Post Session: Quick Review

Indian equity benchmarks ended in deep red on Monday’s trading session. The start of the day was on a positive note, taking support with former deputy chairman of Planning Commission Montek Singh Ahluwalia’s statement that the country’s economy, which contracted in the first two quarters of the current fiscal, has started recovering at a gradual pace. Besides, in order to meet the GST compensation shortfall, the Ministry of Finance, Department of Expenditure has released the 13th weekly instalment of Rs 6,000 crore to the states.

However, key indices soon turned volatile, as the RBI data showed that the country's foreign exchange reserves declined by $1.839 billion to $584.242 billion in the week ended January 15. Downside remained capped during first half of the session, after the UN has said that foreign Direct Investment into India rose by 13 per cent in 2020, boosted by interest in the digital sector, and while fund flows '’declined most strongly'’ in major economies such as the UK, the US and Russia due to the COVID-19 pandemic, India and China ‘bucked the trend’.

In the second half of the session, markets added more losses to end near their intraday low points, on the back of negative cues from European markets. Traders remained on sidelines on report that Indian and Chinese troops came face-to-face at Naku La in North Sikkim last week amid the tense border standoff between the two sides in eastern Ladakh. They said the Chinese troops attempted to transgress into the Indian side of the Line of Actual Control (LAC) but were stopped by the Indian military personnel. It is learnt that a brawl broke out when the Indian troops stopped the Chinese soldiers.

On the global front, European markets were trading mostly in red amid chatter that there could be tighter border restrictions and extended lockdowns to keep the new COVID-19 variant at bay. Asian markets ended mixed, after the share of Hong Kong businesses expecting their business situation to be worse in the first quarter of the year compared to the final three months of last year was higher than that expecting it to be better. The survey data from the Census and Statistics Department showed that the net balance of business expectations weakened to -17 from -8 in the fourth quarter.

The BSE Sensex ended at 48347.59, down by 530.95 points or 1.09% after trading in a range of 48274.92 and 49263.15. There were 9 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.14%, while Small cap index was down by 1.15%. (Provisional)

The only gaining sectoral indices on the BSE were Healthcare up by 0.93%, Metal up by 0.19% and Basic Materials up by 0.04%, while Energy down by 4.44%, Oil & Gas down by 2.16%, Power down by 1.41%, PSU down by 1.33% and Industrials down by 1.32% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 2.19%, Sun Pharma up by 2.00%, Bajaj Auto up by 1.76%, Bajaj Finserv up by 1.47% and HDFC Bank up by 1.30%. On the flip side, Reliance Industries down by 5.36%, Indusind Bank down by 4.72%, HCL Tech. down by 3.80%, Asian Paints down by 3.17% and Ultratech Cement down by 3.04% were the top losers. (Provisional)

Meanwhile, in order to meet the GST compensation shortfall, the Ministry of Finance, Department of Expenditure has released the 13th weekly instalment of Rs 6,000 crore to the states. Out of this, an amount of Rs 5,516.60 crore has been released to 23 states and an amount of Rs 483.40 crore has been released to the 3 Union Territories (UT) with Legislative Assembly (Delhi, Jammu & Kashmir & Puducherry) who are members of the GST Council. The remaining 5 States, Arunachal Pradesh, Manipur, Mizoram, Nagaland and Sikkim do not have a gap in revenue on account of GST implementation.

The amount released this week was the 13th instalment of such funds provided to the states. The amount has been borrowed this week at an interest rate of 5.3083%. So far, an amount of Rs. 78,000 crore has been borrowed by the Central Government through the special borrowing window at an average interest rate of 4.7491%.

In addition to providing funds through the special borrowing window to meet the shortfall in revenue on account of GST implementation, the Government of India has also granted additional borrowing permission equivalent to 0.50 % of Gross States Domestic Product (GSDP) to the states choosing Option-I to meet GST compensation shortfall to help them in mobilising additional financial resources.

The CNX Nifty ended at 14238.90, down by 133.00 points or 0.93% after trading in a range of 14218.60 and 14491.10. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were Grasim Industries up by 6.55%, UPL up by 3.74%, Cipla up by 3.53%, Hero MotoCorp up by 2.96% and Axis Bank up by 2.16%. On the flip side, Reliance Industries down by 5.30%, Indusind Bank down by 4.94%, HCL Tech. down by 3.89%, Tata Motors down by 3.53% and Eicher Motors down by 3.47% were the top losers. (Provisional)

European markets were trading mostly in red, UK’s FTSE 100 decreased 2.81 points or 0.04% to 6,692.26 and France’s CAC was down by 3.85 points or 0.07% to 5,555.72. On the flip side, Germany’s DAX was up by 20.18 points or 0.15% to 13,894.15.

Asian markets ended mixed on Monday, as the covid pandemics remaining untamed despite vaccine rollout raised concerns over global economy and weighed down the market sentiments. Investors also side-lined as Federal Reserve's Policy meet is due this week, which is widely expected to alter bond buying program until 2022. However, optimism over better quarterly results amid prospects over larger US stimulus measures buoyed some of the Asian Stock exchanges in today's session. Chinese shares rose ahead to President Xi Jinping's keynote address at World Economic Forum's first global virtual meeting, and on increased FDIs in the country. While Japanese shares settled near 30 year high level amid investor eyeing over corporate earnings results and on news that covid cases in the country is dropping .