The benchmark Sensex and Nifty indices are likely to open marginally higher on January 11 as trends in the GIFT Nifty indicate a positive start for the broader index with a gain of 15.5 points.
On January 10, the BSE Sensex jumped 272 points to 71,658, while the Nifty 50 was up 74 points at 21,619 and formed bullish candlestick pattern with long lower shadow on the daily timeframe, indicating buying interest at lower levels.
"Technically, this pattern indicates false downside breakout of the immediate support of 21,500 levels by an emergence of renewed buying from the lows," Nagaraj Shetti, senior technical research analyst at HDFC Securities said.
After closing below, with the immediate support of 10-day EMA (exponential moving average) at 21,550 in the last couple of sessions, Nifty failed to show any sharp follow-through weakness/decisive downside breakout and bounced back smartly from the lower levels. This is a positive indication, he feels.
Hence, he further feels the short-term trend of Nifty seems to have reversed up after a minor decline of the last two sessions. "The Nifty is now expected to retest the upper trajectory around 21,750-21,850 levels in the next few sessions. Immediate support is placed at 21,450 levels," Nagaraj said.
According to Kunal Shah, senior technical & derivative analyst at LKP Securities, if the index manages to close above 21,700-21,750 levels, then the index might see the Nifty reaching 22,000. The fear index India VIX dropped further, down by 2.2 percent to 12.97 levels, giving the comfort for bulls.
The pivot point calculator indicates that the Nifty is likely to see immediate resistance at 21,636 followed by 21,689 and 21,763 levels, while on the lower side, it can take support at 21,496, followed by 21,450 and 21,377 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 15.5 points. GIFT Nifty futures stood at 21,710 points after making a high of 21,735 points.
Trade setup for Thursday: Top 15 things to know before the opening bell
US Markets
Stock futures oscillated near the flat line Wednesday evening, with Wall Street preparing for the latest inflation data and the start of the fourth-quarter earnings season.
Futures tied to the S&P 500 added 0.04%, while Nasdaq 100 futures ticked up 0.1%. Dow Jones Industrial Average futures gained 3 points, or 0.01%. In after-hours action, KB Home shares lost 2%. The homebuilder posted fourth-quarter results, issuing full-year revenue guidance of $6.4 billion to $6.8 billion, while analysts polled by FactSet called for $6.62 billion.
Stocks are coming off a winning session, with all three major indexes rising. The S&P 500 added 0.57%, while the Nasdaq Composite gained 0.75%. The 30-stock Dow advanced 0.45%.
European Markets
European markets dipped for a second straight session on Wednesday, as last year's rally continues to stutter. The Stoxx 600 index provisionally closed 0.17% lower, with sectors trading in mixed territory. Mining stocks remained one of the week’s worst performers, down 1.07%, while media stocks rose 0.75%.
Retail stocks were up 0.15%, with British pastry chain Greggs near the top of the European benchmark after reporting a strong increase in sales. Meanwhile, investors were left unimpressed with Sainsbury’s Christmas sales growth, leaving the stock down 6.3%.
Asia-Pacific markets mostly turned lower overnight, although Japan stocks extended gains after notching a 33-year high in the previous session. U.S. stocks were little-changed on Wednesday morning.
Investors are awaiting Thursday’s release of U.S. inflation data for December for further clues on the state of the economy and the path of rate cuts from the Federal Reserve. The U.S. producer price index is then due Friday.
Asian Markets
Asia-Pacific markets rose across the board, with Japan notably extending its record-breaking rally ahead of U.S. inflation figures for December.
The country’s benchmark Nikkei 225 popped 1.88% when trading started, crossing the 35,000 mark briefly for the first time since February 1990, before falling below that level. The Topix also gained 1.49% to hit fresh 33-year highs.
South Korea’s Kospi inched up 0.17%, while the small cap Kosdaq rose 0.72%. Investors in Asia will be keeping an eye on the Bank of Korea, which will be announcing its rate decision. Economists polled by Reuters expect the bank to hold its benchmark lending rate at 3.5% for its eighth meeting in a row.
In Australia, the S&P/ASX 200 started the day 0.42% higher, rebounding from Wednesday’s losses and ahead of the country’s November trade data. Futures for Hong Kong’s Hang Seng index stood at 16,150, also pointing to a stronger open compared with the HSI’s close of 16,097.28.
A $30-trillion Indian economy by 2047 a conservative target, says FM Sitharaman
Making India a $30-trillion economy by 2047 is a "conservative" estimate, according to Finance Minister Nirmala Sitharaman, who sees the state of Gujarat as a key driver of growth on the country's path to becoming a developed nation.
