The benchmark Sensex and Nifty indices are likely to open marginally higher on January 9 as trends in the GIFT Nifty indicate a positive start for the broader index with a gain of 125 points.
On January 8, the BSE Sensex plunged 671 points to 71,355, while the Nifty 50 dropped 198 points to 21,513 and formed a long bearish candlestick pattern, which resembles a Bearish Engulfing kind of candlestick pattern on the daily charts, indicating the possibility of a trend reversal.
"The market reacting down sharply after a small rise is signalling a presence of strong overhead resistance around 21,750-21,800 levels," Nagaraj Shetti, senior technical research analyst at HDFC Securities said.
The positive chart pattern like higher tops and bottoms is intact, but he feels the formation of a new lower top at 21,763 could be an alarming signal for bulls at the higher levels. "The next lower supports to be watched at 21,350 (20-day EMA). Immediate resistance is placed at 21,650 levels," he said.
Kunal Shah, senior technical and derivative analyst at LKP Securities, also said the above chart pattern formation indicates a change in market sentiment. "The support of 21,500 if held can see recovery towards 21,650 which is the immediate hurdle zone."
The volatility also increased sharply, making the bulls uncomfortable at Dalal Street. The India VIX jumped 7.06 percent to 13.46, from 12.63 levels.
The broader markets were also under pressure with the Nifty Midcap 100 and Smallcap 100 indices falling 1 percent and 0.6 percent.
The pivot point calculator indicates that the Nifty is likely to see immediate resistance at 21,538, followed by 21,758 and 21,861 levels, while on the lower side, it can take support at 21,486 followed by 21,422 and 21,319 levels.
Stay tuned to Moneycontrol to find out what happens in the currency and equity markets today. We have collated a list of important headlines across news platforms, which could impact Indian as well as international markets.
GIFT Nifty
The GIFT Nifty indicates a marginally positive start for the broader index with a gain of 125 points. GIFT Nifty futures stood at 21,701 points after making a high of 21,812 points.
Trade setup for Tuesday: Top 15 things to know before the opening bell
US Markets
US stock futures inched lower Monday night after the major averages popped to start the week. Dow Jones Industrial Average futures fell by 41 points, or 0.11 percent. S&P 500 futures and Nasdaq 100 futures each dipped by nearly 0.1 percent.
Those moves come after a strong trading session for equities. The S&P 500 and the Nasdaq Composite on Monday rallied more than 1 percent and 2 percent, as mega-cap tech stocks bounced from last week’s declines. Nvidia shares reached an all-time high, climbing 6.4 percent during the session.
Even the 30-stock Dow ended the day more than 200 points higher, or 0.6 percent. The index overcame a sharp drop in Boeing shares following news over the weekend that the company’s aircraft would be temporarily grounded.
Mega-cap tech stocks outperformed as investors bought the dip after last week’s selloff. Investors were worried major names such as Apple could underperform after their market leadership last year, but other traders expect the outlook for tech stocks remains bright.
“The market’s really trying to figure out how many cuts we’re going to have this year, and for us, we believe that more equities will see all-time highs at the end of 2024,” said AJ Oden, global investment strategist at JPMorgan Private Bank. “And the reason for that is we believe that technology will have a pretty strong year, and that’ll sort of add to that that tailwind that we’re seeing in equities into the end of the year.”
European Markets
European markets turned positive Monday, shaking off the negative sentiment seen at the start of trading in 2024. The Stoxx 600 index closed 0.34 percent higher, having slumped during morning trade. Technology and retail stocks both rose 1.23 percent to lead gains.
Oil and gas stocks meanwhile dropped 1.55 percent after Saudi Arabia announced price cuts to customers in Asia, and Shell said its upcoming fourth-quarter results would contain impairment charges of up to $4.5 billion.
The pan-European index ended the session 0.3 percent lower Friday as stocks struggled to gain traction in the first trading week of the year. Global investors will be looking ahead to US inflation data and big bank earnings in the week ahead for further clues on the state of the economy and the path of rate cuts from the Federal Reserve.
Asian Markets
Asia-Pacific markets rose across the board Tuesday, rebounding from a sell off in the previous session. Investors assessed December inflation numbers for Japan’s capital city of Tokyo, which are a leading indicator for nationwide inflation.
