Dear Trader…
Indian equity benchmarks closed over half a percent lower but off Friday's intra-day lows, extending the sell-off for the fourth day. The benchmark indices opened on a sharply negative note in tandem with the weak sentiment across the global markets. Traders remained cautious as the government data showed that retail inflation for farm and rural workers rose to 4.78 percent and 5.03 percent respectively in December 2021, mainly due to higher price of certain food items. However, the key indices made a sharp recovery in afternoon trade, as traders took some solace after the payroll data of the Employees’ Provident Fund Organization (EPFO) showed at least 8,27, 979 people joined formal work for the first time in November, showing a marginal uptick in the formal sector job creation over the month-ago period.
Adding some optimism, with a view to boost economic activities slowed down due to the impact of COVID-19, the Finance Ministry has relaxed spending norms for the fourth quarter in a bid to spur capital expenditure. But, key gauges failed to hold recovery and ended lower, as some anxiety remained among traders with a private report stated that institutional investments in real estate fell 81 per cent at $670 million during the December quarter because of lower inflow in office assets.
Nifty futures opened at 17950.00 points against the previous close of 17974.10 and opened at a low of 17694.40 points. Nifty Future closed with an average movement of 274.30 points and a decline of around 166.10 points and 17808.00 points...!!
On the NSE, the midcap 100 index will decline 0.16% and smallcap 100 index is closing rise 0.05%. Speaking of various sectoral indices, the NSE saw gains in only Metal and Realty stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, February gold opened at Rs.48379, fell from a high of Rs.48431 points to a low of Rs.48310 with a rise of 19 points, a trend of around Rs.48396 and March Silver opened at Rs.64502, fell from a high of Rs.64771 points to a low of Rs.64385, with a rise of 183 points, a trend of around Rs.64588.
Meanwhile, domestic rating agency Icra Ratings said that it has revised the asset under management (AUM) growth outlook of retail non-banking financial companies (NBFCs) to 5-7 per cent for the current fiscal (FY22) from an earlier expectation of 8-10 per cent. In the first half of FY22, retail NBFCs grew by less than one per cent.
The agency said the growth outlook would be exposed to downside risk in case of significant disruptions caused by the new wave of infections in Q4 FY22. At present, while the infections rates remain high, the operational disruptions have been quite limited.
The agency's Vice President (financial sector ratings) A M Karthik said ‘apart from the various regulatory changes over the last 3-4 months (such as scale-based regulations, prompt corrective action framework etc) and a muted H1 FY22, we note that some of the key segments of retail-NBFCs, especially vehicle finance, are faced with supply-side constraints, which could pull-down growth vis a vis our expectation, even if the demand remains less impacted by the new wave of infections.’
Technically, the important key resistances are placed in Nifty future are at 17676 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 17737 – 17808 levels. Immediate support is placed at 17474 – 17404 levels.
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