Sensex hovers near 60K; breadth positive

The benchmark indices were trading higher in mid-morning trade, supported by banks, financial services and metal stocks. The Nifty hovered a tad below 17,850 mark.

At 11:30 IST, the barometer index, the S&P BSE Sensex, jumped 108.25 points or 0.18% at 59,964.18. The Nifty 50 index added 37.70 points or 0.21% at 17,842.95.

In the broader market, the S&P BSE Mid-Cap index rose 0.32% while the S&P BSE Small-Cap index gained 0.05%.

The market breadth was positive. On the BSE, 1,714 shares rose and 1,544 shares fell. A total of 109 shares were unchanged.

Foreign portfolio investors (FPIs) bought shares worth Rs 1,273.86 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 532.97 crore in the Indian equity market on 4 January 2022, provisional data showed.

Economy:

On 4 January 2022, the former State Bank of India chairman Rajnish Kumar, at a virtual event organised by the IMC Chamber of Commerce and Industry, said that India needs to accelerate economic growth to above 8% to achieve its target of becoming a $5-trillion economy by 2025.

India Services PMI:

The seasonally adjusted India Services Business Activity Index fell a three-month low of 55.5 in December, rom 58.1 in November.

Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit, said: "2021 was another bumpy year for service providers and growth took a modest step back in December. Still, the latest readings pointed to robust increases in sales and business activity compared to the survey trend.

"Moreover, owing to the buoyant performances seen in October and November, the average growth rate for output over the third quarter of fiscal year 2021/22 was the strongest since the three months to March 2011.

"Services firms were generally confident that output would increase in 2022, but fears of new COVID-19 waves and price pressures somewhat hindered optimism.

"Encouragingly, inflationary pressures in the service economy showed signs of abating at the end of 2021, as both input costs and output charges rose at the slowest rates in three months.

"Uncertainty surrounding the outlook, and a general lack of pressure on capacity, led to a renewed fall in employment during December. That said, the decline was marginal and a recovery is expected this year should demand for services remain favourable."

Buzzing Index:

The Nifty Financial Services index rose 1.08% to 18,167.05. The index added 6.13% in the four trading sessions.

Bajaj Finance (up 3.40%), Bajaj Finserv (up 3.36%), Cholamandalam Investment and Finance Company (up 3.04%), Axis Bank (up 1.67%) and ICICI Bank (up 1.57%) were the top gainers in the Financial Services segment.

Stocks in Spotlight:

AU Small Finance Bank soared 10.59%. The bank`s total deposits increased by 49% to Rs 44,278 crore as on 31 December 2021 as against Rs 29,708 recorded on 31 December 2020. The deposits have risen by 13% as compared with Rs 39,034 crore as on 30 September 2021. CASA ratio was 39% as on 31 December 2021 as compared with 22% as on as on 31 December 2020 and 30% as on 30 September 2021. Average cost of funds was 5.9% in Q3 FY22 as compared with 6.7% in Q3 FY21 and 6.1% in Q3 FY21.

Gross advances were at Rs 40,723 crore as on 31 December 2021, up 33% Y-o-Y (year-on-year) and up 12% Q-o-Q. Fund-based disbursement amounted to Rs 8,152 crore (up 33% Y-o-Y and up 59% Q-o-Q) while non fund-based disbursements aggregated to Rs 627 crore (up 55% Y-o-Y and up 48% Q-o-Q) in Q3 FY22.

Force Motors rose 0.69%. The auto maker said that its total auto production in December 2021 was 1,609 units, increasing nearly 28% Y-o-Y and 41.7% M-o-M (month-on-month) basis. The company recorded domestic sales of 1,442 units, rising 83% year on year and 86.7% on month-on-month basis. Exports in December 2021 stood at 215 units, falling 27.6% on a year on year basis and 40.6% on a sequential basis.

Bharti Airtel gained 0.24%. The telecom major announced a joint venture with Hughes Communications India to provide satellite broadband services in India. The combined India Very Small Aperture Terminal (VSAT) operations of both companies will offer wide range of satellite and hybrid network solutions to business and government customers.

Global Markets:

Most Asian stocks traded lower on Wednesday, 5 January 2022, with investors awaiting the minutes from the Fed`s meeting in December, due later in the day, and the U.S. jobs report, due to be released on Friday, for clues on the Fed`s potential pace of the hikes.

In US, the Dow Jones Industrial Average scored a record closing high on Tuesday for the second straight day as financial and industrial shares rallied, while the Nasdaq fell.

On the macro front, the Institute for Supply Management said on Tuesday that its index of US factory activity fell to a reading of 58.7 last month from 61.1 in November, the lowest tally since last January.

Meanwhile, global benchmark Brent crude jumped on Tuesday to $80 a barrel, its highest since November, as OPEC and its non-OPEC allies, known collectively as OPEC+, agreed to stick to its planned increase for February based on indications that the Omicron coronavirus variant would have only a mild impact on demand.

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