INDIA: The market is likely to start off in the red as trends in the SGX Nifty indicate a negative start for the broader Indian index with a loss of 35 points.
The BSE Sensex fell 208 points to 62,626 while the Nifty50 shed 58 points to 18,643 and produced a bullish candle on the daily charts because the closing was higher than the opening levels.
The pivot charts place the Nifty’s primary support level at 18,596, followed by 18,578 and 18,548. On an upward movement of the index, 18,655, 18,673, and 18,702 are important resistance levels to keep an eye out for.
We have compiled a list of important headlines that could impact both Indian and global markets:
Wall Street closed Tuesday’s trading day down, with the S&P 500 extending its losing skid to four sessions as jittery investors worried about Federal Reserve rate hikes and additional warnings of an impending recession.
Markets were driven down by Meta Platforms Inc., whose shares fell 6.8% after news that European Union regulators said the business should not compel consumers to consent to tailored ads based on their online behaviour.
The Dow Jones Industrial Average sank 350.76 points, or 1.03 percent, to end at 33,596.34; the S&P 500 dropped 57.58 points, or 1.44 percent, to conclude at 3,941.26; and the Nasdaq Composite fell 225.05 points, or 2 percent, to close at 11,014.89.
As recession fears weigh on markets, shares in the Asia-Pacific region tumbled on Wednesday after major U.S. indices dropped more than 1% each overnight.
Early trading saw a 0.69 percent decline in the Nikkei 225 in Japan and a 0.17 percent decline in the Topix. The Kospi in South Korea fell 0.47 percent. The largest MSCI index of Asia-Pacific stocks outside Japan fell 0.28 percent.
Australia’s S&P/ASX 200 index dropped 0.86 percent as the country’s third-quarter economic growth of 0.6 percent fell short of expectations.
The broader Indian index is expected to open down 35 points based on trends in the Singapore Exchange Nifty. On the Singapore exchange, Nifty futures were trading at about 18,717 levels.
RBI likely to hike rates by 35 bps
The Reserve Bank of India will increase interest rates by a lower 35 basis points to 6.25 percent in December, and economists expect another tiny hike to occur early in the next year to allay any lingering concerns about inflation.
A strong two-thirds majority came to the conclusion that it was still too early for the central bank to quit keeping an eye on inflation, which dropped to 6.77 percent in October after remaining above the upper limit of the RBI’s tolerance band of 2–6 percent throughout the year.
33 experts, or more than 60% of those surveyed between November 22 and 30, predicted that the RBI would increase its benchmark repo rate by 35 basis points to 6.25 percent at its policy meeting on December 5-7.
Eleven respondents predicted a 50 bps increase in the future, while eight others predicted a 25 bps increase.
Fitch expects a high RBI
The Reserve Bank of India (RBI) may raise the repo rate by 25 basis points on December 7 before remaining on hold for the entirety of 2023, as per Fitch Ratings.
Fitch stated in the December edition of its Global Economic Outlook report, which was released on December 6, that “the RBI has raised rates by a cumulative 190 basis points since the start of the tightening cycle in April 2022, lagging behind the (US) Fed’s 350 basis point increases over the same period.”
Oil prices slump
In frantic trading on Tuesday, US oil prices plunged to their lowest settlement levels of the year, with Brent ending below $80 a barrel for the second time in 2022, as investors fled the erratic market amid an unsteady economic climate.
To settle at $79.35 per barrel, Brent crude futures declined $3.33, or 4%. WTI crude futures dropped $2.68, or 3.5 percent, to end at $74.25 a barrel, which is the lowest price they have ever settled at in 2018.
Sebi relaxes rules
The central government’s ability to strategically divest itself of public sector undertakings (PSUs) is subject to regulatory relaxation by the capital markets regulator Sebi, as stated in a notification.
In a notification made public on Tuesday, Sebi stated that if an application is made by the Central Government regarding its strategic disinvestment in a listed entity, “the Board (Sebi) may, after due consideration of the interests of the investors and the securities market and for the development of the securities market, relax the strict enforcement of any of the requirements of these regulations.”
Fitch retains the Indian economy’s growth forecast
On Tuesday, Fitch Ratings maintained its 7 percent prediction for India’s economic growth for the current fiscal year, claiming that the country may be among the emerging countries with the fastest growth rates this year.
It nevertheless reduced the forecasts for the upcoming two fiscal years, indicating that while the nation is somewhat protected from shocks to the world economy, it is not immune to developments on a global scale.
Fitch predicts growth of 7% for the fiscal year ending in March 2023 in light of the better-than-expected outcome (FY23).
In its Fitch20 coverage, it stated that India “is anticipated to have one of the quickest growth rates among emerging countries this year.”
Given that India’s economy is domestically oriented and that the majority of its GDP is made up of investment and consumption, it is somewhat protected against shocks in the global economy.
Stocks under F&O
Punjab National Bank has been added to the National Stock Exchange’s F&O ban list for December 7, while GNFC and Indiabulls Housing Finance have remained on it.
Companies whose derivative contracts have exceeded the market-wide position limit by 95% are among the securities that are therefore prohibited under the F&O section.
FII and DII data
Provisional information available on the NSE shows that on December 6, foreign institutional investors (FIIs) net-sold shares worth Rs. 635.35 crore, while domestic institutional investors (DIIs) net-offloaded shares worth Rs. 558.67 crore.