Post Session: Quick Review

It turned out to be a mood dampener day for Indian equity benchmarks, where Sensex and Nifty ending below their crucial 17,250 (Nifty) and 57,700 (Sensex) levels. After making a cautious start, markets lost momentum and never looked in recovery mode as traders continued to sell risky assets a regular intervals. Sentiments remain dampened since beginning for the day as rating agency Moody’s Investors Service said Indian economy’s fiscal strength is unlikely to improve in the medium term, thus remaining a key credit challenge compared with peers, even as the FY23 budget’s focus on capital expenditure will support near-term growth. Traders also remained cautious after 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.

Markets extended losses on 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. Sentiments also got hurt as foreign portfolio investors (FPIs) pulled out as much as Rs 6,834 crore from Indian markets in the first four trading sessions of February. As per depositories data, FPIs took out Rs 3,627 crore from equities, Rs 3,173 crore from the debt segment and Rs 34 crore from hybrid instruments. Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 2,267.86 crore on Friday.

Weakness in European markets too dampened sentiments as investors took stock of the outlook for monetary policy ahead of key inflation data later this week. Treasury yields and the dollar were stable. Asian markets ended mostly in green amid stunningly strong U.S. jobs data soothed concerns about the global economy but also added to the risk of an aggressive tightening by the Federal Reserve. Back home, 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. On the sectoral front, Oil & gas, and aviation industry remained in focus as Finance Minister Nirmala Sitharaman said the Centre will move the issue of bringing aviation turbine fuel (ATF) under the GST net for discussion in the next meeting of the GST Council, as rising global fuel prices are a concern.

The BSE Sensex ended at 57621.19, down by 1023.63 points or 1.75% after trading in a range of 57299.05 and 58707.76. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 1.25%, while Small cap index was down by 0.75%. (Provisional)

The few gaining sectoral indices on the BSE were Utilities up by 0.97%, Power up by 0.69%, PSU up by 0.37% and Metal up by 0.11%, while Capital Goods down by 2.13%, Bankex down by 1.87%, FMCG down by 1.70%, Telecom down by 1.69% and Healthcare down by 1.61% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Power Grid Corporation up by 1.91%, Tata Steel up by 0.75%, SBI up by 0.59%, NTPC up by 0.56% and Ultratech Cement up by 0.32%. On the flip side, Larsen & Toubro down by 3.57%, HDFC Bank down by 3.45%, Bajaj Finance down by 3.24%, HDFC down by 3.11% and Bajaj Finserv down by 2.94% were the top losers. (Provisional)

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 ended at 17213.60, down by 302.70 points or 1.73% after trading in a range of 17119.40 and 17536.75. There were 8 stocks advancing against 42 stocks declining on the index. (Provisional)

The top gainers on Nifty were Power Grid Corporation up by 1.88%, ONGC up by 1.47%, NTPC up by 0.71%, Tata Steel up by 0.57% and Shree Cement up by 0.57%. On the flip side, Tata Consumer Product down by 3.95%, HDFC Bank down by 3.66%, HDFC Life Insurance down by 3.38%, Larsen & Toubro down by 3.26% and Britannia down by 3.18% were the top losers. (Provisional)

European markets were trading mostly in red, France’s CAC lost 10.07 points or 0.14% to 6,941.31 and Germany’s DAX was down by 10.72 points or 0.07% to 15,088.84. On the flip side, UK’s FTSE 100 increased 9.44 points or 0.13% to 7,525.84.

Asian markets finished mostly in green on Monday, with the increased risk appetite in the global markets followed by robust corporate earnings and an upbeat jobs data of January. Technical buying after at prevailing levels also supported investments. However, the trade was volatile in the session as bets over Federal rate hikes firmed with the better than expected US Jobs data. Chinese stocks rallied as it reopened after a week long holiday for Lunar New Year. Meanwhile, PMI of China posted a decline to 51.4 from 53.1 in December. Japanese stocks settled lower in the session amid disappointing earnings results and surging restrictions associated with the rising covid cases.