The benchmark indices opened flat on first day of trading this week. The Sensex was up 74.88 points or 0.12 percent at 61297.91. The broader Nifty was up 29.30 points or 0.16 percent at 18285.10. About 1674 shares have advanced, 657 shares declined, and 134 shares are unchanged.
Nifty closed flat after 5 days of gains, recovering smartly from the lows. At close Nifty was down 0.01 percent or 2.0 points at 18255.7
Nifty rose for the fourth consecutive week rising 2.49 percent in the longest winning streak since the week ended September 24, 2021. Nifty is now close to 18,500-18,600 resistance band. As we near the Union Budget day, we may not see any major sell-off ahead of it, but some minor corrections of the recent rise are expected, said Jasani.
Nifty has made a near double top in the 18,272-18,287 band. A breach of this is necessary for the Nifty to continue its upmove. Moves in the US market suggests some choppy trading early next week, though Q3 corporate results could provide stock specific opportunities.
Bullion supported by dollar
COMEX gold trades were little changed near $1816/oz after last week’s 1.1 percent gain. Gold remains supported by weaker US dollar, geopolitical tensions, rising virus spread and disappointing US economic data, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities. However, weighing on price is higher US bond yield and weaker investor interest as is evident from ETF flows. Gold continues to trade in the $1780-1830/oz range and this may not change soon with mixed factors in place. The general bias may be on the downside as optimism about US economy and Fed’s monetary tightening may keep a floor to US dollar.
Crude modestly higher
NYMEX crude traded modestly higher near $84/bbl after a sharp 6 percent rally last week. Crude trades near November high supported by cold weather in US, supply issues in Europe, weakness in US dollar and monthly rise in China’s crude imports, said Rao, Kotak Securities. However, weighing on price is rising virus cases, jump in US crude rig count to fresh April highs, China’s plan to release stocks from emergence reserves and mixed trade in equities. Crude has continued to hit fresh highs showing strong upward momentum however prices may halt near highs set late last year with increasing challenges.
Asian markets start on cautious note
Asian share markets got off to a cautious start on Monday as the US earnings season loomed large and a slew of Chinese economic data came in mixed.
US stock close mix on Friday
US stocks closed mixed Friday, but all three major indexes suffered weekly losses as the prospect of rising interest rates and weaker economic data cast some doubt on the strength of the recovery from the COVID-19 pandemic. The Dow closed lower on Friday with a big drag from financial stocks as investors were disappointed by fourth quarter results from big U.S. banks, which cast a shadow over the earnings season kick-off.
New York Fed President John Williams, a key ally of Fed Chairman Jerome Powell, said Friday that he expects economic growth to slow in 2022 to a 3.5 percent annual rate, from an estimated 5.5 percent rate last year, on the spread of omicron.
For the week, the Nasdaq Composite and S&P 500 each slipped 0.3 percent while the Dow fell 0.9 percent.
Stock and bond markets in the US will be closed Monday, January 17 in observance of Martin Luther King, Jr. Day.
Fears of Russian invasion of Ukraine
Fears of a Russian invasion of Ukraine are on the rise, prompting analysts and traders to weigh the potential financial-market shock waves. Oil futures for West Texas Intermediate crude rose 2.1% to settle at $83.82 a barrel for a weekly gain of 6.2 percent. The yield on the US 10-year Treasury note rose 6.3 basis points Friday to 1.771 percent.
US industrial output declines
US industrial output fell 0.1 percent, after a revised 0.7 percent gain in the prior month, and industrial-capacity use edged down to 76.5 percent last month versus 76.6 percent in the prior month.
The US Department of Commerce released data Friday showing retail sales dropped 1.9 percent in December, exceeding the 0.1 percent decline forecast by economists polled by The Wall Street Journal.
A closely followed gauge of US consumer sentiment fell to 68.8 in January from 70.6 in the prior month, marking the second-lowest reading in a decade, with omicron concerns partly attributed to its drop-off.
A warning from the largest US bank JPMorgan Chase & Co that its future profitability may fall below a medium-term target this year cast another pall on the US equity market.
China economy up by 8.1%
China’s economy grew by 8.1 percent in 2021, and industrial production rose steadily through the end of the year and offset a drop off in retail sales. Fourth quarter GDP rose by 4 percent from a year ago, according to China’s National Bureau of Statistics. That’s faster than the 3.6 percent increase forecast by a Reuters poll.
Industrial production rose by 4.3 percent in December from a year ago, the bureau said, also beating Reuters’ forecast of 3.6 percent growth. However, retail sales missed expectations and grew by 1.7 percent in December from a year ago. Analysts polled by Reuters had predicted a 3.7 percent increase. Fixed asset investment for 2021 grew by 4.9 percent, topping expectations for 4.8% growth.
China lowers key interest rate for first time since pandemic
China lowered a key interest rate for the first time since the peak of the pandemic in 2020 as a property-market slump and repeated virus outbreaks dampened the nation’s growth outlook. The People’s Bank of China cut the rate on its one-year policy loans by 10 basis points to 2.85 percent. That’s the first reduction since April 2020. It also slashed the rate on the seven-day reverse repurchase agreements by the same magnitude to 2.1 percent.
Four stocks under F&O ban
Four stocks—Escorts, Indiabulls Housing Finance, Vodafone Idea, and SAIL —are under the F&O ban for January 17.