Sell-off in the global markets, inflation outlook, concerns over monetary policy tightening, and Omicron variant woos caused Indian stock markets to tumble during the week. After clocking gains last week, both Sensex and Nifty fell 3%, ending at 57,011.74 (down 1,774.93) and 16,985.20 (down 526.1) respectively, the highest weekly fall since February 2021. Bank Nifty had an even worst fall, ending 4% down at 35,618.65.
The BSE Mid-Cap index declined 4.53% and the BSE Small-Cap index fell 2.75%. India’s inflation based on the wholesale price index (WPI) surged to 14.2% on the back of higher food prices.
On the positive side, according to the Ministry of Commerce and Industry, India registered the highest ever annual foreign direct investment (FDI) Inflow of $81.97 billion (provisional figure) in the financial year 2020-21. FDI inflows in the last seven financial years (2014-21) stands at $440.27 billion, which is nearly 58% of the total FDI inflow in the last 21 financial years
|Top Loser(Nifty 50)|
|Top Gainer (Nifty 50)|
🔭 Market Outlook
Nifty is trading below the level of short-term moving averages on its daily chart and made a closing below the level of 100 SMA with a “Bearish” candle. On the weekly front, the index made a “Bearish” candle and is trading near the level of the short-term moving average. If you combine both data points, it looks like further consolidation may be on the cards. However, you can expect some stock-specific rally. To witness a bounce back towards 17,300 and 17,400 levels, Nifty will have to cross the 17,150 level. On the downside, if it goes below 16,950 then it can touch 16,800 and 16,500 levels.
Bank Nifty Outlook
On the daily chart, you can see that Bank Nifty is trading near the 200 SMA for the third consecutive week and on the weekly chart it has made a “Doji” candle. When you combine both the data points, you can see that the Bank Nifty is showing more signs of weakness compared to the Nifty.
This week Bank Nifty closed at 35,800 levels. In the coming trading session if it holds below 35,700 then weakness could take it to 35,350 and 34,800, whereas minor resistance on the upside is capped around 36,300-36,500 levels.
📺 Quick bites
Few Headlines That Should Be on Your Radar
- Wipro announced that it signed an agreement to acquire US-based LeanSwift Solutions for $21 million. The acquisition is in line with Wipro’s strategy to invest and expand its cloud transformation business.
- Vodafone Idea (Vi) has partnered with Hungama for a music streaming service.
- Paytm reported over two-fold rise in its gross merchandise value to about ₹1,66,600 crore in the first two months of the third quarter of this fiscal.
- RBI slaps ₹30 lacs penalty on ICICI Bank for violation of rules related to ‘levy of penal charges on non-maintenance of minimum balances in savings bank accounts.
- Tata Motors has tied up with Bandhan Bank for retail finance for its range of passenger vehicles.
- Infosys’ wholly-owned subsidiary Infosys Consulting has acquired Singaporean telecom major Singtel’s delivery center in Malaysia.
- RBI imposed ₹1.8 crore penalty on PNB related to the bank’s shareholding in borrower companies, as pledgee, of an amount exceeding 30% of the paid-up share capital of those companies.
- Hindalco Industries Limited signed a definitive agreement to acquire Hydro’s aluminum extrusions business in India for ₹247 crores.
- Bharat Electronics has received an order worth ₹2,400 crores from Hindustan Aeronautics (HAL) for the manufacture and supply of 20 types of airborne electronic systems to be fitted on the fighter aircraft.
- India’s retail inflation rose to 4.91% in November, however, it stayed within RBI’s target of 2-6%.
- India’s wholesale price inflation (WPI) jumped to 14.23% in November 2021. This is the highest since April 2005.
- Private sector investment in road construction till November this financial year stood at ₹15,164.25 crores, as per Road Transport and Highways Minister, Mr. Nitin Gadkari.
- The Bank of England hiked its interest rates on Thursday for the first time since the pandemic started.
- U.S. Congress on Tuesday approved raising the federal government’s debt limit by $2.5 trillion, to about $31.4 trillion.
🚀 IPO Corner
- CMS Info System Limited IPO Date: 21st Dec to 23rd Dec Price Band: ₹205-216 Issue Size: ₹1,100 crores
IPOs during the week:
- MedPlus Health IPO was subscribed 52.59 times at the end of Day 3 of bidding.
- Data Patterns IPO was subscribed 119.62 times at the end of Day 3 of bidding.
- HP Adhesives IPO was subscribed 20.96 times on the last day of bidding.
- Supriya Lifescience IPO was subscribed 25.38 times at the end of Day 2 of bidding.
IPO Listed last week:
- Anand Rathi Wealth had made a decent debut, Company’s shares were listed at a 9% premium over the issue price.
- Tega Industries Limited had made a strong market debut, Company’s shares were listed at a 68% premium over the issue price.
Other IPO News:
- Byju’s is reportedly in advanced discussions to go public through a special purpose acquisition company (SPAC) merger.
🔌EV and Sustainability Corner
- TVS Motor and BMW Motorrad jointly develop electric vehicles targeted at urban youth globally.
- Switch Mobility Ltd., the electric vehicle arm of Ashok Leyland, has announced the setting up of an advanced manufacturing and technology center in Castilla y León, Spain, at an investment of about €100 million spread over the next 10 years. The hub will comprise two state-of-the-art production lines and is expected to see the first buses produced in Q4 of 2022.
- The Union Cabinet on Wednesday approved a ₹76,000 crore incentive plan for semiconductor and display board production, doubling down on the Centre’s push to make India a global electronics production hub.
- Bharat Petroleum has tied up with Bhabha Atomic Research Centre for an electrolyzer technology for green hydrogen as it seeks to achieve net-zero emissions by 2040.
- American auto component maker Dana said India offers huge opportunities for the company in the EV space. The company earlier this year made a minority investment in Switch Mobility to develop EV drivetrains with Ashok Leyland’s electric commercial vehicle arm.
- India subsidiaries of Suzuki Motor Corporation and Toyota Motor Corporation are co-developing a pure-born electric car platform in anticipation of the disruption of electric vehicles (EVs).
- Ola Electric has commenced deliveries of its S1 scooter.
- Competition Commission of India (CCI) has approved the acquisition of a shareholding in Sterling and Wilson Renewable Energy Limited by Reliance New Energy Solar Limited.
- BPCL has been ranked India’s top oil and gas company for its sustainability performance in the 2021 edition of the S&P Dow Jones Sustainability Indices (DJSI) Corporate Sustainability Assessment (CSA).
- TP Saurya Ltd. (TPSL), a wholly-owned subsidiary of Tata Power Ltd, has received the ‘Letter of Award’ (LoA) from Maharashtra State Electricity Distribution Company Ltd for setting up a 300-MW hybrid wind-solar power project. With this, the total renewable capacity of Tata Power will reach 4,907 MW, with an installed capacity of 2,953 MW and 1,954 MW under implementation.
- PFC signed an agreement to lend ₹275 crores for the deployment of 350 electric buses across nine cities of Uttar Pradesh.
That’s all for this week’s market wrap-up. We will be back with new market insights next week!