Post Session: Quick Review

Bears held a tight grip over the Dalal Street on Wednesday, with both Sensex and Nifty ending in deep red. After a negative start, markets remained lower during the trading session, amid a private report that the third wave of the COVID-19 pandemic is likely to peak in India on January 23 when the country will record nearly 7.2 lakh cases per day. Some cautiousness also came in as the SBI Business Activity Index declined to 101 as on January 17 from 109 in the week ended January 10. The latest reading, even as the country is in the midst of the third wave of the pandemic, is the lowest since November 15.

Traders remained worried, as a top WHO official said that it is not possible to end the COVID-19 virus as such viruses never go away and end up becoming part of the ecosystem, but asserted that it is possible to end this year the public health emergency caused by COVID-19 with a collaborative approach to fix inherent inequities in the system. Adding more concerns, Crisil Ratings said disruptions due to the third COVID wave could shave off as much as 200 basis points from the growth in assets under management of housing finance companies in the current and next financial years.

Key indices added more losses in the second half of the trading session to end the day on a lower note, as ratings agency ICRA in its latest report has said that States are shelling out more for debt funds, with the weighted average cost for their debt auctions hardening by 9 basis points (bps) to touch 7.24 per cent, the highest level so far this fiscal, during the auctions on January 18, 2022. Compared to the previous week, the cost has gone up by 9 bps. From the first auctions in January, the cut-offs have been trending over 7 per cent.

On the global front, European markets were trading mostly in red as U.S. Treasury yields hit new highs, while luxury stocks stood out on upbeat trading updates from Richemont and Burberry. Asian markets settled mostly lower on Wednesday, after Japan's industrial production rose less than initially estimated in November. The data from the Ministry of Economy, Trade and Industry said that industrial production rose a seasonally adjusted 7.0 percent monthly in November. In the initial estimate, output grew 7.2 percent. Shipments rose 7.4 percent monthly in November, as estimated.

The BSE Sensex ended at 60098.82, down by 656.04 points or 1.08% after trading in a range of 59949.22 and 60870.17. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.34%, while Small cap index up by 0.03%. (Provisional)

The top gaining sectoral indices on the BSE were PSU up by 1.22%, Utilities up by 1.01%, Power up by 0.99%, Metal up by 0.89% and Oil & Gas up by 0.71%, while IT down by 1.95%, TECK down by 1.79%, Telecom down by 0.97%, FMCG down by 0.89% and Bankex down by 0.52% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 1.83%, Tata Steel up by 1.19%, Maruti Suzuki up by 1.17%, Axis Bank up by 0.58% and Tech Mahindra up by 0.51%. On the flip side, Infosys down by 2.77%, Asian Paints down by 2.71%, Nestle down by 2.41%, Hindustan Unilever down by 2.41% and Bajaj Finance down by 2.28% were the top losers. (Provisional)

Meanwhile, expressing some concerns about the AUM growth of housing finance companies, credit rating agency, Crisil Ratings in its latest report has said that disruptions due to the third COVID wave could shave off as much as 200 basis points from the growth in assets under management (AUM) of housing finance companies in the current and next financial years.

According to the report, growth would still be higher compared with average of around two per cent over fiscals 2020 and 2021 though slower than the broad-based 24 per cent logged between fiscals 2011 and 2019. Of the total Housing Finance Companies' (HFCs) AUM of Rs 13.2 lakh crore as on March 31, 2021, home loans were the largest segment (71 per cent) followed by wholesale loans (18 per cent) and Loans Against Property (11 per cent).

The credit rating agency Crisil also noted that home loans will be the fastest-growing segment as lenders continue to be selective in the non-housing segment, comprising wholesale and LAP (Loan Against Property) loans.

The CNX Nifty ended at 17938.40, down by 174.65 points or 0.96% after trading in a range of 17884.90 and 18129.20. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were ONGC up by 3.91%, Tata Motors up by 1.97%, Coal India up by 1.93%, SBI up by 1.78% and Hindalco up by 1.77%. On the flip side, Infosys down by 2.80%, Asian Paints down by 2.77%, Shree Cement down by 2.77%, Hindustan Unilever down by 2.52% and Grasim Industries down by 2.47% were the top losers. (Provisional)

European markets were trading mostly in red, UK’s FTSE 100 decreased 4.76 points or 0.06% to 7,558.79 and Germany’s DAX was down by 45.85 points or 0.29% to 15,726.71. On the flip side, France’s CAC was up by 8.97 points or 0.13% to 7,142.80.

Asian markets settled mostly lower on Wednesday following Wall Street's overnight sell-off on concerns about surging inflation and higher interest rates by the US Federal Reserve. Traders are expecting the US Fed to deliver a half-point interest rate hike in March. Japanese shares hit a five-month low, pressured by rising US Treasury yields. Sony Group and Toyota Motors shares are, meanwhile, leading losses in Japan. Chinese shares ended lower, dragged down by profit booking in electric vehicle makers and healthcare firms.