The benchmark indices opened weak at the opening bell on the stock markets today. At 09:16 AM, the Sensex was down 287.31 points or 0.47 percent at 60,467.55. The broader Nifty was down 83.20 points or 0.46 percent at 18,029.80. About 952 shares have advanced, 1166 shares declined, and 94 shares are unchanged. . Nifty Bank was 64.50 points 0.17 percent at 38,145.80.
Among major losers on the Nifty were Tech Mahindra, IndusInd Bank, Shree Cements, Eicher Motors and Power Grid Corp. Early gainers were Bajaj Finance, ONGC, M&M, Tata Steel and Bajaj Finserv
Nifty closed lower on January 18 closing below the lows of the previous four sessions. Weak global cues resulted in this weakness even as traders opted to take profits after a dream uprun in mid and smallcaps. At close, Nifty was down 1.07 percent, or 195 points at 18,113. In the process, Nifty registered its worst fall in 2022.
Advance decline ratio has fallen sharply to below 1:3 suggesting broad based profit taking. The Nifty has formed a bearish engulfing pattern. Hence unless it crosses the high for Jan 18, i.e. 18351, we could see sell-on-rises scenario. A breach of 18,056-18,081 could lead to further weakness in the Nifty.
Gold unchanged
COMEX gold trades little changed near $1812/oz after a 0.2 percent decline yesterday. Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities said, gold trades in a range as support from inflation concerns, rising virus spread and geopolitical issues is countered by higher US and global bond yields, firmness in US dollar and lack of ETF buying. Gold continues to trade in a broad range of $1780-1830/oz range and this may continue with mixed factors in place. However, higher yields may keep pressure on prices.
Crude trades 1% high
NYMEX crude trades over 1 percent higher above $86/bbl and has tested the highest level since October 2014. Crude oil has rallied sharply on supply concerns amid increased Russia-Ukraine tensions over invasion fear, threats of more attacks on UAE by Yemeni Houthis and shutdown of a Iraq-Turkey pipeline. Also supporting price is OPEC’s robust demand outlook. Crude has continued to set fresh highs indicating bullish sentiment and prices may remain higher ahead of US inventory report tomorrow, said Ravindra Rao, CMT, EPAT, VP- Head Commodity Research at Kotak Securities.
Stocks to watch out for
Markets may witness volatile session as Bajaj Auto, Larsen & Toubro Infotech, JSW Energy, Aptech, CCL Products (India), Ceat, JSW Ispat Special Products, Mastek, Nelco, Saregama India, Tata Communications, Tata Investment Corporation, Tejas Networks, Trident Texofab and some others will release quarterly earnings on January 19.
FIIs data
Foreign institutional investors (FIIs) net sold shares worth Rs 1,254.95 crore, while domestic institutional investors (DIIs) net offloaded shares worth Rs 220.20 crores. The negative takeaway is that both the institutions sold shares for second consecutive day. The street will be also bit apprehensive as scorching inflation is seen hurting retail sales. The Street also fears that Omicron variant has still not subsided.
Asian stocks decline in early trade
Most Asian stocks fell Wednesday following a Wall Street selloff in the wake of a surge in Treasury yields, as the prospect of Federal Reserve monetary tightening to fight high inflation weighs on markets.
US stocks close sharply lower
All three major US stock benchmarks closed sharply lower Tuesday, with losses led by the technology-laden Nasdaq Composite Index, as the high-growth tech sector fell under pressure from climbing Treasury yields and investors began digesting a busy week for company earnings.
The Nasdaq dropped most among major indexes on Tuesday and now has fallen about 9.7 percent from its November 19 record closing high, close to confirming a 10 percent correction for the first time since early 2021. The tech-heavy index also closed below its 200-day moving average, a key technical support level, for the first time since April 2020
Microsoft A blockbuster tech deal was also in the spotlight, after Microsoft Corp. said it had reached an agreement to acquire Activision Blizzard Inc. in an all-cash deal valued at $68.7 billion.
The yield on the 10-year Treasury note rose 9.5 basis points Tuesday to 1.866 percent, the highest in about two years. The yield on the 2-year Treasury note which is more sensitive to Fed policy expectations, shot up 7.3 basis points to 1.038 percent to reach the highest level since late February 2020. Crude-oil prices, meanwhile, traded at their highest level since 2014.
US economic data
In US economic data, the New York Fed’s Empire State index of business conditions nosedived to -0.7 in January from 31.9 in the prior month, reflecting fresh strains from the omicron virus and ongoing supply-chain bottlenecks.
A BofA survey showed that fund managers had cut their overweight positions in tech to their lowest levels since 2008, while another survey by Deutsche Bank found that a majority of respondents believed U.S. technology stocks are in bubble territory.
Oil prices at 7-year high
Oil prices on Tuesday climbed to their highest since 2014 as investors worried about global political tensions involving major producers such as the United Arab Emirates and Russia that could exacerbate the already tight supply outlook, Reuters said.
The risk added a premium to prices during the session. Brent crude futures rose $1.03, or 1.2 percent, to settle at $87.51 a barrel. U.S. West Texas Intermediate (WTI) crude futures ended $1.61, or 1.9 percent, higher at $85.43 a barrel.
Six stocks under F&O ban
Six stocks - BHEL, Escorts, Granules India, Indiabulls Housing Finance, Vodafone Idea, and SAIL - are under the F&O ban for January 19.
