Santa rally continues

Nifty50: 18,132 ▲ 117.7 (+0.6%)
Sensex: 60,927 ▲ 361 (+0.6%)

Hello!

Both investors and Salman Khan fans are in a 'Dabangg' mood today. (IYKYK & if you don't, read on!)

It looks like Indian markets are hellbent to drive home the point that they are the only 'tiger' this year.

In the previous week, gains asked indices: Hum aapke hain kaun?, but  they look to be in the mood of 'Pyar kia toh darna kya', at least since the last two days.

Even though all of us are more scared of COVID than thappad, China turned out to be a 'Baaghi' of sorts as it lifted the 'No entry' covid curb.

 Meanwhile, in India, states are ramping up preparedness to prevent not-so-'wanted' virus resurgence. All they need is our cooperation to register a 'Jeet'.

Now, sit back like a 'Sultan' as we give you updates on markets, to whom 'hum dil de chuke sanam' !

(P.S: Happy Birthday Salman!)

• The markets registered gains for the second consecutive day.
• Out of the Nifty50 universe, 40 stocks ended higher.
• China’s reopening of the economy buoyed the Indian markets.

Among the Nifty sectoral indices, Metal (+4.2%), PSU Banks (+1.2%) were the top gainers, while FMCG (-0.4%) was the sole loser.

What’s trending

⭐ Sugar rush!

RENUKA (NSE): 57.9 ▲ 3.3 (+6.0%), DWARKESH (NSE): 103 ▲ 7.6 (+7.9%)

Shares of major sugar producers witnessed a strong traction today after the Ministry of Consumer Affairs, Food and Public Distribution announced 100% incentive on sugar sacrificed for ethanol production. The move could boost stock holdings of sugar mills and also increase their monthly allocation for sugar sales. The government has been encouraging sugar mills to divert their excess sugarcane towards ethanol.This is being done in order to achieve the target of 12% ethanol blending in petrol by 2023.

⭐ HEG incorporates new subsidiary

HEG (NSE): 1,043 ▲ 80 (+8.3%)

Shares of the graphite electrode maker rose over 9% intraday. This comes after the company incorporated a wholly-owned subsidiary - TACC. TACC will manufacture graphite anode for Lithium-ion cells and other advanced carbon and anode materials. For this, the company plans to undertake capacity expansion of ₹2,000 crore over the next five to seven years.

⭐ Water recycling stocks shine

IONEXCHANG (NSE): 2,721 ▲ 169 (+6.6%), WABAG (NSE): 329 ▲ 11 (+3.4%)

Shares of companies engaged in wastewater treatment surged today. This comes after the Centre approved 12 projects worth ₹2,700 crore for the rejuvenation of River Ganga. The government initiatives like the National Mission for Clean Ganga could lead to new opportunities for the wastewater recycling companies.

⭐High rise sales rise high

GODREJPROP (NSE): 1,231 ▲ 24 (+2.0%), LODHA (NSE): 1,032 ▲ 8.3 (+0.8%)

India’s housing sales are at an all-time high in 2022, across the top seven Indian cities. It has breached the previous sales record set in 2014. Around 3.64 lakh units were sold in 2022, compared to 2.36 lakh units sold in 2021, rising 54% year-on-year. Meanwhile, in 2014 about 3.43 lakh units were sold. Among the seven cities, Mumbai Metropolitan Region (MMR) registered the highest sales of 1.09 lakh units followed by Delhi NCR.

In Focus

Crude oil hits three-week hattrick

The international Brent crude oil prices climbed above $85 per barrel mark this week. The oil prices have moved up for the third consecutive week. So, what are the key factors behind this latest rally? Let's explore.  

To start with, China has further eased its Covid restrictions. China will stop its compulsory quarantine of inbound travellers, starting 8 January, 2023. This comes after the country ended its zero-Covid policy a few weeks ago. The scrapping of quarantine rules is expected to boost the demand for oil from the world's biggest energy consumer.

Oil prices also drew support from concerns over supply disruption, caused by winter storms in the United States. Almost 1.5 million barrels of daily refining capacity along the US coast was shut. 

Following the rise in oil prices, domestic oil and gas stocks like ONGC and Oil India rose by 3.5% and 5.5%, respectively, in the last two trading sessions. At the same time, the Nifty Oil and Gas index is up by 2.6%, so far, this week. 

However, on the flip side, the current situation doesn’t bode well for the Indian economy. This is because a rise in oil prices could increase import bills and widen the current account deficit (CAD).

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Good to know

What is a current account deficit (CAD)?

Neither can a modern economy work in isolation nor can it produce everything its population needs. Hence imports exist. When the total value of imported goods and services exceeds the value of its total exports, then the current account deficit arises. However, if a country utilises external debt and can generate higher returns than the interest rate on its borrowings, then deficits are not inherently bad news for the economy.

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