer) basis.
Larsen & Toubro was quoting at Rs 1,935.90, down Rs 12.25, or 0.63 percent.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments:
There has been a reaction from the resistance zone of 17800-17950. This would not mean the end of the current trend. The trajectory will continue to be positive until 17200 is not broken on a closing basis.
Bottom picking or accumulation is always a strategy that can be adopted. However, I am of the opinion that unless we do not close above 17950, the next leg of this rally will not commence.
Rupee Opens:
Indian rupee opened 12 paise lower at 74.48 per dollar on Thursday against previous close of 74.36.
The US dollar fell 0.10% yesterday but pared losses amid upbeat job data and surge in US treasury yields. Yields rallied after FOMC meeting minutes showed officials feel rising inflation and a very tight labour market warrant raising interest rates sooner than expected and reducing overall asset holdings, said ICICI Direct.
Rupee future maturing on January 27 appreciated by 0.29% on weak dollar, rise in risk appetite in the domestic markets and FII inflows, it added.
Market at 10 AM
Benchmark indices extended the opening losses and trading near the day's low level with Nifty around 17700.
The Sensex was down 709.80 points or 1.18% at 59513.35, and the Nifty was down 200 points or 1.12% at 17725.30. About 1232 shares have advanced, 1683 shares declined, and 71 shares are unchanged.
Omicron may eat up 40 bps of Q4 GDP growth: ICRA
The third wave of the pandemic, which has seen a massive spike in infections after the more infectious Omicron variant of the coronavirus appeared, is likely to shave 40 bps off the fourth quarter GDP growth that may print in at 4.5-5 percent, warns ICRA Ratings.
Accordingly, ICRA sees the third wave shaving around 40 bps off the March quarter GDP growth, which may print in at 4.5-5 percent going by the early assessment, Nayar told PTI.
BSE Bankex index slipped 1 percent dragged by the HDFC Bank, Kotak Mahindra Bank, ICICI Bank
Japan's service sector activity growth eases in December -PMI
Japan's services sector activity expanded at a slower pace in December as growth in new and outstanding business softened and expectations for the 12 months ahead eased to a four-month low.
The final au Jibun Bank Japan Services Purchasing Managers' Index (PMI) dropped to a seasonally adjusted 52.1 from the prior month's 53.0, which was the highest reading since August 2019.
Nifty IT index shed 1 percent dragged by the HCL Technologies, Tech Mahindra, L&T Technology Services
Goldman Sachs says bitcoin will compete with gold as "store of value"
Bitcoin will take market share away from gold in 2022 as digital assets become more widely adopted, Goldman Sachs analyst Zach Pandl said in a research note to clients.
Citing bitcoin's $700 billion market capitalization, compared to the around $2.6 trillion worth of gold owned as an investment, Goldman Sachs said that the cryptocurrency currently has a 20 percent share of the "store of value" market.
Bitcoin will "most likely" become a bigger proportion over time, Goldman Sachs said, in a list of 2022 predictions.
Gainers and Losers on the BSE Sensex in the early trade:
Market Opens
: Indian indices opened gap down on January 6 with Nifty below 17800 amid weak global cues.
At 09:16 IST, the Sensex was down 487.21 points or 0.81% at 59735.94, and the Nifty was down 144.80 points or 0.81% at 17780.50. About 793 shares have advanced, 1373 shares declined, and 76 shares are unchanged.
HCL Technologies, Infosys, JSW Steel, Tata Motors and HDFC Bank were among major losers on the Nifty, while gainers were Sun Pharma, Bharti Airtel, Dr Reddy’s Labs, Hindalco and Cipla.
