Trends on SGX Nifty indicate a positive opening for stock market indices. Indian markets could open higher due to healthy IT company numbers last evening despite mixed Asian markets today and flat US markets on Wednesday, said Deepak Jasani.
Mohit Nigam, Head - PMS, Hem Securities said the benchmark Indices are expected to open on a positive note as suggested by trends on SGX Nifty. Both European and US markets closed in green. Asian markets are giving mixed cues. On Wednesday the market showed directional bias and ended in green for the fourth consecutive day. Despite an exponential rise in covid cases Indian equity markets witnessed strong buying, Nigam said.
Investor sentiments are high and are expecting a good earning season. Markets can witness some consolidation today after being in uptrend for quite some time. Any dip from current levels presents a good buying opportunity and investors should accumulate quality stocks.
On the technical front, the key resistance levels for Nifty 50 are 18,250 followed by 18,290 and on the downside 18150 followed by 18090 can act as strong support. Key resistance and support levels for Bank Nifty are 39,000 and 38,400 respectively, Nigam said.
Nifty rose for the fourth straight session on January 12 aided by positive global cues, receding Omicron threat and resumption in FPI flows. At close, Nifty was up 0.87 percent or 156.6 points at 18212.3. In the process the Nifty closed at its highest in 10 weeks.
Nifty continues its uprun with volumes now back at normal and advance decline ratio also ending in the positive. The Nifty however shows a doji after a rise and a gap up. Breaching and sustaining above the top of January 12 i.e. 18,228 will be crucial for the uptrend to continue. On falls, 18,081 could offer support.
Asian stocks mixed
Asia stocks were mixed in early trade Thursday after a US inflation print intensified calls for interest-rate increases as soon as March.
US stocks close higher
US stock indexes closed with modest gains Wednesday, after a reading on inflation came in near a four-decade high. Stocks were buoyed Wednesday as investors exhaled with relief after the latest reading on inflation, while running hot, wasn’t worse than anticipated
The S&P 500 gained 12.70 points, or 0.27 percent, to end at 4,725.77 points, while the Nasdaq Composite gained 34.27 points, or 0.23 percent, to 15,187.72. The Dow Jones Industrial Average rose 44.59 points, or 0.12 percent, to 36,296.61.
US CPI up
The consumer-price index posted a monthly rise of 0.5 oercebt in December, as prices rose by a near 40-year high of 7 percent from a year ago, while also indicating elevated US inflation could persist well into 2022.
In other economic news, the latest Federal Reserve Beige Book report on economic conditions showed solid growth in the ability of businesses to pass along price gains to customers in December, a departure from recent years.
The yield on the 10-year Treasury note fell 2.1 basis points to 1.724 percent.
Dollar slumps
he dollar fell to a two-month low against a basket of currencies on Wednesday after data, which showed an expected surge in US consumer prices in December, fell short of offering any new impetus for the Federal Reserve's policy normalization efforts.
Retail inflation up
The index of industrial production (IIP) which measures factory output witnessed a growth of 1.4 percent YoY during November which is mainly due to the strong performance which is seen in the mining sector followed by the electricity sector, said Mohit Nigam.
India’s CPI headline inflation rose by 70 bps to 5.6 percent in December '21 vs. 4.9 percent in November '21 although the print was marginally lower than consensus expectations of 5.8 percent. The increase in CPI was led by higher food inflation (doubled to 4 percent from previous month), waning of the favourable base effect and elevated core (CPI excluding food and fuel) and fuel inflation, said Jasani. IIP grew by 1.4 percent in November 21 vs. 4.0 percent in October '21, despite a favourable base (November '20 reading:-1.6 percent). While the slowdown was largely broad-based, manufacturing, capital and consumer durables production took the major hit.
IT stocks
India's largest software exporter TCS reported better than expected quarterly earnings beating all street expectations. Quantum of buyback is much more then we expected and the buyback rate at Rs 4,500 premium of 16.67 per cent over the last traded price of the stock is also over and above street expectations, said Prashant Tapse, Vice President, (Research) at Mehta Equities Ltd.
Infosys reported better than expected quarterly earnings beating all street expectations. The company hiked growth guidance for FY22 to 19.5 percent-20 percent from 16.5 percent-17.5 percent which was above our expectations, said Tapse. The stock could react positively up from Wednesday's closing of Rs 1876, and we are overall optimistic on the stock with medium long-term horizon with a technical target above Rs 2,000 mark in 6-12 months period, Tapse added.
Wipro reported quarterly earnings in-line with street expectation including future CC guidance. Revenues-wise Wipro missed Street expectations and margins were in-line as expected while net profit was almost flat when compared with Rs 2,968 crore reported in the year-ago period, Tapse said.
Based on the results, we expect the stock to react marginally down from Wednesday's closing of Rs 691 and give opportunity to accumulate in the range of Rs 660-675. We are overall optimistic on the stocks with medium to long-term horizon, said Tapse.
Five stocks under F&O ban
Five stocks – Delta Corp, Indiabulls Housing Finance, Vodafone Idea, RBL Bank, and SAIL – are under the F&O ban for January 13.
