Key developments that will drive the markets this week

  • India Infoline News Service
  • 03 Jan , 2022
  • 7:40 AM
Domestic markets ended the final week of 2021 with decent with the Nifty settled at 17,354.05; up by 2.1%. The benchmark started the week on a firm note, however, concerns around Omicron hampered investors’ sentiments globally which also kept domestic markets on edge in the middle. The coming week marks the beginning of a new month and participants will be closely eyeing some crucial high-frequency data like monthly auto sales, India Manufacturing PMI and India Services PMI.

Besides, updates on the COVID situation and performance of global markets will also be critical with Union Budget, assembly elections.

Let us look at the key developments this week.

Auto sales in focus

The markets will react today on auto stocks for the monthly sales data released over the weekend. As many companies posted their numbers at the weekend and indicated that the chip shortage is gradually easing.

Maruti Suzuki witnessed a 4.4 per cent yoy decline in sales, largely due to weak domestic growth but reported its highest-ever monthly exports of 22,280 units in December.

Tata Motors clocked a 24 per cent yoy growth in domestic sales for December.

Eicher Motors reported a 25.8 per cent yoy growth in the commercial vehicle segment and its Royal Enfield sales increased 7 per cent yoy.

Escorts saw a 39 per cent down in tractors sales yoy in December 2021.

Mahindra & Mahindra also witnessed a 19 per cent yoy decline in monthly sales but there was an increase in its commercial vehicle and passenger vehicle sales.

Macroeconomic data to watch out

India’s Markit Manufacturing PMI numbers for December will release today, Markit Composite PMI and Services PMI data for December will be released two days later and Foreign exchange reserves for the week ended will be released on January 31.

FII & DII flow

Foreign institutional investors (FII) remained net sellers, the net sold Rs2,217cr worth of shares in the last week of 2021, taking December selling to Rs35,494cr, the second-highest during the year after November.

Domestic institutional investors (DII) continued to support the market, buying Rs4,273cr worth of shares during the week. Total buying in December stood at Rs31,231cr, the highest monthly buying in 2021.

Global cues to look out

United States: A private PMI survey on manufacturing activity in the world's largest economy is due on Tuesday. Minutes of the last scheduled meeting of the US central bank will be released on Thursday. Data on unemployment is due on Friday.

Europe: PMI manufacturing survey data on the United Kingdom is due on Tuesday. Germany's inflation data is due on Thursday.

Asia: PMI manufacturing survey data on China is due on Tuesday. Data on consumer confidence in Japan is slated for a release on Wednesday.

Gold & Silver outlook

MCX Gold remained negative during the week. On the weekly chart, the price remained above 50EMA. The momentum indicator, stochastic on the weekly timeframe is in the bearish crossover. Therefore, the price may remain sideward during the next few days. On the lower end, immediate support is visible at 47,500, below which price may correct towards 46,800. On the higher end resistance is visible at 48,800/49,500.

MCX Silver price remained positive during the week. The price closed below 20EMA on the weekly chart. Stochastic on the weekly timeframe is in the bullish crossover. The bias is expected to remain sideward to positive over the short term. Support is seen at 61,000 whereas resistance is visible at 63,500/64,500.

Covid-19 & Omicron cases in India

According to the public health department, said Maharashtra on Sunday reported 11,877 fresh Covid-19 cases along with 9 deaths. The state also detected 50 new Omicron cases taking the total tally of the new variant to 510, 2,069 recoveries were also reported in the state. Active cases in Maharashtra stand at 42,024.

Mumbai on Sunday recorded 8,063 new Covid-19 cases along with 578 recoveries. The city had on Saturday reported 6,347 infections. The active Covid cases in Mumbai stand at 29,819.

Global coronavirus infections hit a record high over the past seven-day period, with an average of just over a million cases detected a day worldwide between December 24 and 30, up some 100,000 on the previous peak.

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India Manufacturing PMI at 54 in March; Production and sales expand at slowest rates in 6-months

  • India Infoline News Service
  • 04 Apr , 2022
  • 5:00 PM
Business conditions in India improved in March, but the latest results showed slower expansions in factory orders and production as well as a renewed decline in new export orders.

Posting 54.0 in March, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index® (PMI®) signalled a further improvement in the health of the sector. However, falling from 54.9 in February, the latest reading highlighted the joint-weakest rate of growth since September 2021.

Pollyanna De Lima, Economics Associate Director at S&P Global, said: “Manufacturing sector growth in India weakened at the end of fiscal year 2021/22, with companies reporting softer expansions in new orders and production. "The slowdown was accompanied by an intensification of inflationary pressures, although the rate of increase in input costs remained below those seen towards the end of 2021.”

"Goods producers signalled higher prices paid for chemicals, energy, fabric, foodstuff and metals, despite supplier performance worsening to the least extent in almost a year. Once again, we saw the transfer of rising cost burdens to clients, with charge inflation at a five-month high. For now, demand has been sufficiently strong to withstand price hikes, but should inflation continue to gather pace we may see a more significant slowdown, if not an outright contraction in sales. "Companies themselves appeared very concerned about price pressures, which was a key factor dragging down business confidence to a two-year low," Pollyanna De Lima said.

India Manufacturing PMI at 54.9 in February; Business optimism improves to 4-month high

  • India Infoline News Service
  • 03 Mar , 2022
  • 8:06 AM
February PMI data showed another improvement in the health of the Indian manufacturing sector as firms responded to strong increases in new work intakes by lifting production, input buying and stocks of purchases. Employment fell at the softest pace for three months, while favourable demand conditions supported an improvement in sentiment which reached the strongest since last October.

The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) was at 54.9 in February, up from 54.0 in January and signalling a stronger improvement in the health of the sector. Growth has now been seen in each of the latest eight months, with the headline figure remaining above its long-run average of 53.6.

On the price front, strengthening demand for raw materials led to another marked rate of input price inflation, albeit one that was the softest for six months. Selling prices rose modestly, however.

Sustained sales growth supported a further upturn in manufacturing sector output in February. The rise in production was the eighth in successive months and quickened from that seen in January.

New orders and output rose across each of the three broad areas of the manufacturing sector. For both measures, rates of expansion picked up at intermediate and capital goods firms but eased at consumer goods makers. Nevertheless, consumer goods were the best-performing sector in February, and for the third month in a row.

Commenting on the latest survey results, Shreeya Patel, Economist at IHS Markit, said: "Latest PMI data for India's manufacturing sector revealed an improvement in operating conditions in February. Output and new orders expanded at stronger rates, while buying activity continued. At the same time, sustained increases in backlogs could lead to higher employment levels in the months ahead should capacity pressures continue."

"There were, however, some key concerns that continued to threaten growth. Most prominently, costs pressures remained elevated as a result of shortages while delivery times lengthened once again. However, a key threat to manufacturers comes from only marginal increases in selling prices. Despite expenses rising sharply, firms passed on only part of this burden to clients, suggesting pressure on profit margins. “For now, India's manufacturing sector has weathered the storm of the Omicron variant, undoubtedly supported by the relatively high inoculation rate. Moreover, demand conditions showed notable signs of resilience and price pressures somewhat receded," Patel added.


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  • 04 April, 2022 |
  • 7:34 AM

Posting 54.0 in March, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index® (PMI®) signalled a further improvement in the health of the sector.

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