Tokyo’s inflation rate slowed to 2.4 percent in December from 2.6 percent in the previous month. Core inflation — which strips out prices of fresh food — remained unchanged at 2.1 percent, and came in line with expectations.
Australia’s retail sales for November 2023 also rose more than expected, gaining 2 percent month-on-month and beating economists expectations of 1.2 percent in a Reuters poll. The Australian S&P/ASX 200 climbed 1.03 percent.
Japan’s Nikkei 225 popped 1.66 percent as trading resumed after a public holiday, while the Topix gained 0.93 percent. South Korea’s Kospi advanced 0.7 percent even as heavyweight Samsung Electronics cut its earnings forecast for the fourth quarter of 2023, while the small-cap Kosdaq gained 0.91 percent. Futures for Hong Kong’s Hang Seng index stood at 16,377, pointing to a slight rebound compared with the HSI’s close of 16,224.45.
After JPMorgan, Indian govt bonds could become part of Bloomberg indices in 2024
Indian government bonds could get an additional boost in 2024, with Bloomberg proposing their inclusion in its indices starting September 2024.
"Following client feedback received during the Bloomberg 2023 Fixed Income Index Advisory Councils, Bloomberg Index Services Limited (BISL) is launching a consultation to solicit feedback on the proposed inclusion of the India Fully Accessible Route bonds in the Bloomberg Emerging Market (EM) Local Currency Index," a statement by Bloomberg Index Services Limited said on January 8.
As per the proposal, Indian government bonds will be phased in over five months starting September 2024, with each month seeing the addition of 20 percent of the full-market value of the bonds falling under the Fully Accessible Route (FAR) category. As such, the process will be completed in January 2025.
Zee-Sony's $10-billion merger may be called off
Sony Group Corp. is planning to call off the merger pact of its India unit with Zee Entertainment Enterprises Ltd., said people familiar with the matter, capping two years of drama and delay in creating a $10 billion media giant.
The Japanese conglomerate is looking to cancel the deal due to a standoff over whether Zee’s Chief Executive Officer Punit Goenka, also its founder’s son, would lead the merged entity, the people said, asking not to be named as the information is not public. While the agreement signed in 2021 was that Goenka would lead the new company, Sony no longer wants him as CEO amid a regulatory probe, the people said.
Sony plans to file the termination notice before a January 20 extended deadline for closing the deal, saying some of the conditions necessary for the merger had not been met, one of the people said. Goenka has stood his ground in wanting to helm the merged entity, as agreed initially, over prolonged meetings in the past few weeks, according to another person.
Bajaj Auto board approves Rs 4,000-crore share buyback at Rs 10,000 per share
Two and three-wheeler major Bajaj Auto Ltd board on January 8 approved a Rs 4,000 crore share buyback at Rs 10,000 apiece. This is at a premium of 43 percent to the last closing price.
The company will be buying 40 lakh shares via tender route, representing 1.41 percent of Bajaj Auto's outstanding shares. Promoters of the company will also be participating in the buyback. Currently, the promoters hold a 54.94 stake in the company. The automaker said the Board has constituted a Buyback Committee and has delegated the power to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, expedient or proper in connection with the buyback.
The buyback is subject to approval of the shareholders by means of a special resolution through a postal ballot. The record dates and other details will be announced later.
This is Bajaj Auto's second share buyback in as many years. The auto major in July 2022 purchased shares worth Rs 2,500 crore from holders at Rs 4,600 a unit. Last week, Bajaj Auto Managing Director Rajiv Bajaj told CNBC-TV18 that the buyback would be far bigger this time.
Tata Group initiates talks for public listing of Tata Autocomp Systems
The Tata Group has begun talks to list Tata Autocomp Systems (TACO), the group’s auto components manufacturing business, with the formal process expected to begin later this year, people aware of the discussions told Moneycontrol requesting anonymity.
According to the persons cited above, the discussions are at an early stage and talks are currently focused on Tata Group entities that will divest their stakes in the company and also the overall quantum of stake which will be divested in the IPO.
TACO is owned fully by Tata Group entities with direct holding by Tata Sons, which owns around 21 percent while the remaining is held by Tata Industries Ltd. TACO was founded in 1995 and operates as the vehicle for the group's ventures in the auto components business.
