Markets trade under pressure in early deals

Indian equity benchmarks made cautious start on Monday amid mixed global cues. Markets are trading lower with around one third of a percent cut in early deals due to selling in TECK, IT and Capital Goods stocks. Traders were concerned as RBI data showed that the country’s foreign exchange reserves declined by $4.531 billion to stand at $629.755 billion in the week ended January 28. In the previous week ended January 21, the reserves had decreased by $678 million to $634.287 billion. It touched a lifetime high of $642.453 billion in the week ended September 3, 2021. Some cautiousness came in as with a private report that in view of inflationary concerns, the Reserve Bank is likely to maintain the status quo on key policy rates in its next bi-monthly economic policy, which will be the first after the presentation of the Union Budget for 2022-23. Meanwhile, Reserve Bank of India (RBI) announced rescheduling of rate-setting Monetary Policy Committee (MPC) meeting by a day in view of Maharashtra declaring public holiday on 7 February 2022 to mourn death of Bharat Ratna legendary singer Lata Mangeshkar. The meeting was scheduled for 7-9 February 2022. With the postponement, the meeting will now begin on February 8 and the outcome would be announced on February 10.

On the global front, Asian markets traded mixed  following the mixed cues from Wall Street on Friday, with continued spike in crude oil prices and as traders reacted to much better than expected U.S. employment data, which is good for economic recovery but spurred concerns for the outlook on interest rates. Meanwhile, worries about the fast spreading coronavirus Omicron variant's impact on global economic growth continues to impact market sentiment. Back home, hotel industry stocks were in focus as India Ratings and Research (Ind-Ra) said Covid-19's third wave is expected to have a benign impact on the hotel industry due to lesser restrictions along with the sector's pro-active preparation. In scrip specific development, SBI gained as it lined up six non-performing assets (NPAs) for sale to asset reconstruction companies (ARCs) to recover dues of nearly Rs 406 crore.

The BSE Sensex is currently trading at 58,487.38, down by 157.44 points or 0.27% after trading in a range of 58,707.76 and 58,317.87. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.64%, while Small cap index was down by 0.32%.

The top gaining sectoral indices on the BSE were Realty up by 1.11%, Oil & Gas up by 0.91%, Healthcare up by 0.60%, Utilities up by 0.50%, Energy up by 0.44%, while TECK down by 0.40%, IT down by 0.39%, Capital Goods down by 0.19%, Finance down by 0.18% and Bankex down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 5.74%, Mahindra & Mahindra up by 0.78%, Titan up by 0.74%, SBI up by 0.72% and Nestle up by 0.65%. On the flip side, Infosys down by 0.92%, Kotak Mahindra Bank down by 0.75%, HDFC Bank down by 0.67%, Indusind Bank down by 0.61% and Tata Steel down by 0.55% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has exhorted India Inc to take advantage of announcements made in Budget and ‘quickly’ step up capex so that the virtuous cycle of investment gathers momentum. She said increase in capex in the Budget was done with twin objectives of supporting sustained growth and crowd in private investment. She asserted that this is the right time for investment and industry should not lose this opportunity. She said ‘Post the pandemic with all the reshuffling happening, reset happening in the ways in which you do your business and also with that step of October 2019 in which that one condition was please start reducing by March 2023 is also now extended by one more year’.

Stressing that many sectors have been opened up, she said there are immense opportunities in the sunrise sectors and New Age sectors like bulk drugs vaccines, and genome. Do sit back and calmly take a call. India needs all the expansion in capacity and it is that which is going to kick off the virtuous cycle. She said ‘I would just want to green flag those areas before you and call upon the industry to quickly join and help the virtuous cycle to gain traction. The government has not given up its investment in infrastructure and that's going to have a bearing on the core industries directly and soon’. The government has hiked public investment by as much as 35.4% to Rs 7.5 lakh crore or 2.9 per cent of the GDP in the Budget 2023-24.

She urged industry not to lose this opportunity for India to reach a higher level of industrialization and manufacturing in India. She added ‘India fits into that very well and industry should take advantage of this global shift’. On the issue of rural distress, she said that the same was being addressed in multiple ways. The budget has enabled access to tractors and other farm equipment through rentals as well as making credit available. On the privatisation of the two public sector banks and one general insurance company, as suggested in last year's Budget, she said the government is committed to taking forward the announced privatisations.

The CNX Nifty is currently trading at 17459.00, down by 57.30 points or 0.33% after trading in a range of 17417.95 and 17536.75. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were SBI up by 2.53%, Power Grid up by 1.53%, Tata Steel up by 1.39%, NTPC up by 1.30% and Reliance Industries up by 1.01%. On the flip side, Hero MotoCorp down by 2.20%, Bajaj Auto down by 2.11%, Divi's Lab down by 1.87%, Tata Consumer Products down by 1.71% and Cipla down by 1.47% were the top losers.

Asian markets are trading mixed; Straits Times added 9.48 points or 0.28% to 3,340.89, Taiwan Weighted jumped 126.24 points or 0.71% to 17,800.64, Jakarta Composite rose 51.37 points or 0.76% to 6,782.76 and Shanghai Composite was up by 64.08 points or 1.91% to 3,425.52. On the other hand, Nikkei 225 slipped 230.73 points or 0.84% to 27,209.26, Hang Seng declined 57.36 points or 0.23% to 24,515.93 and KOSPI lost 12.40 points or 0.45% to 2,737.86.