Post Session: Quick Review

Indian equity benchmarks ended with sharp losses on Thursday. After a negative start, indices remained in red terrain during the whole day, as India’s tally of coronavirus cases has risen to 11,156,748, with a daily increase of 15,000 in total cases. Death toll has reached 157,471, with 110 fatalities in a day. India's count of active cases has jumped to 175,044. The country continues to be second-most-affected globally, and ranks 13th among worst-hit nations by active cases. The five most affected states by total cases are Maharashtra (2,169,330), Kerala (1,064,279), Karnataka (952,037), Andhra Pradesh (890,080), and Tamil Nadu (852,478). Maharashtra is now contributing more than half of fresh coronavirus infections in India, fanning fears of a second wave in the state.

In afternoon deals, markets cut some of their losses, as traders got some relief, after the income tax department said it has issued over Rs 1.98 lakh crore worth refunds to over 1.95 crore taxpayers so far this fiscal. Of this, personal income tax refunds of Rs 70,572 crore have been issued to over 1.92 crore taxpayers, and corporate tax refunds of Rs 1.27 lakh crore have been issued in 2.19 lakh cases. Besides, Securities and Exchange Board of India (SEBI) has asked stock exchanges, clearing corporations and depositories to put in place code of conduct and institutional mechanism to prevent fraud or market abuse by them and their designated persons.

However, in the last hour of the trading session, key indices again added losses to end the day on a lower note. Market participants took a note of Commerce and Industry Minister Piyush Goyal’s statement that the need of the hour is to reduce logistics cost in the country as India cannot be competitive if this cost remains high. He said the investments in the Sagarmala project will boost the country's maritime infrastructure, expand freight corridors, make freight more cost-effective and bring down the current logistics cost, which is estimated to be about 13-14 percent.

On the global front, European markets were trading lower, as the EU vowed legal response after the British government unilaterally extended a grace period for checks on food imports to Northern Ireland. Asian markets ended mostly lower on Thursday, even after South Korea's gross domestic product expanded a seasonally adjusted 1.2 percent on quarter in the fourth quarter of 2020. That beat forecasts for an increase of 1.1 percent following the 2.1 percent gain in the previous three months. On a yearly basis, GDP was down 1.2 percent - again exceeding expectations for a decline of 1.4 percent following the 1.1 percent drop in the three months prior.

The BSE Sensex ended at 50846.08, down by 598.57 points or 1.16% after trading in a range of 50539.92 and 51256.55. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.48%, while Small cap index was up by 0.80%. (Provisional)

The top gaining sectoral indices on the BSE were Power up by 0.63%, Utilities up by 0.46%, Consumer Disc up by 0.32%, Consumer Durables up by 0.28% and Basic Materials up by 0.27%, while Metal down by 2.31%, Bankex down by 1.45%, Energy down by 1.01%, Telecom down by 0.92% and PSU down by 0.85% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Ultratech Cement up by 4.07%, Dr. Reddy’s Lab up by 1.63%, Asian Paints up by 0.65%, Maruti Suzuki up by 0.13% and Hindustan Unilever up by 0.12%. On the flip side, HDFC down by 2.62%, Bajaj Finserv down by 2.49%, Larsen & Toubro down by 2.31%, SBI down by 2.28% and Axis Bank down by 2.24% were the top losers. (Provisional)

Meanwhile, credit rating agency, India Ratings and Ratings (Ind-Ra) in its latest report has maintained a stable outlook on retail non-banking finance company (NBFC) and housing finance company sectors for FY22. The agency noted that the system liquidity has improved considerably, while majority of large non-banks have strengthened their capital buffers and the sector has started witnessing disbursement growth.

However, the agency continues to maintain a negative outlook on the wholesale NBFC sector for FY22, factoring in significant asset quality challenges and added regulatory restrictions on different products lines and increased competition from banks. As per the report, the wide differential among NBFCs’ funding costs is likely to push the sector to consolidate, especially in the sectors with a thin margin profile and limited product differentiation.

Ind-Ra also said that FY21 saw a strong regulatory support through the infusion of liquidity, which aided the liquidity risk converting into a solvency risk. However, NBFCs need to plan for managing liquidity as and when these measures are rolled back. Ind-Ra believes that securitisation and co-lending model would get further traction as the funding requirement of the sector overshoots the saving mobilisation rate.

The CNX Nifty ended at 15080.75, down by 164.85 points or 1.08% after trading in a range of 14980.20 and 15202.35. There were 12 stocks advancing against 38 stocks declining on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 4.23%, Shree Cement up by 3.54%, Adani Ports & SEZ up by 3.10%, Grasim Industries up by 2.45% and Dr. Reddy’s Lab up by 1.61%. On the flip side, JSW Steel down by 3.28%, Hindalco down by 2.75%, HDFC down by 2.71%, Tata Motors down by 2.67% and Bajaj Finserv down by 2.56% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 39.39 points or 0.59% to 6,636.08, France’s CAC decreased 7.55 points or 0.13% to 5,822.51 and Germany’s DAX was down 32.42 points or 0.23% to 14,047.61.

Asian markets ended mostly lower on Thursday following worries about rising yields on benchmark US Treasury bonds, while investors also awaited US Federal Reserve Chairman Jerome Powell's speech at a Wall Street Journal conference later today where he may address concerns about the risk of a rapid rise in long-term borrowing costs. Chinese shares declined after China’s banking regulator also voiced concerns over high valuations in foreign markets. Further, Japanese shares settled lower amid increased uncertainty across equities and bond markets.