Post Session: Quick Review

Indian equity benchmarks ended the volatile day of trade with minor losses on penultimate day of December month F&O expiry. It turned out to be a choppy day of trade for domestic bourses with Sensex and Nifty lingering between green and red in very tight range as traders remained concerned as India reported 6,358 new coronavirus cases on Tuesday, according to the health ministry. The active caseload of the country now stands at 75,456. Omicron cases have risen to 653. Market participants traded with caution throughout the day as some anxiety persist after the government’s total liabilities rose to Rs 125.71 lakh crore in the September quarter from Rs 120.91 lakh crore in the three months ended June, according to the latest public debt management report. The increase reflects a quarter-on-quarter increase of 3.97 per cent in the July-September period of 2021-22.

However, losses remained capped as some relief came as ICRA said the Indian economy is likely to maintain a real GDP growth of 9 percent each in FY2022 and FY2023 amid uncertainty triggered by the Omicron variant of corona virus. The Indian economy grew at 8.4 per cent in the second quarter of the current fiscal, as against a growth of 20.1 per cent in the April-June quarter. Traders also took note of report that Finance Minister Nirmala Sitharaman will hold a meeting with finance ministers of states on Thursday as part of customary pre-Budget consultations with various stakeholders. Meanwhile, the Central Board of Direct Taxes (CBDT) has constituted a task force to restructure the Income Tax (I-T) Department. Besides, Markets regulator Sebi has decided to put a cap on IPO proceeds earmarked for making future acquisition of unspecified targets and will bring under monitoring the funds reserved for general corporate purposes.

On the global front, European markets were trading mostly in green led by banks and retail shares, although rising coronavirus cases fuelled concerns about the economic outlook for next year. Asian markets ended mixed as the region's investors positioned their portfolios for the New Year and continued to grapple with increasing global numbers of Omicron coronavirus cases.

Back home, banking stocks remained in limelight with the RBI report stating that the Indian financial system’s asset quality improved despite the pandemic, but it could be due to special dispensations by the regulator, and banks would likely see increased stress on their books once the schemes expire. Textile stocks remained in focus as the Centre released the operational guidelines for the production-linked incentive (PLI) scheme for textiles. Under this, companies can begin the registration process from January 1-31, 2022, on the government’s online portal. NBFCs stocks too remained on buyers’ radar with report that the asset quality of non-banking financial companies (NBFCs) deteriorated in April-September 2021 (H1FY22) owing to the second wave of the pandemic. Their gross non-performing assets (NPAs) rose to 6.8 per cent in September 2021 from 6 per cent in March 2021.

The BSE Sensex ended at 57,806.49, down by 90.99 points or 0.16% after trading in a range of 57684.58 and 58097.07. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.02%, while Small cap index was up by 0.43%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 1.60%, Auto up by 0.34%, Capital Goods up by 0.07%, Consumer Discretionary Goods & Services up by 0.06% and Telecom up by 0.05%, while Metal down by 1.07%, PSU down by 0.90%, Bankex down by 0.84%, Power down by 0.68% and Utilities down by 0.66% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Sun Pharma up by 2.33%, Dr. Reddy's Lab up by 1.83%, Indusind Bank up by 1.82%, Maruti Suzuki up by 0.68% and Titan Company up by 0.66%. On the flip side, SBI down by 1.84%, ITC down by 1.52%, NTPC down by 1.33%, Tech Mahindra down by 1.15% and Axis Bank down by 1.14% were the top losers. (Provisional)

Meanwhile, amid concerns over the Omicron variant of COVID-19, rating agency ICRA in its latest report has said that India’s real gross domestic product (GDP) is likely to maintain a 9% growth rate in fiscal 2022 and 2023. The Indian economy grew at 8.4% in the second quarter of the current fiscal, as against a growth of 20.1% in the April-June quarter.

The rating agency said ‘the available data for Q3 FY2022 does not offer convincing evidence that the Monetary Policy Committee's (MPC's) criteria of a durable and sustainable growth recovery has been met, to confirm a change in the Monetary Policy stance to neutral in February 2022’. It believes that rising consumption will push capacity utilisation above the crucial threshold of 75 per cent by the end of 2022, which should then trigger a broad-based pick-up in private sector investment activity in 2023. The agency also expects the visibility of tax revenue growth to spur faster government spending in 2022.

Icra Chief Economist Aditi Nayar said in the report ‘we are maintaining our forecast of a 9% GDP expansion in FY2022, with a clear K-shaped divergence amongst the formal and informal parts of the economy, and the large gaining at the cost of the small.’ He added ‘looking ahead, we expect the economy to maintain a similar 9 per cent growth in FY2023’. She expects the percentage of double-vaccinated adults to rise to 85-90 per cent by March 2022. She also said while the announcement of booster doses and vaccines for the 15-18 age group is welcome, it remains to be seen whether all the existing vaccines would offer adequate protection against the new Omicron variant to avert a third wave in India.

The CNX Nifty ended at 17,213.60, down by 19.65 points or 0.11% after trading in a range of 17176.65 and 17285.95. There were 20 stocks advancing against 30 stocks declining on the index. (Provisional)

The top gainers on Nifty were Eicher Motors up by 3.41%, Bajaj Auto up by 2.93%, Sun Pharma up by 2.38%, Divi's Lab up by 2.05% and Indusind Bank up by 1.71%. On the flip side, SBI down by 1.73%, ITC down by 1.52%, Coal India down by 1.51%, NTPC down by 1.37% and Grasim Industries down by 1.11% were the top losers. (Provisional)

European markets were trading mostly in green, UK’s FTSE 100 increased 78.40 points or 1.06% to 7,450.50 and France’s CAC was up by 6.45 points or 0.09% to 7,187.56. On the flip side, Germany’s DAX was down by 29.70 points or 0.19% to 15,934.00.

Asian markets ended mixed on Wednesday amid profit taking following weakness in Wall Street overnight, while investors are hopeful for the global economic recovery despite risks from the Omicron variant of the coronavirus and tightening monetary policy. Chinese shares dropped in cautious trade as Chinese city of Xian entered its seventh day of lockdown with tighter restrictions after 151 cases reported for Tuesday. Japanese stocks closed lower in thin year-end trade. Fall in US futures shares also pushed down the Japanese market.