India beats Taiwan in MSCI EM index weightage to be second after China
India's weightage surpassed Taiwan in MSCI EM index, now ranking second after China. This solidifies India as a promising investment choice among emerging markets.
India's MSCI Emerging Markets index spiked in eight years, leaping from 7 percent to 17.1 percent. With the ongoing domestic institutional investments and potential steady FII participation, India could surpass a 20 percent weight in the MSCI EM Index by early 2024, according to recent Nuvama report.
Recent Jefferies notes suggest that India is poised to attract more foreign investments in 2024 in the medium term. India's positioning in EM portfolios remains relatively light, but its growing size is making its markets more relevant for global funds. Favourable conditions such as expected political stability, a rising investment cycle, and a peaking US dollar create an ideal scenario for higher foreign flows.
India’s exports may take a $30 billion hit on Red Sea threats
India may see around $30 billion shaved off its total exports in the current fiscal year, as threats to cargo vessels in the Red Sea lead to a surge in container shipping rates and prompt exporters to hold back on shipments.
The initial assessment, conducted by the Research and Information System for Developing Countries, a New Delhi-based thinktank, would mean a 6.7 percent drop in Indian exports, based on last fiscal year’s $451 billion total.
“The crisis in the Red Sea would indeed impact India’s trade and may lead to further contraction,” said Sachin Chaturvedi, the director general of the thinktank. The government hasn’t released any official estimates on the impact of the Red Sea crisis on Indian exports.
Adani-owned ACC to acquire complete stake in Asian Concretes and Cements
Adani-owned ACC Limited said on January 8 that it will acquire the remaining 55 percent stake in Asian Concretes and Cements Private Limited (ACCPL) from an existing promoter at an enterprise Value of Rs 775 crore, as the cement and building materials firm looks to boost capacity amid robust demand. ACC currently holds a 45 percent stake in the company.
The acquisition is value accretive considering it will balance Adani Cement’s clinker facilities in north India, the company said in a BSE filing adding that the deal will be fully funded through internal accruals.
Analysts expect that the big boys of the cement industry will continue to take over smaller companies and consolidate to protect and gain market share on expectations of robust demand driven by increased spending on infrastructure projects in the country.
GCPL launches Rs 515-cr manufacturing plant at TN investor meet
FMCG major Godrej Consumer Products Limited (GCPL) joined hands with the State Government of Tamil Nadu for the opening ceremony of its cutting-edge manufacturing plant during the ongoing Global Investors Meet 2024, in Chennai.
Strategically located in the Chengalpattu District near the state capital Chennai, this Rs 515-crore investment aims to enhance delivery times, optimize inventory management, and reduce overall costs.
In August 2023, GCPL signed a significant MoU with the state government to set up this state-of-the-art facility, focusing on accelerating production of flagship brands such as Cinthol, Godrej Expert Rich Crème, Godrej Selfie Shampoo Hair Colour, and Goodknight.
“We aspire to develop this facility as a “lighthouse factory” where the best in sustainability, safety and automation is done with an inclusive and gender balanced workforce. The government has generously given us incentives on our commitment to employ at least 50 percent of women and 5 percent of employees from the LGBTQI and people with disability communities,” said Nisaba Godrej, Executive Chairperson, GCPL.
ONGC starts oil production from delayed $5 billion deep-water project
State-controlled Oil and Natural Gas Corporation (ONGC) has started oil production from its much-delayed flagship deep-sea project in Krishna Godavari basin in Bay of Bengal, helping reverse years of decline in output, the company said. ONGC has started producing from the Cluster-2 project in KG-DWN-98/2 block and will slowly ramp up output.
Oil Minister Hardeep Singh Puri said "first oil production commences from complex and difficult" block. He did not indicate the current output but said "production is expected to be 45,000 barrels per day and over 10 million standard cubic metres per day of gas".
Vistara confident of receiving Boeing order
Indian full-service carrier Vistara said on Monday it was confident of receiving its last 787 wide-body jet from Boeing by March or April, despite a recent 737 MAX 9 mid-air blowout leading to regulatory scrutiny.
Hyundai announces Rs 6,180 crore investment in Tamil Nadu
Hyundai Motor India Ltd on Monday said it will invest Rs 6,180 crore on various initiatives, including establishing a hydrogen resource centre, in Tamil Nadu.
