Post Session: Quick Review

Indian equity benchmarks altered between green and red for most part of the day and witnessed sharp selling activity in final hour of trade which forced to close the session near day’s low. Key indices made a cautious start and traded flat, as traders remained cautious following weak global cues amid uncertainty about global growth. Sentiment remained in lackadaisical mood with a report that the Reserve Bank of India (RBI) is worried that the National Payments Corporation of India (NPCI), which processes nearly half of all the digital payments across the country, may become a monopoly and be a too-big-to-fail entity in India's retail payments sector.

However, some buying crept in as traders found some solace with the Reserve Bank of India’s announcement of Rs 10,000 crore bond buyback on January 24, 2019, continuing with its commitment to provide adequate liquidity. The central bank had earlier committed to purchase government securities under its open market operations for an aggregate Rs 50,000 crore in January and has so far done Rs 30,000 crore. Some support also came with former RBI governor Raghuram Rajan’s statement that India will eventually surpass China in economic size and will be in a better position to create the infrastructure being promised by the Chinese side in South Asian countries.

Though, key indices failed to hold recovery and witnessed sharp sell-off in late hour of trade, as anxiety remained among traders after a private report showed that India's industrial activity is expected to remain subdued in the near term, owing to muted domestic demand, weak global economic outlook and uncertainty among businesses over the outcome of Lok Sabha elections, 2019. Some anxiety also came with a private report penning that it is important for India to stay the course on fiscal consolidation as aggregate deficit combining central and state deficits has not improved much in the last five years. 

On the global front, Asian markets ended mostly in red on Wednesday, with mounting signs of slowing global growth and concerns over a yet-unresolved Sino-U.S. trade dispute likely to keep investors on edge. European markets were trading mostly in red. Back home, steel sector stocks ended higher with Steel Minister Chaudhary Birender Singh’s statement that India is expected to edge past the US with regard to steel consumption this year. Power stocks were in focus with power minister RK Singh’s statement that the recommendations of a high-level empowered committee (HLEC) on stressed power assets will be placed before the Cabinet soon for approval.

The BSE Sensex ended at 36079.58, down by 365.06 points or 1.00% after trading in a range of 36037.90 and 36521.47. There were 10 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index fell 0.36%, while Small cap index was down by 0.19%.(Provisional)

The few gaining sectoral indices on the BSE were Metal up by 0.55% and Healthcare up by 0.39%, while FMCG down by 1.57%, Power down by 1.19%, Consumer Durables down by 1.04%, PSU down by 0.90% and IT down by 0.78% were the top losing indices on BSE.(Provisional)

The top gainers on the Sensex were Sun Pharma up by 3.03%, Yes Bank up by 2.55%, Tata Steel up by 1.25%, Vedanta up by 0.73% and Bajaj Finance up by 0.59%. (Provisional)

On the flip side, ITC down by 4.66%, Mahindra & Mahindra down by 1.84%, Infosys down by 1.67%, Power Grid down by 1.58% and NTPC down by 1.51% were the top losers.(Provisional)

Meanwhile, in bid to increase liquidity in the market, the Reserve Bank of India (RBI) has decided to infuse Rs 10,000 crore on January 24, 2019. This is in line with its continuous efforts to adhere commitment of providing adequate liquidity. The central bank had earlier committed to purchase government securities under its open market operations (OMOs) for an aggregate Rs 50,000 crore in January and has so far done Rs 30,000 crore.

RBI has decided to conduct purchase of the Government securities under OMOs for an aggregate amount of Rs 100 billion on January 24, 2019 through multi-security auction using the multiple price method. It has been decided based on an assessment of prevailing liquidity conditions and also of the durable liquidity needs going forward. The Central Bank will buyback five securities maturing between June 2019 and December 2033 through the purchase.

The eligible participants should submit their offers in electronic format on the RBI's core banking solution (E- Kuber) system on January 24. The result of the auction will be announced the same day and payment to successful participants will be made on the following day. It can be noted that ever since August, the system is passing through a liquidity deficit which is being bridged by the central bank using various tools with OMOs being a primary instrument deployed.

The CNX Nifty ended at 10822.15, down by 100.60 points or 0.92% after trading in a range of 10811.95 and 10944.80. There were 17 stocks advancing against 32 stocks declining on the index.(Provisional)

The top gainers on Nifty were Sun Pharma up by 2.73%, Yes Bank up by 2.47%, Zee Entertainment up by 1.66%, Wipro up by 1.44% and Tata Steel up by 1.41%. (Provisional)

On the flip side, ITC down by 4.69%, Grasim Industries down by 2.69%, Indiabulls Housing Finance down by 2.40%, Mahindra & Mahindra down by 2.03% and Titan Co down by 1.90% were the top losers.(Provisional)

European markets were trading mostly in red; UK’s FTSE 100 decreased 26.24 points or 0.38% to 6,875.15 and Germany’s DAX fell 6.65 points or 0.06% to 11,083.46, while France’s CAC was up by 5.61 points or 0.12% to 4,853.14.

Asian markets ended mostly in red on Wednesday as worries about global economic growth and the uncertainty over US-China trade talks kept investors on the sidelines. Underlying sentiment remained cautious after the reports suggested that the United States has rejected Beijing's offer to hold a preparatory meeting in Washington ahead of next week's high-level trade talks. However, White House adviser Lawrence Kudlow stressed that the two sides were on track to have ‘very, very important’ high-level talks at the end of the month that will be ‘determinative’. Chinese shares ended marginally higher on hopes that increased Chinese spending would stem an economic slowdown. Further, Japanese shares closed tad lower as export data fell short of expectations and the Bank of Japan kept monetary policy steady, as widely expected, and cut its price projections. The Bank of Japan kept its monetary policy unchanged today but downgraded the inflation forecast for this year primarily driven by a sharp fall in oil prices.