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Navigating the Financial Landscape: Key Pre-market Insights for a Successful Trading Day
Foreign institutional investors (FIIs) net bought shares worth Rs 3,632.30 crore, while domestic institutional investors (DIIs) sold Rs 434.02 crore worth of stocks on December 8, provisional data from the National Stock Exchange (NSE) showed.
The benchmark Sensex and Nifty indices are likely to open marginally higher on December 11 as trends in the GIFT Nifty indicate a positive start for the broader index with a gain of 15 points.
On December 8, the benchmark indices saw record closing highs. The BSE Sensex climbed 304 points to 69,826, while the Nifty50 rose 68 points to 20,969 and formed a small-bodied bullish candlestick pattern with upper and lower shadows, which resembles a High Wave kind of candlestick pattern on the daily charts.
The momentum indicator though is still not in sync, which suggests caution at higher levels. The ideal strategy to trade is to hold on to long positions with a trailing stop-loss mechanism.
On the downside, he feels the crucial support is placed at 20,860 – 20,800 and a dip towards this zone should be used as a buying opportunity as the overall trend is still positive. On the upside, the immediate hurdle is placed at 21,060 – 21,100.
The pivot point calculator indicates that the Nifty is likely to see immediate resistance at 21,001, followed by 21,035 and 21,089, while on the lower side, it can take support at 20,891, followed by 20,857 and 20,803 levels.
Stay tuned to Moneycontrol to find out what happens in the currency and equity markets today. We have collated a list of important headlines across news platforms, which could impact Indian as well as international markets.
GIFT Nifty
The GIFT Nifty indicates a marginally positive start for the broader index with a gain of 15 points. GIFT Nifty futures stood at 21,080 points after making a high of 21,090 points.
stood at 21,080 points after making a high of 21,090 points.
Trade setup for Monday: Top 15 things to know before the opening bell
US Markets
US stock futures were slightly higher on Sunday night as investors await this week’s final Federal Reserve meeting of 2023 for any signals on when central bankers will begin to cut interest rates.
Futures tied to the Dow Jones Industrial Average added 22 points, or 0.06 percent. S&P futures and Nasdaq 100 futures both advanced less than 0.1 percent. This year’s boom in equities is widely expected to continue, with investors becoming increasingly optimistic about further gains after noticing recent diversification within the rally. Gains from the Magnificent 7 group of tech stocks have slowed in comparison to this year’s laggards, such as health care and small-cap companies.
The S&P 500 and the tech-heavy Nasdaq Composite both closed Friday with a six-week winning streak, gaining 0.2 percent and 0.7 percent, respectively. The Dow, meanwhile, was flat for the week.
European Markets
European markets held in positive territory on Friday, as traders around the world assessed key November jobs report out of the US. The pan-European Stoxx 600 index closed up 0.7 percent. Travel and leisure stocks added 1.5 percent to lead gains while mining stocks fell 2.3 percent.
Global mining company Anglo American ended the session at the bottom of the European benchmark, down 19 percent, after announcing a plan to cut its capital expenditure amid a fall in metal demand.
Global attention turned on Friday to November’s US jobs report, as investors try to gauge the likely trajectory of interest rate decisions from the Federal Reserve over the next year.
November’s nonfarm payrolls report showed an unexpected drop in unemployment. The jobless rate fell 3.7 percent, compared to a forecast of 3.9 percent. The US economy added 199,000 jobs during November, slightly ahead of the 190,000 estimate from Dow Jones and the 150,000 added in October.
Asian Markets
Asia-Pacific markets were mostly up on Monday as investors assessed November inflation numbers from China, which declined at a faster-than-expected pace. The consumer price index fell 0.5 percent year-on-year, more than the 0.1 percent drop expected by economists polled by Reuters and the fastest slide since November 2020.
The producer price index fell 3 percent year-on-year, compared with October’s 2.6 percent drop and expectations of a 2.8 percent decline. November also marked the 14th straight month of PPI decline and the quickest since August.
In Australia, the S&P/ASX 200 started Monday up 0.22 percent, on pace for a three-month high. Japan’s Nikkei 225 popped 1.85 percent on its open, while the broad-based Topix saw a smaller gain of 1.55 percent.
South Korea’s Kospi rose 0.3 percent and the small-cap Kosdaq was up 0.96 percent. In contrast, futures for Hong Kong’s Hang Seng index stood at 16,327, pointing to a weaker open compared with HSI’s close of 16,334.37.
India set to overtake Hong Kong as seventh-largest stock exchange
India’s stock market is set to surpass Hong Kong to become the world’s seventh-largest, underscoring the optimism surrounding the economic potential of the world’s most populous nation, the Financial Times reported.
The total market capitalization of all listed companies in India stood at $3.7 trillion at the end of October, slightly trailing Hong Kong’s $3.9 trillion, according to data from the World Federation of Exchanges, a trade body.
The surge in Indian stock prices in November, fueled by growing investor confidence following the better-than-expected performance of the ruling Bharatiya Janata Party in state elections and robust macroeconomic indicators, has set the stage for the country to secure the seventh-largest position globally, behind the New York Stock Exchange, Nasdaq, Shanghai, Euronext, Japan, and Shenzhen.
