Markets drift higher in early trade; breadth strong

The benchmark indices logged strong gains in early trade led by buying demand in oil & gas and bank stocks. At 9:30 IST, the barometer index, the S&P BSE Sensex, jumped 267.64 points or 0.45% at 59,450.86. The Nifty 50 index surged 77.35 points or 0.44% at 17,703.05.

In the broader market, the S&P BSE Mid-Cap index rose 0.50% while the S&P BSE Small-Cap index added 0.75%.

The market breadth was strong. On the BSE, 2,174 shares rose and 566 shares fell. A total of 76 shares were unchanged.

Foreign portfolio investors (FPIs) bought shares worth Rs 902.64 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 803.11 crore in the Indian equity market on 3 January 2022, provisional data showed.

Economy:

India`s exports crossed $300 billion in the first nine months of 2021-22, for the first time ever. December 2021 also saw the highest level of monthly outbound trade at $37 billion. Exports in December recorded a 37% growth over December 2020 with an increase of 37.5% from December 2019.

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.

Stocks in Spotlight:

Maruti Suzuki India rose 1.10%. The company`s total production fell 2% to 1,52,029 units in December 2021 from 1,55,127 units in December 2020.

Vedanta shed 1.17%. The firm`s mined metal production during Q3 FY2022 stood at 2,52,000 tonnes, registering a 3% rise as compared to Q3 FY2021 on account of higher ore production at Sindesar Khurd & Zawar mines and higher feed grade at Rampura Agucha.

Angel One gained 1.67%. Its client base rose 6.3% to 7.78 million in December 2021 from 7.32 million in November 2021.

Dilip Buildcon advanced 3.12%. The construction company bagged a LoA (letter of award) for OB Removal Contract Mining work for Amadand OCP, Jamuna Kotma Area, Tehsil - Kotma, district - Annupur in Madhya Pradesh valued at Rs 2,683.02 crore (including GST) by the South Eastern Coalfield imited (SECL), a subsidiary of Coal India (CIL).

Global Markets:

Asian stocks are trading mixed on Tuesday, 4 January 2022 as data showed accelerating Chinese factory activity growth in December 2021.

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.

In US, the S&P 500 and Dow Jones Industrial Average posted closing record highs on the first trading day of the year on Monday, helped by gains in Tesla Inc and bank shares.

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