The fresh investment by the automaker is in addition to the Rs 20,000 crore it plans to deploy over a period of ten years (2023- 2032) to augment its efforts in electric vehicle manufacturing, charging infrastructure and skill development. The company inked an MoU with the state government regarding the new investment during the Tamil Nadu Global Investors Meet 2024.
"This substantial investment of Rs 6,180 crore is a testament to our enduring commitment to fortifying the state's pursuit to boost the socio-economic development in the state and make the country self-reliant," Hyundai Motor India MD & CEO Unsoo Kim said in a statement.
GCPL launches Rs 515-cr manufacturing plant at TN investor meet
FMCG major Godrej Consumer Products Limited (GCPL) joined hands with the State Government of Tamil Nadu for the opening ceremony of its cutting-edge manufacturing plant during the ongoing Global Investors Meet 2024, in Chennai.
Strategically located in the Chengalpattu District near the state capital Chennai, this Rs 515-crore investment aims to enhance delivery times, optimise inventory management, and reduce overall costs.
In August 2023, GCPL signed a significant MoU with the state government to set up this state-of-the-art facility, focusing on accelerating production of flagship brands such as Cinthol, Godrej Expert Rich Crème, Godrej Selfie Shampoo Hair Colour, and Goodknight.
“We aspire to develop this facility as a “lighthouse factory” where the best in sustainability, safety and automation is done with an inclusive and gender balanced workforce. The government has generously given us incentives on our commitment to employ at least 50 percent of women and 5 percent of employees from the LGBTQI and people with disability communities,” said Nisaba Godrej, Executive Chairperson, GCPL.
Oil Prices
US crude oil declined 4 percent on Monday after Saudi Arabia slashed its prices, raising renewed worries that the market is oversupplied at the same time as demand is weakening.
The West Texas Intermediate futures contract for February lost $3.04, or 4.12 percent, to settle at $70.77 a barrel. The Brent futures contract for March shed $2.64, or 3.35 percent, to settle at $76.12 a barrel. The sell-off comes after Saudi Aramco on Sunday sharply lowered the price of Arab Light Crude to Asian customers by $2 per barrel.
The Saudi price cut comes amid persistent market weakness due in large part to record U.S. crude production and softening demand in China. OPEC and its allies are cutting their production by 2.2 million barrels per day this quarter in an effort to balance the market.
“While it is possible that the price reduction was to maintain market share in the face of production cuts, the market is taking it as a clear sign that the economy is slowing. Maybe the landing might not be so soft,” Phil Flynn of The Price Futures Group wrote on Monday.
Dollar Index
The Dollar index traded 0.06 percent lower in futures at 102.32, whereas the value of one dollar hovered near Rs 83.09.
Gold Prices
Gold prices fell to a three-week low on Monday, pressured by elevated Treasury yields as expectations for an imminent Federal Reserve interest rate cut faded, with investors looking ahead to this week’s U.S. inflation data for more clarity.
Spot gold was down 0.9 percent at $2,026.97 per ounce, after touching its lowest price since December 18 earlier in the session. U.S. gold futures fell 0.8% to $2,033.4. The release on Friday of data showing the U.S. added more jobs in December than expected by economists in a Reuters poll prompted some doubts in financial markets that the U.S. central bank would start cutting interest rates in March.
“Maybe that takes some of the rate-cut odds off the table or lowers them to some degree,” said Daniel Pavilonis, senior market strategist at RJO Futures. Higher interest rates increase the opportunity cost of holding non-yielding bullion.
Stock under F&O ban on NSE
The NSE has added Bandhan Bank to its F&O ban list for January 9, while retaining Balrampur Chini Mills, Chambal Fertilisers & Chemicals, Delta Corp, Escorts Kubota, GNFC (Gujarat Narmada Valley Fertilisers & Chemicals), Hindustan Copper, Indian Energy Exchange, India Cements, National Aluminium Company, Piramal Enterprises, SAIL and Zee Entertainment Enterprises to the said list. Securities banned under the F&O segment include companies where derivative contracts cross 95 percent of the market-wide position limit.
FIIs and DIIs
Foreign institutional investors (FIIs) bought shares worth Rs 16.03 crore, while domestic institutional investors (DIIs) purchased Rs 155.96 crore worth of stocks on January 8, provisional data from the NSE showed.
With inputs from Reuters and other agencies.
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