Dear Trader…
Indian equity benchmarks ended flat after a volatile session on Friday, halting a five-day winning run amid weak global cues. Benchmark indices started lower and traded in red for most part of the day, as traders got anxious with United Nations’ report that India is forecast to grow at 6.5 per cent in fiscal year 2022, a decline from the 8.4 per cent GDP estimate in previous financial year, and while the country's economic recovery is on a solid path amid rapid vaccination progress, coal shortages and high oil prices could put the brakes on economic activity in the near term.
Benchmarks continued their lackluster trade in afternoon session, as the wholesale inflation across the country rose to 13.56 per cent in December. The high rate of inflation in December 2021 is primarily due to rise in prices of mineral oils, basic metals, crude petroleum & natural gas, chemicals and chemical products, food products, textile and paper and paper products etc as compared to the corresponding month of the previous year. However, key indices managed to trim most of their losses in late afternoon deals, as traders took some support with data showing that exports in December 2021 were $37.81 billion, as compared to $27.22 billion in December 2020, exhibiting a positive growth of 38.91 per cent.
Nifty futures opened at 18220.60 points against the previous close of 18287.25 and opened at a low of 18146.20 points. Nifty Future closed with an average movement of 173.80 points and a decline of around 4.60 points and 18282.65 points...!!
On the NSE, the midcap 100 index will decline 0.02% and smallcap 100 index is closing rise 0.75. Speaking of various sectoral indices, the NSE saw gains in only Realty and IT stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, February gold opened at Rs.47841, fell from a high of Rs.47993 points to a low of Rs.47824 with a rise of 149 points, a trend of around Rs.47885 and March Silver opened at Rs.61911, fell from a high of Rs.62385 points to a low of Rs.61910, with a decline of 4 points, a trend of around Rs.61916.
Meanwhile, domestic rating agency ICRA in its latest report has said the upcoming budget is unlikely to make any provision for recapitalisation of state-owned lenders, as over Rs 3.36 lakh crore has been spent on the banks in the last six years. It also said the banks will raise capital through internal accruals and fundraising from the market, and the lenders have the ability to manage. It noted that courtesy of the over Rs 3.36 lakh crore of fund infusions from the taxpayers, the state-owned banks' stock of net non-performing assets has reduced to 2.8 per cent as of September 2021 from the 8 per cent level of March 2018.
ICRA said with high provisions on legacy stressed assets, the earnings outlook for public banks also seems healthy, as it expects most public banks to incrementally remain profitable and generate growth capital requirements internally. It can be noted that in the past, the bank recapitalisation allocation is one of the most keenly awaited numbers in the annual budget exercise. It said recoveries from legacy NPAs as NARCL (National Asset Reconstruction Company) becomes operational could aid the bottom lines of the banks in the coming years.
Technically, the important key resistances are placed in Nifty future are at 18303 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 18373 – 18404 levels. Immediate support is placed at 18180 – 18088 levels.
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