FPIs invest Rs 26,505 crore in equities in 1st six sessions of Dec
Foreign portfolio investors (FPIs) injected Rs 26,505 crore into the Indian equity markets in the first six trading sessions of this month on expectations of political stability after the BJP stormed to power in three major states and robust economic growth.
This came following a net investment of Rs 9,000 crore in October. Before this, overseas investors withdrew 39,300 crore in August and September, data with the depositories showed. Going forward, FPI inflows are likely to continue.
According to the data, FPIs made a net investment of Rs 26,505 crore in Indian equities in this month (till December 8). Kislay Upadhyay, the founder of FidelFolio Investments, attributed the FPI inflows to the outcome of major state elections that signaled political stability going forward.
The indication of political stability after the 2024 General elections, strong growth momentum in the Indian economy, inflation cooling off, steady decline in US bond yields, and the correction in Brent crude have turned the situation in India's favor. Globally, the US Federal Reserve signaled potential rate cuts starting from the first quarter of next year, indicating a shift away from the high-interest rate environment. This change led to the weakening of the US dollar against other currencies.
Inox India IPO to open on December 14, closing on December 18
Cryogenic equipment manufacturer Inox India has decided to launch its initial public offering on December 14. This would be the third IPO opening for subscription next week after Doms Industries and India Shelter Finance Corporation.
The anchor book of the public issue will be opened for a day on December 13, while the offer will be closing on December 18. The price band for the offer will be announced on December 11. The maiden public issue by InoxCVA consists of only an offer-for-sale of 2.21 crore shares by existing shareholders including promoters. Siddharth Jain, Pavan Kumar Jain, Nayanatara Jain, Ishita Jain, and Manju Jain are among the selling shareholders in the OFS.
Mcap of seven of top-10 most valued firms added Rs 3.04 lakh crore; HDFC Bank, LIC's biggest gainers
The combined market valuation of seven of the 10 most valued firms climbed Rs 3,04,477.25 crore last week, with HDFC Bank and LIC emerging as the biggest gainers amid an overall optimistic trend in equities.
Last week, the BSE benchmark rallied 2,344.41 points or 3.47 per cent. On December 8, the 30-share BSE Sensex rose 303.91 points, or 0.44 per cent, to hit its new peak of 69,825.60. The index touched the highest intra-day level of 69,893.80. HDFC Bank, Life Insurance Corporation of India (LIC), ICICI Bank, Tata Consultancy Services, and Reliance Industries were among the companies that recorded additions in their market valuation.
HDFC Bank's valuation soared by Rs 74,076.15 crore to Rs 12,54,664.74 crore. The market capitalization (mcap) of Life Insurance Corporation of India jumped by Rs 65,558.6 crore to Rs 4,89,428.32 crore at close on December 8. LIC had reclaimed the Rs 5 lakh crore-mark after the shares of the company hit a 52-week high on the bourse on December 7.
China's consumer prices fall fastest in 3 years, factory-gate deflation deepens
China's consumer prices fell the fastest in three years in November while factory-gate deflation deepened, indicating rising deflationary pressures as weak domestic demand casts doubt over the economic recovery.
The consumer price index (CPI) dropped 0.5 percent both from a year earlier and compared with October, data from the National Bureau of Statistics (NBS) showed on December 9. That was deeper than the median forecasts in a Reuters poll of 0.1 percent declines both year-on-year and month-on-month. The year-on-year CPI decline was the steepest since November 2020.
The numbers add to recent mixed trade data and manufacturing surveys that have kept alive calls for further policy support to shore up growth.
Oil Prices
Oil prices rallied Friday, but still booked the seventh straight week of losses as record production and demand worries weigh on prices. The West Texas Intermediate contract for January rose $1.89, or 2.73 percent, to settle at $71.23 a barrel. The Brent crude contract for February gained $1.79, or 2.42 percent, to settle at $75.84 a barrel.
US crude and the global benchmark lost about 4 percent for the week despite Friday’s rebound. The last time WTI booked a seven-week losing streak was five years ago.
Dollar Index
The Dollar index traded 0.43 percent higher in futures at 103.98, whereas the value of one dollar hovered near Rs 83.43.
Gold Prices
Gold retreated back under $2,000 an ounce on Friday as the dollar and Treasury yields strengthened after traders trimmed bets for US interest rate cuts to materialise by March following stronger-than-expected jobs data.
Spot gold fell 1.3 percent to $2,002.80 per ounce after hitting a session low of $1,994.49 earlier. Prices were down 3.4 percent so far for their worst week in ten. US gold futures settled 1.3 percent lower at $2,019.1.
US job growth accelerated in November while the unemployment rate fell to 3.7 percent, signaling underlying labor market strength that made traders bet that it could take the Federal Reserve until May to deliver the first reduction in a series of interest-rate cuts next year.
Gold has slumped as the US employment report showed strength across the board.
FIIs and DIIs
Foreign institutional investors (FIIs) net bought shares worth Rs 3,632.30 crore, while domestic institutional investors (DIIs) sold Rs 434.02 crore worth of stocks on December 8, provisional data from the National Stock Exchange (NSE) showed.
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