Indices trade in range; breadth strong

The domestic equities were trading in a range near day's high in morning trade. Oil & gas and bank stocks were in demand. The Nifty was hovering above 17,700 level.

At 10:30 IST, the barometer index, the S&P BSE Sensex, jumped 287.45 points or 0.49% at 59,470.67. The Nifty 50 index surged 76.35 points or 0.43% at 17,702.05.

In the broader market, the S&P BSE Mid-Cap index rose 0.23% while the S&P BSE Small-Cap index gained 0.40%.

The market breadth was strong. On the BSE, 2,058 shares rose and 1,099 shares fell. A total of 118 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:

Commerce Minister Piyush Goyal has said India's exports in December surged 37% on an annual basis to 37.29 billion US Dollars, 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 dollar merchandise exports target for the current fiscal.

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.

Buzzing Index:

The Nifty Oil & Gas index rose 1.25% to 7,525.15. The index added 3.47% in three trading sessions.

ONGC (up 3.22%), Mangalore Refinery and Petrochemicals (up 1.94%), GAIL (India) (up 1.83%), Oil India (up 1.66%) and Indian Oil Corporation (IOCL) (up 1.20%) were the top gainers in the Oil & Gas segment.

Stocks in Spotlight:

Hinduja Global Solutions soared 9.64% after the company said its board will consider bonus issue of equity shares on 6 January 2022. The board of Hinduja Global Solutions will meet on 6 January 2022 to consider interim dividend, if any, for the financial year 2021-22. It will also consider a proposal for declaration of bonus issue of equity shares.

Marico declined 2.87%. The FMCG company said the fast-moving consumer goods sector witnessed slowing consumption pattern. Marico on Monday announced its operational business update for the quarter ended December 2021. The FMCG company said that the quarter was characterised by slowing consumption patterns which affected the sector as a whole. Marico stated that the slowdown in consumption was mainly due to continuing inflation impacting overall disposable incomes as well as rising mobility unleashing some degree of pent-up demand for discretionary goods, services and out-of home consumption.

In the India business, rural demand was sluggish, albeit optical to an extent, given the high base. Revenue growth in the quarter was in double digits, while volumes were flat, owing to the weaker consumption sentiment and a strong base. However, Marico clarified that on a two-year CAGR basis, volume growth was close to medium-term aspiration.

Housing Development Finance Corporation (HDFC) rose 0.42%. The housing financier said it assigned loans of Rs 7,468 crore in the quarter ended December 2021, up by 5.5% from a year ago. HDFC had assigned loans amounting to Rs 7,076 crore in the corresponding December 2020 quarter of the previous financial year. Gross income from the dividend for the quarter ended 31 December 2021 was Rs 195 crore as compared with Rs 2 crore recorded in the same period last year. During the quarter ended 31 December 2021, the profit on sale of investments was nil as against Rs 157 crore in the previous year. As at 31 December 2021, for the purpose of liquidity coverage ratio (LCR), the corporation is carrying approximately Rs 27,000 crore of unencumbered high quality liquid assets (HQLA), held entirely in government securities.

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