Barometers extend gains; Financial stocks in demand

The benchmark indices continued its gains during mid-afternoon trade, buoyed by oil & gas, bank and financial stocks. The Nifty hovered above 17,700 level.

At 14:30 IST, the barometer index, the S&P BSE Sensex, soared 437.97 points or 0.74% at 59,621.19. The Nifty 50 index surged 106.50 points or 0.60% at 17,732.20.

In the broader market, the S&P BSE Mid-Cap index fell 0.13% while the S&P BSE Small-Cap index rose 0.13%.

The market breadth was positive. On the BSE, 1,775 shares rose and 1,562 shares fell. A total of 123 shares were unchanged.

COVID-19 Update:

India recorded 37,379 new cases in the last 24 hours taking the country`s active caseload to 1,71,830. Active cases accounted for less than 1% of total cases, currently at 0.49%. The country`s omicron tally stands at 1,892.

The Punjab government has prohibited movement for non-essential activities shall between 10 P.M. to 5 A.M. till 15 January 2021.

Mumbai`s Mayor Kishori Pednekar reportedly said a lockdown will be imposed in the city if daily COVID-19 cases cross the 20,000-mark. Mumbai reported 8,082 cases and two deaths in the last 24 hours.

Economy:

Commerce Minister Piyush Goyal has said India`s exports in December surged 37% on an annual basis to $37.29 billion, which is highest-ever monthly figure. He said India`s exports of goods will cross 400 billion dollars this fiscal. Imports in December too rose by 38% to 59.27 billion dollars on account of an increase in oil imports, which soared 65.17% to 15.9 billion dollars.

Cumulatively, during April-December 2021-22 exports rose by 48.85% to 299.74 billion dollars. Imports during the period increased by 69.27% to 443.71 billion dollars, leaving a trade deficit of 143.97 billion dollars. Federation of Indian Export Organisations (FIEO) President A Sakthivel said looking at the current trend, India will achieve the $400 billion merchandise exports target for the current fiscal.

India`s merchandise exports jumped to a record high in December, so did imports, causing the trade deficit to remain elevated even as it narrowed over the preceding month. Merchandise imports were at $59.27 billion in December, up 38.1% year-on-year and 12% over the previous month. Merchandise exports were at $37.29 billion, up 37% year-on-year and 24.1% over November. The gap between exports and imports stood at $21.99 billion in December compared with $22.91 billion in November.

Sebi Guidelines:

Capital markets regulator Sebi on Monday tweaked the "exercise mechanism" of option contracts on commodity futures. The decision has been taken based on feedback received from stock exchanges and the recommendations of Commodity Derivatives Advisory Committee of Sebi. In a circular, Sebi said the prescribed mechanism will be adopted by exchanges for exercise of the options contracts on expiry.

Under this mechanism, Sebi said All in the Money (ITM) option contracts will be exercised automatically, unless `contrary instruction` has been given by long position holders of such contracts for not doing so. Besides, All Out of the Money (OTM) option contracts shall expire worthless, it said.

Additionally, the markets regulator, Sebi has notified rules for vault managers that allow bourses to set up a gold exchange in the country. The instruments representing gold will be called electronic gold receipts (EGRs) and will be notified as securities. These EGRs will have trading, clearing and settlement features akin to any other securities. The gold exchange, encompassing the entire ecosystem of trading of EGR and physical delivery of gold, is expected to create a vibrant gold ecosystem in India.

Numbers to Track:

The yield on 10-year benchmark federal paper rose to 6.519% as compared with 6.460% at close in the previous trading session.

In the foreign exchange market, the rupee lower against the dollar. The partially convertible rupee was hovering at 74.5125, compared with its close of 74.2850 during the previous trading session.

MCX Gold futures for 4 February 2022 settlement rose 0.18% to Rs 47,800.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, rose 0.03% to 96.24.

In the commodities market, Brent crude for March 2022 settlement rose 18 cents at $79.16 a barrel.

Buzzing Index:

The Nifty Financial Services index rose 0.70% to 17,886.05. The index added 4.49% in the three trading sessions.

State Bank of India (SBI) (up 2.27%), Axis Bank (up 1.42%), Kotak Mahindra Bank (up 1.13%), Cholamandalam Investment and Finance Company (up 1.12%) and ICICI Bank (up 1.08%) were the top gainers in the Financial Services segment.

Global Markets:

Shares in Europe and Asia advanced on Tuesday, 4 January 2022 as positive new year momentum continues in global markets. However, there is still much uncertainty around the COVID-19 pandemic, with multiple countries around the world reimposing restrictions or lockdowns to stop the spread of the highly contagious omicron variant.

China`s factory activity grew at its fastest pace in six months in December, driven by production hikes and easing price pressures, a private survey showed on Tuesday. The Caixin/ Markit Manufacturing Purchasing Managers` Index (PMI) rose to 50.9 in December, from 49.9 in November.

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