Post Session: Quick Review

Indian equity benchmarks remained under a grip of bears on Thursday’s trading session, with both Sensex and Nifty ending in deep red. The start of the day was on a negative note, as rising coronavirus cases in the country dampened the sentiments in markets. The Centre said India is witnessing an exponential rise in the number of Covid-19 cases, which is believed to be driven by the Omicron variant. India has reported over 6.3 times rise in Covid-19 cases in the last eight days. The total number of COVID-19 cases rose by 58,097 in the last 24 hours, as per a government update on January 5.

Weak trade continued over the Dalal Street during the trading session, amid reports that the Centre’s capital expenditure (capex) declined for the second consecutive month in November, when it fell by more than half, year-on-year (YoY). It was down 24.11 per cent in October. This comes despite Finance Minister Nirmala Sitharaman nudging ministries and departments to spend more on this front. Adding more pessimism, ICRA Ratings warned that the third wave of the pandemic, which has seen a massive spike in infections after the more infectious Omicron variant of the coronavirus appeared, is likely to shave 40 bps of the fourth quarter GDP growth that may print in at 4.5-5 per cent.

In the last hours of trade, indices staged some recovery but ended in red, as some concerns came, after another private report stated that the cost of debt-funds for the states has touched the highest level so far this fiscal with the weighted average cut-off crossing the 7.16 percentage points at the latest auctions, up 11 bps over the past week, reflecting the hardening yields even for the government securities. Sectorally, Sugar industry’s stocks remained in focus as the Centre issued guidelines for restructuring of loans taken by mills from the Sugar Development Fund (SDF), providing a moratorium for two years and then repayment in five years to eligible defaulting factories.

On the global front, European markets were trading lower after the minutes from the Federal Reserve's most recent meeting suggested that most members of the committee were thinking interest rates would need to go higher, due to both inflation as well as a tight labor market which could be considered a sign of maximum employment.  Asian markets settled mostly lower on Thursday, even after China's services activity growth improved at the end of the year with firms posting faster increase in new work. The survey results from IHS Markit showed that the Caixin services Purchasing Managers' Index rose to 53.1 in December from 52.1 in November. A reading above 50.0 indicates expansion in the sector. Output increased in each of the past four months.

The BSE Sensex ended at 59601.84, down by 621.31 points or 1.03% after trading in a range of 59290.58 and 59781.86. There were 7 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.05%, while Small cap index up by 0.01%. (Provisional)

The top gaining sectoral indices on the BSE were Telecom up by 1.31%, Auto up by 0.62%, Consumer Durables up by 0.41%, Utilities up by 0.34% and Oil & Gas up by 0.34%, while Realty down by 1.48%, IT down by 1.39%, Energy down by 1.29%, TECK down by 1.08% and Basic Materials down by 0.71% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Indusind Bank up by 1.74%, Bharti Airtel up by 1.46%, Maruti Suzuki up by 1.36%, Titan Co up by 0.79% and Bajaj Finance up by 0.67%. On the flip side, Tech Mahindra down by 2.56%, Ultratech Cement down by 2.49%, Reliance Industries down by 2.01%, HCL Tech. down by 1.99% and HDFC down by 1.88% were the top losers. (Provisional)

Meanwhile, calling for transparency and the highest level of integrity in the stock markets, Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, Piyush Goyal has said that this will empower households to look at greater incomes through investment besides encourage foreign investors.

Goyal further said that India has earned respect globally, with its robust technical solutions for handling large trade volumes, adding that it is equally pertinent that all financial products pass through the prism of ‘Trust, Transparency & Accountability’ so that they can turn into a rainbow of colours for the investors.

Besides, the minister said that stock exchanges play a pivotal role in providing capital both to industry and service sector and channelize household savings & institutional flows for capital formation. Goyal also said that India is on the path of unprecedented economic growth. The rising economic indicators have showcased India and its true potential and capacity.

Underlining the benefits, Goyal said that capital markets can become a source of finance for productive purposes like Infrastructure & Agriculture, which can benefit a very large majority of the country’s population. He said that also, commodity derivative markets can be used to eliminate risks of farmers.

The CNX Nifty ended at 17745.90, down by 179.35 points or 1.00% after trading in a range of 17655.55 and 17797.95. There were 15 stocks advancing against 34 stocks declining, while 1 stock remained unchanged on the index. (Provisional)

The top gainers on Nifty were UPL up by 2.39%, Indusind Bank up by 1.96%, Bajaj Auto up by 1.78%, Bharti Airtel up by 1.49% and Eicher Motors up by 1.39%. On the flip side, JSW Steel down by 2.96%, Ultratech Cement down by 2.62%, Tech Mahindra down by 2.62%, Shree Cement down by 2.52% and Reliance Industries down by 2.15% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 71.72 points or 0.95% to 7,445.15, France’s CAC decreased 120.34 points or 1.63% to 7,256.03 and Germany’s DAX was down by 228.13 points or 1.4% to 16,043.62.

Asian markets settled mostly lower on Thursday tracking sell-off in Wall Street overnight after the minutes from the US Federal Reserve's recent meeting signalled a possibility of earlier and faster interest rate hikes to cool inflation. Strong US ADP private payroll report sent Treasury yields higher also boosted expectations of early interest rate hikes. Chinese shares ended lower due to surge in Covid-19 infections. Data showed activity in China's services sector expanded at a faster pace in December. The services sector in China continued to expand in December, and at a faster pace, the latest survey from Caixin revealed with a services PMI score of 53.1 in December up from 52.1 in November. Meanwhile, Japan's services sector activity expanded at a slower pace in December. The final au Jibun Bank Japan Services Purchasing Managers' Index (PMI) dropped to a seasonally adjusted 52.1 from the prior month's 53.0, which was the highest reading since August 2019.