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Stock Market LIVE: Sensex tanks 250 pts, Nifty down 100 pts; Metal, IT drag.
Hindalco leads the downward spiral in Metal index as the stock sheds more than 1.5%
Inflation continues to remain in focus
Indices open in red as Sensex is down 250 points and Nifty 75 points
IT index drags with a drop of 1% in early trading, all stocks in red
SBI Life shines in an otherwise depressing start to the day; gains 2%
Under pressure at open as Sensex is around 62,500 pts and Nifty around 18,600. Hindalco, HCL Tech and ONGC tumble, while Bajaj Finance gains. All sectors are in red except PSU Bank with Metal, IT and Pharma shedding the most.
The US services sector showed growth in November and business orders at US factories in October also rose more than expected. The reports make the Fed’s fight against inflation more difficult. Back in India, 2nd day of RBI’s MPC meeting will be in focus.
Gold and Crude
Gold: COMEX Gold trades mildly higher today recovering from the lows of $1778/oz hit in yesterday’s session. After solid gains posted in the previous week, gold gave away a part of gains on Monday as the US Dollar and bond yields recovered amid some encouraging US data prints. The US Dollar recovered from a five-month low as US factory orders and ISM services PMI rose above expectations. With better-than-expected data prints, the Federal Reserve gets more room for extended interest rate hikes that is not good for non-yielding assets like bullion. On the price front, COMEX gold has not sustained above the 252 DMA resistance near $1804. Additionally, $1825 would act as the next hurdle. So, till the said resistances hold, we expect a range-bound move in gold between $1773 to $1820.
Crude: NYMEX WTI crude oil trades 1% higher in today’s early session after a sharp drop in the previous session. Recovery in the US dollar after better-than-expected US data prints has pressurized commodity prices, including oil. Crude oil fell 3.89% in the previous session, once again failing to sustain above the $81.50 resistance level. Apart from dollar, crude will take cues from China’s COVID situation that has been haunting oil markets as well as the Russian oil cap that kicked off on Monday. With EU embargo and the price cap on Russian oil, along with China’s COVID situation, the price might witness wild moves from one direction to another. On the price front, WTI crude oil has once again failed to sustain above $81.50/bbl and fell deep towards $76.77/bbl. The trend seems to be consolidative with immediate support near $76/bbl followed by strong support near $73.60/bbl. There would be resistance near $81.50/bbl on closing.
Vedanta’s high dividend payout to continue.
A Brokerage and research firm interacted with Vedanta (VEDL) to get an update on its ongoing expansion plans, parent’s deleveraging target and more. The highlights of which were – FY24 is the year of commissioning of the ongoing expansion in zinc, aluminium, alumina, coal; high dividend pay-out to continue in FY24 & FY25; focus on curbing carbon emissions at the forefront.
“Vedanta’s low cost status in zinc and efforts to reduce its aluminium CoP below $1,500/t on a sustainable-basis (likely by FY26) will be a long-term positive. The expectation of reopening of China (demand to improve) will help base metal prices to sustain higher, providing a cushion to our financial numbers,” the note stated.
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