Stock market indices open in green: Sensex up over 816 points, Nifty above 16,800

The benchmark indices opened positive on March 16. At 09:16 AM, the Sensex was up 816.35 points or 1.46 percent at 56,593.20. The broader Nifty was up 237.40 points or 1.42 percent at 16,900.40. About 1,690 shares have advanced, 241 shares declined, and 52 shares are unchanged.

All Nifty stocks opened in the green. Among top Nifty gainers were Tata Motors (+3.24 percent), Maruti Suzuki (+2.02 percent), HDFC (+1.88 percent), Asian Paints (+1.87 percent) and Axis Bank (+1.84 percent)

On March 15, the benchmark indices wiped out all the early gains and traded lower for the day due to weak cues from the US and UK market. Nifty broke a five-day winning streak on March 15 led lower by negative global cues. At close Nifty was down 1.23 percent or 208.3 points at 16663.0.

Nifty could not fill the downgap made on 24 February 2022 and corrected. Advance decline ratio fell sharply suggesting that the local investors too seem to have panicked as the war troubles don’t seem to be ending and the US Fed meet outcome is just a day away. This is despite the fact that crude oil prices have dipped after rising towards $128/barrel barely a week back. 16,888-16,471 could be the band for the Nifty in the near-term, said Jasani.

Asian shares up

Stocks rose in Asia Wednesday as Chinese technology shares rebounded from a brutal selloff, though investors remain braced for volatility surrounding Russia’s war in Ukraine and a looming Federal Reserve decision.

A 2.6 percent jump in Hong Kong's Hang Seng index and a 0.5 percent gain in the blue-chip CSI300 index led rises across Asia on Wednesday morning, with MSCI's broadest index of Asia-Pacific shares outside Japan up 1.21 percent. Australian shares were up 1.08 percent, and Seoul's Kospi added 0.55 percent, while Japan's Nikkei stock index rose 1.29 percent.

The gains in Asia followed a relief rally overnight on Wall Street driven by hopes of a resolution in Ukraine. The S&P 500 gained 2.14 percent, the Nasdaq Composite jumped 2.92 percent and the Dow Jones Industrial Average rose 1.82 percent.

US stocks close sharply higher

US stock indexes closed sharply higher Tuesday, with the S&P 500 and Nasdaq Composite snapping three-day losing streaks, after a smaller-than-expected rise in a measure of wholesale inflation and a slump in oil prices which had earlier soared on Russia’s invasion of Ukraine.

Investors continued to monitor developments in the Russia-Ukraine war and prepared for the two-day Federal Reserve policy meeting that’s expected to conclude Wednesday with a rise in benchmark interest rates for the first time since 2018.

US Feb producer-price index up

The US February producer-price index showed a monthly rise of 0.8 percent, lower than the 0.9 percent,rise that economists surveyed by The Wall Street Journal had forecast. The year-over-year rate was unchanged at 10 percent,, the highest level in decades. The New York Fed’s Empire State manufacturing index slumped 14.9 points to negative 11.8 in March. Economists had expected a reading of 5.5.

The yield on the US 10-year Treasury note rose 2.1 basis points to 2.16%, a 52-week high.

Crude enters bear market

US and global benchmark crude oil officially entered a bear market on Tuesday, just five trading days after they settled at their highest prices since 2008. On Tuesday, the front-month April West Texas Intermediate crude futures contract fell $6.57, or 6.4 percent,, to settle at $96.44 a barrel on the New York Mercantile Exchange. That’s down 22 percent, from the March 8 settlement of $123.70, which was the highest finish since August 1, 2008.

Crude oil extended its fall amid China covid lockdowns and easing supply fears. After rapid spread of new variant and ineffectiveness of covid vaccine on new variant prompt Chinese authority to impose lockdown. China has also cancelled thousands of flights to control spread of the virus. Crude oil showed unexpected reaction after China locked down its two megacities. Crude oil also plunged amid possible US-Iran deal and also possibility of returning Venezuela’s oil in to global markets. The U.S. shell oil productions are also rising and cap crude oil prices. However, Russia-Ukraine crisis could support oil prices at lower levels.

The Organization of the Petroleum Exporting Countries on Tuesday said it was leaving its economic forecasts and its estimates of 2022 crude-oil demand and supply growth “under assessment” as it warned that inflation stoked by the Russia-Ukraine war could undercut oil consumption.

Global benchmark Brent crude rose 0.41 percent to $100.30 per barrel, and US crude added 0.45 percent to $96.87 per barrel.

WTI could hold its key support of $93.20 a barrel while Brent could also hold $96 a barrel in today’s session, said Rahul Kalantri, VP Commodities, Mehta Equities Ltd. Crude oil is having support at $93.20–90.00 and resistance is at $101.80–104.40. In INR terms crude oil has support at Rs7,080-6,900; while resistance is at Rs 7,490–7,770.

Japan reports wider-than-expected trade deficit in February

Highlighting the impact of global disruptions and soaring oil costs, Japan reported a wider-than-expected trade deficit in February as an energy-driven surge in import costs caused by massive supply constraints added to vulnerabilities for the world's third-largest economy.

Sebi comes out with clarifications on transactions in MF units

Sebi on Tuesday came out with certain clarifications on transactions in the units of mutual funds and has also given guidelines for authentication in case of redemption of units. The clarifications pertain to transactions in units of mutual funds on stock exchange platforms and also for entities including online platforms other than exchanges.

A circular issued in October 2021 had said that stock brokers and clearing members shall not accept payment through one-time mandate or issuance of mandates or instruments in their name for mutual fund transactions. Mandate includes instrument, authorisation or order in any form, including electronic means, to effect a payment by a person for the purpose of mutual fund investment.

Bullion outlook

On Tuesday, gold and silver extended its fall on Tuesday amid anticipation of interest rate hike by the US Federal Reserve and heavy sell-off in crude oil. The US Federal Reserve’s policy meeting outcome will be released on Wednesday. Market is expecting 25 basis point hikes in this meeting but the Federal Reserve Chairman’s comment on the inflation and Russia-Ukraine war will be directional for the precious metals.

Precious metals also plunged amid crude oil prices slipped below $100 a barrel for the first time in one week and eased safe-haven buying of precious metals. However, disappointing U.S. empire state manufacturing data supported precious metals at lower levels.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd. said, "We expect volatile will remain in today’s session ahead of the FOMC meeting outcome. Gold has support at $1905-1888, while resistance at $1940- 1962 per troy ounce. Silver has support at $24.81-24.64, while resistance is at $25.48-25.70. In INR terms, gold has support at Rs 51,050–50,680, while resistance is at Rs 51,950–52,365. Silver has support at Rs 67,600- 67,100 while resistance is at Rs 68,880–69,350."

Currency outlook

The Indian Rupee weakened towards 76.68 levels on account of opportunistic dollar buying by most oil companies. In the upcoming session, the local unit is likely to trade in a range-bound manner with a slide negative bias towards 76.80 levels as investors indulge in speculation prior to the US Fed Policy release, said Heena Naik, Research Analyst- Currency, Angel One Ltd. In addition, there was news of Russia's Yamal gas pipeline being suspended which could further disturb the supply. Russians had earlier warned of this escalation in response to the EU sanctions on Russian Oil. Despite this, the European Union officials claimed that they continue to import Russian Gas even after sanctions.

Stock under F&O ban

Balrampur Chini Mills is under the F&O ban for March 16.

(With inputs from Reuters)

Published on: Wednesday, March 16, 2022, 09:23 AM IST