"…by 2027-28, it is believed that we surely will be able to reach the third-largest economy goal about which the Honourable Prime Minister has been speaking with a good sense of confidence… And therefore it is possible that we will be the third largest by 2027-28 but also that our GDP will cross $5 trillion by that time," Sitharaman said on January 10 at the Vibrant Gujarat Global Summit.
"By 2047, as I said earlier, it is a conservative estimate that we will reach at least $30 trillion in terms of our economy," she added.
Exclusive: Post JSW Infra listing, now JSW Cement picks bankers and kicks off mega Rs 6,000-cr IPO
Sajjan Jindal's JSW Group has tapped investment bankers to facilitate the initial public offering of group company JSW Cement, according to multiple people familiar with the development.
"As of now, the target is to raise up to Rs 6,000 crore, mop up growth capital and fund the company's aggressive expansion plans," one of the people cited above said, requesting anonymity. He added that a final decision on the size of the share sale had not been made.
The plan to list JSW Cement, led by Parth Jindal, follows the recent IPO of JSW Infrastructure, which marked the group's first public offering in 13 years. The so-called green cement maker aims to become one of the top five cement producers in the nation, with a capacity of 60 million tonnes per annum within the next five years.
Retail inflation may have hit 4-month high of 5.9% in December on low-base effect
India's headline retail inflation rate likely rose to a four-month high in December, edging closer to the upper-bound of the Reserve Bank of India's (RBI) tolerance range of 2-6 percent.
According to a Moneycontrol survey of 18 economists, Consumer Price Index (CPI) inflation likely increased to 5.9 percent from 5.55 percent in November.
The Ministry of Statistics and Programme Implementation will release retail inflation data for December and industrial production data for November at 5:30 pm on January 12. Economists expect industrial growth, as per the Index of Industrial Production (IIP), to have slumped to 3.5 percent in November. At 3.5 percent, November IIP growth would be the lowest in eight months.
Nouriel Roubini’s unexpected optimism offers glimmer of hope for global economy in 2024
In an unexpected departure from his notorious pessimistic stance, economist Nouriel Roubini, widely known as Dr Doom, has hinted at a more positive outlook for the global economy in 2024.
Roubini, who gained fame for consistently warning of economic crashes, acknowledged the pitfalls of past recession forecasts in a recent Project Syndicate note.
"For now, the worst-case scenarios appear to be the least likely. But any number of factors, not least geopolitical developments, could be this year's forecast spoiler," cautioned Roubini, underscoring the unpredictable nature of global economic dynamics.
Contrary to his historical projections, Roubini sees a potential soft landing for the US and other advanced economies in 2024. This scenario, he believes, is the most favorable for both stocks and bonds, marking a notable shift in his usually gloomy predictions.
HCLTech Q3 profit seen growing 6% QoQ driven by Verizon deal, ASAP acquisition
HCLTech is likely to report better earnings performance than peers, growing both fiscal third quarter revenue and net profit in mid-single digits from the previous quarter.
According to a Moneycontrol poll of six analysts, HCLTech is expected to report a sequential revenue growth of 4.18 percent in the October-December quarter to Rs 27,787 crore, helped by $50-million incremental revenue from the Verizon deal, and additional income from Germany’s ASAP post-acquisition. Net profit for Q3FY24 is expected to grow 6.03 percent quarter-on-quarter to Rs 4,063 crore, riding on the back of revenue growth. HCLTech’s earnings before interest and taxes (EBIT) is expected to rise 5.47 percent sequentially to Rs 5,204 crore, and EBIT margin to improve 13 basis points.
“December is a seasonally strong quarter for the company,” said analysts at Kotak Institutional Equities in a note. “We expect 4.3 percent QoQ growth led by $50 million incremental revenues from Verizon contract, contribution of 1.5 percent to growth; $30 million incremental revenues from ASAP acquisition, driving 1 percent incremental contribution; and $70 million incremental revenues from products business (2.3 percent contribution) from seasonal strength in products.”
Wipro Q3 revenue may fall 4% QoQ amid weak demand; wage hikes to hit margins
Revenue for the third quarter of the current financial year at IT major Wipro Ltd is likely to fall 4 percent quarter-on-quarter (QoQ), weighed by higher than usual furloughs, particularly in the banking, financial services, and insurance (BFSI) and hi-tech verticals, said analysts. This, along with weak discretionary demand and cross-currency tailwinds in Q3 FY24, is expected to keep net profit muted. The company is scheduled to announce October-December results on January 12, 2024.
According to an average estimate of five brokerages, revenue is expected to decline 4 percent QoQ to Rs 22,408 crore. This would be worse than the far end of the management guidance band of -1.5 percent to -3.5 percent revenue growth in the quarter. On the other hand, Wipro's net profit is likely to see a drastic fall of 9 percent QoQ to Rs 2,756 crore.
