Markets trim most of losses in late afternoon session

Indian equity markets trimmed most of their losses in late afternoon session, but continued to trade in red, a day of the monthly expiry of January month derivatives contract. Titan Company, Dr Reddy’s Laboratories, HCL Tech, Tech Mahindra and Wipro were among top index losers. Nifty IT and Nifty Pharma were trading in the deep sea of red. India VIX was down by 3.31%. Traders failed to get any relief  on report that Central Board of Direct Taxes (CBDT) has issued Rs 1.62 lakh crore income tax refunds to over 1.79 crore taxpayers till January 24, 2022 of the current financial year. Besides, Vedanta Chairman Anil Agarwal said that India is on the growth path with innovation and digitalisation and stressed that government policies have created tremendous resources available for deployment in the country. On the global front, Asian markets were trading mostly in red and European markets were trading lower as January’s market turbulence continued after the Federal Reserve's hawkish comments regarding interest rate rises.

The BSE Sensex is currently trading at 57139.42, down by 718.73 points or 1.24% after trading in a range of 56439.36 and 57317.38. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 1.56%, while Small cap index was down by 0.90%.

The only gaining sectoral indices on the BSE were PSU up by 0.88% and Bankex was up by 0.40%, while Consumer Durables down by 2.88%, IT down by 2.88%, TECK down by 2.52%, Realty down by 2.03% and Healthcare was down by 1.98% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.74%, Axis Bank up by 2.19%, Kotak Mahindra Bank up by 0.92%, Sun Pharma up by 0.59% and Maruti Suzuki up by 0.31%. On the flip side, HCL Tech down by 3.80%, Tech Mahindra down by 3.60%, Wipro down by 3.54%, Dr. Reddy's Lab down by 3.53% and Titan Company down by 3.39% were the top losers.

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has showed the 3% sequential decrease in the domestic auto sales volumes (excluding CVs) in December 2021 was due to a continued poor demand for entry-level 2Ws, deferral in re-opening of colleges & offices, increased cost of ownership and production constraints in the premium segment 2W (>150cc) and PVs amid the semi-conductor shortage. On a yoy basis, the overall production and domestic sales volumes fell 14% and 11% respectively, while exports remained stable in December 2021.

According to the report, while there was a sequential recovery at 2% mom in domestic PV sales, they fell 13% yoy in December 2021. The sequential growth was supported by a 12% mom increase in passenger car sales, owing to a high consumer demand, but was offset by a 8% mom decrease in utility vehicles (UVs) sales.

The sales growth in PVs remains constrained by lower production owing to the chip shortages, even as demand remains robust as evident in the lower dealership inventory. On a yoy basis, domestic PV demand continued its shift towards UVs, as the segment’s sales grew by 3% yoy as against a 13% yoy decrease in the overall domestic PV segment sales.

The report further said that 2Ws sales fell 11% yoy and 4% mom in December 2021. The sequential drop was owing to a 20% and 22% mom decrease in scooter and moped sales, respectively, while supported by a 4% mom increase in motorcycle sales. The recovery in 2Ws continued to be affected by the muted demand for entry-level 2Ws, especially due to a slow recovery of the rural market after COVID-19, the deferral in opening of colleges/offices and increased cost of ownership.

The CNX Nifty is currently trading at 17060.15, down by 217.80 points or 1.26% after trading in a range of 16866.75 and 17091.05. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were SBI up by 2.56%, Axis Bank up by 2.02%, Cipla up by 1.76%, Indian Oil up by 1.44% and Tata Motors up by 0.80%. On the flip side, HCL Tech down by 3.76%, Dr. Reddy's Lab down by 3.72%, Tech Mahindra down by 3.64%, Wipro down by 3.63% and Eicher Motors down by 3.53% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 slipped 841.03 points or 3.11% to 26,170.30, Hang Seng decreased 482.90 points or 1.99% to 23,807.00, KOSPI fell 94.75 points or 3.5% to 2,614.49, Shanghai Composite declined 61.42 points or 1.78% to 3,394.25, Taiwan Weighted dropped 26.72 points or 0.15% to 17,674.40 and Straits Times was down by 15.64 points or 0.48% to 3,255.93. On the flip side, Jakarta Composite was up by 10.34 points or 0.16% to 6,611.16.

European markets were trading lower, UK’s FTSE 100 decreased 21.26 points or 0.28% to 7,448.52, France’s CAC decreased 73.69 points or 1.06% to 6,908.27 and Germany’s DAX was down by 247.80 points or 1.6% to 15,211.59.