Post Session: Quick Review

Indian equity benchmarks witnessed bloodbath on Monday, with both Sensex and Nifty ending in deep red. After a negative start, markets remained lower during trading session, as continued selling by foreign institutional investors (FIIs) weighted on domestic markets. As per provisional data available on the NSE, FIIs net sold shares worth Rs 3,148.58 crore. Some cautiousness came in as former RBI Governor Raghuram Rajan said the Indian economy has some bright spots and a number of very dark stains and the government should target its spending carefully so that there are no huge deficits. Rajan also said the government needs to do more to prevent a K-shaped recovery of the economy hit by the coronavirus pandemic.

Markets added more losses in the second half of the trading session, as sentiments remained down-beat with the Ministry of Statistics and Programme Implementation in its latest report has said that as many as 445 infrastructure projects, each entailing investment of Rs 150 crore or more, have been hit by cost overruns totalling more than Rs 4.4 lakh crore. It said reasons for time overruns as reported by various project implementing agencies include delay in land acquisition, delay in obtaining forest and environment clearances, and lack of infrastructure support and linkages.

Traders were cautious during the trading session, as a survey done by a consultancy firm has revealed that India Inc is staring at an ''integrity crisis'' in the second year of the pandemic. Traders paid no heed toward RBI’s data showing that the country's foreign exchange reserves grew by $2.229 billion to $634.965 billion in the week ended January 14. During the reporting week ended January 14, the jump in the foreign exchange reserves was on account of a rise in the foreign currency assets (FCAs), a major component of the overall reserves, and the gold reserves.

On the global front, European markets were trading lower with technology stocks falling the most after worries about tighter monetary policies triggered a bruising sell-off in global equities last week. Asian markets ended mostly lower, even after the manufacturing sector in Japan continued to expand in January, and at a faster rate, the latest survey from Jibun Bank revealed on Monday with a manufacturing PMI score of 54.6. That's up from 54.3 in December, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

The BSE Sensex ended at 57491.51, down by 1545.67 points or 2.62% after trading in a range of 56984.01 and 59023.97. All 30 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 3.82%, while Small cap index down by 4.43%. (Provisional)

The top losing sectoral indices on the BSE were Realty down by 5.94%, Metal down by 5.03%, Basic Materials down by 4.47%, Consumer Durables down by 4.14% and Consumer Disc down by 3.99%, while there were no gaining sectoral indices on the BSE. (Provisional)

The top losers on the Sensex were Tata Steel down by 5.98%, Bajaj Finance down by 5.97%, Wipro down by 5.35%, Tech Mahindra down by 5.14% and Titan Co down by 4.97%, while there were no gainers on the BSE. (Provisional)

Meanwhile, calling upon the Indian Industry to inculcate a greater appetite for risk taking, Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, Piyush Goyal has said that the Government looks forward for investments from the private sector in labour oriented sectors to create jobs, maybe plastics, footwear, textiles, leather.

The minister further said “Industry associations, such as yours, can partner with all stakeholders including Central & State Governments, Missions, EPCs, and help attract businesses to India & strengthen domestic industry. Let us all come together with one resolve i.e. to make India a Global leader by taking up bigger & bolder challenges.”

Goyal also noted that with a Cost advantage as well as the Trust advantage that Indian Industry enjoys, this is the time for India to emerge out of the shadows and truly become a global nation. Besides, the minister Goyal said “the Indian Industry must clearly focus on the principles of Quality, Productivity & become global scale operators so that we can benefit from the economies of scale.”

The CNX Nifty ended at 17149.10, down by 468.05 points or 2.66% after trading in a range of 16997.85 and 17599.40. There were 2 stocks advancing against 48 stocks declining on the index. (Provisional)

The only gainers on Nifty were Cipla up by 2.84% and ONGC up by 1.25%. On the flip side, JSW Steel down by 6.67%, Tata Steel down by 6.03%, Bajaj Finance down by 5.99%, Grasim Industries down by 5.66% and Hindalco down by 5.59% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 28.48 points or 0.38% to 7,465.65, France’s CAC decreased 45.84 points or 0.65% to 7,022.75 and Germany’s DAX was down by 98.88 points or 0.63% to 15,505.00.

Asian markets ended mostly lower on Monday as investors remained cautious ahead of the US Federal Reserve's policy meeting this week. Chinese shares ended almost flat after a former member of the monetary policy committee of the People's Bank of China said a looser monetary policy won't be sufficient to stabilize the Chinese economy and more government spending is needed to drive economic recovery. However, Japanese shares gained marginally after a survey showed factory activity in Japan grew at the fastest pace in four years in January.