Aurobindo Pharma now weighs mega IPO of Eugia Pharma Specialities to raise around Rs 4,500 crore
Aurobindo Pharma is in value unlocking mode again, and is now exploring a big-bang initial public offer (IPO) of its wholly-owned subsidiary — speciality generic firm Eugia Pharma Specialities — to raise around Rs 4,500 crore in 2024, multiple industry sources told Moneycontrol.
The Hyderabad-based parent had previously attempted the sale of Eugia and held discussions with top private equity players in 2022, but the negotiations did not fructify into an eventual deal due to differences over valuations.
"With the markets in a buoyant phase and pharma valuations looking attractive, Aurobindo Pharma is now evaluating a listing of Eugia. The deal was kicked off recently with all the advisors," said one of the persons above. A second person told Moneycontrol that the plan is to raise around Rs 4,500 crore via the proposed IPO.
SpiceJet shareholders approve plan to raise funds via issue of shares, warrants
The shareholders of SpiceJet have approved the plan to raise funds via the issuance of equity shares and warrants, the carrier said in a regulatory filing made following its annual general meeting (AGM) on January 10.
The shareholders voted in favour of the "issue and allotment of equity shares on preferential basis", and the "issue and allotment of warrants with an option to apply for and be allotted equivalent number of equity shares on preferential basis", as per the exchange filing.
Ahead of the AGM, it was reported that the beleaguered airline planned to seek nod from stakeholders to raise Rs 2,250 crore to fuel its expansion and revitalisation. The filing, however, did not mention the targeted amount of fundraise towards which the shareholders have given their approval.
The airline's board had, last month, given its nod to the proposal to raise Rs 2,250 crore, through the issuance of up to 130 million convertible warrants and 320.8 million fresh equity shares at an issue price of Rs 50 each.
Oil Prices
Oil steadied on Wednesday, giving up most of its earlier gains, as Middle East supply concerns arising from the Israel-Hamas war and the shutdown of a top Libyan oilfield balanced rising U.S. output and worries about weak economic growth.
While the Organization of the Petroleum Exporting Countries and allies are cutting production to bolster the market, U.S. crude production will hit a record high in 2024, the Energy Information Administration said on Tuesday. Brent crude futures was up 10 cents to $77.69 per barrel, while U.S. West Texas Intermediate crude futures were up 21 cents, or 0.3%, at $72.48.
“Oil prices continue to trade in an untrustworthy fashion,” said John Evans of oil broker PVM. “It seems that thinking can never wander far from the sick man that is Europe.”
Europe’s weak economic outlook weighed on the demand outlook. The euro zone may have been in recession last quarter and prospects remain weak, European Central Bank Vice President Luis de Guindos said on Wednesday.
Crude on Tuesday gained about 2% after losses on Monday of more than 3%. On Sunday Libya’s National Oil Corporation (NOC) declared force majeure at its Sharara oilfield, which can produce up to 300,000 barrels per day.
Dollar Index
The Dollar index traded 0.06 percent lower in futures at 102.57, whereas the value of one dollar hovered near Rs 83.02.
Gold Prices
Gold prices edged up on Wednesday, supported by a slightly weaker U.S. dollar ahead of a critical inflation report that could offer some clues on whether the Federal Reserve will begin cutting interest rates this year.
Spot gold edged up 0.2% to $2,032.90 per ounce. U.S. gold futures rose 0.3% to $2,039.60 per ounce. “If the CPI figures exceed market expectations, perhaps forcing the Fed to delay its policy pivot, that could force bullion to relinquish more of its gains from the final quarter of 2023,” said Han Tan, chief market analyst at Exinity Group.
“However, further evidence of U.S. disinflation taking hold may propel spot gold closer to $2,100 in the immediate term.”
Stock under F&O ban on NSE
The NSE has added Indus Towers, PVR INOX, and Zee Entertainment Enterprises to its F&O ban list for January 11, while retaining Balrampur Chini Mills, Bandhan Bank, Chambal Fertilisers & Chemicals, Escorts Kubota, Hindustan Copper, Indian Energy Exchange, India Cements, National Aluminium Company, Piramal Enterprises, and SAIL to the said list. Delta Corp, and GNFC (Gujarat Narmada Valley Fertilisers & Chemicals) removed from 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) sold shares worth Rs 1,721.35 crore, while domestic institutional investors (DIIs) purchased Rs 2,080.01 crore worth of stocks on January 10, provisional data from the NSE showed.
With inputs from Reuters and other agencies.
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