Post Session: Quick Review

Local equity markets witnessed volatile day on Thursday and ended with losses amid weekly F&O expiry. Key gauges made negative start, as traders were cautious after provisional data available on the NSE showed foreign institutional investors have net sold shares worth Rs 386.06 crore on November 16, 2022. Besides, rising geopolitical tensions dampened sentiments. Markets continued to trade in negative territory, as traders failed to get any sense of relief with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that despite challenges, the Indian banking sector has been resilient and improved in various performance parameters. At the same time though, he asked public as well as private sector banks to remain watchful of the evolving macroeconomic situation and take necessary mitigating measures to minimise their impact on balance sheets and contain financial stability risks.

In afternoon session, indices added more losses, as sentiments continued to hit after credit rating agency Crisil in its latest report has said that as much as 43% of India’s micro, small and medium enterprises (MSME) universe by value is expected to remain below the pre-pandemic (fiscal 2020) level in terms of earnings before interest, tax, depreciation and amortisation (EBITDA) margin this fiscal (FY23) because of inability to completely pass on the high prices in some commodities as well as an unfavourable exchange rate. But, in late afternoon session, markets pared most of their losses to trade with minor losses as some support came after India and the Gulf Cooperation Council (GCC) are expected to launch negotiations for a free trade agreement on November 24 with an aim to boost economic ties between the two regions. GCC is a union of six countries in the Gulf region -- Saudi Arabia, UAE, Qatar, Kuwait, Oman and Bahrain. However, indices failed to erase losses and witnessed sharp selling in last leg of trade amid profit booking. 

On the global front, European markets were trading mostly in red as investors focused on geopolitics and a big budget announcement due in the U.K. Asian markets ended mostly in red following similar declines in their U.S. peers, while concerns over more hawkish moves by the Federal Reserve and rising COVID-19 cases in China also weighed. Back home, sector wise, banking stocks remained in watch, as global rating agency Standard and Poor’s said polarisation in the performance of Indian banks may persist in FY23 as many large public-sector banks are still saddled with weak assets, high credit costs, and poor earnings. In scrip specific development, One97 Communications ended with losses after SoftBank Group Corp on sold a 4.5% stake through block deals for $200 million.

The BSE Sensex ended at 61,750.60, down by 230.12 points or 0.37% after trading in a range of 61,643.27 and 62,050.80. There were 8 stocks advancing against 22 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.33%, while Small cap index was down by 0.27%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 1.00%, Telecom up by 0.54%, Industrials up by 0.46% and PSU was up by 0.01%, while Consumer Durables down by 1.65%, Utilities down by 1.50%, Auto down by 1.35%, Power down by 1.34% and IT was down by 0.79% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Larsen & Toubro up by 1.28%, Power Grid up by 0.81%, ICICI Bank up by 0.63%, Bharti Airtel up by 0.59% and Axis Bank up by 0.39%. On the flip side, Titan Company down by 2.21%, Mahindra & Mahindra down by 2.15%, Maruti Suzuki down by 1.65%, HDFC down by 1.35% and Bajaj Finserv down by 1.33% were the top losers. (Provisional)

Meanwhile, credit rating agency, S&P Global Ratings in its latest report ‘Global Bank Country-By-Country Outlook 2023: Greater Divergence Ahead’ has showed that polarization in the performance of Indian banks may persist in 2023 as many large public-sector banks are still saddled with weak assets, high credit costs, and poor earnings. Similarly, the agency expects a mixed-bag performance for finance companies (fincos). It said the asset quality of these fincos is often weaker than that of major private-sector banks.

The report further noted that real Gross domestic product (GDP) growth is likely to moderate as monetary conditions tighten and consumers grapple with higher inflation. However, India's economic growth prospects are likely to remain strong over the medium term, with GDP expanding 6.5%-7% annually in fiscal years 2024-2026.

As per S&P Global Ratings, global uncertainties to have lower impact on the economy. Slower global growth and external demand will weigh on economic activity and could fuel further inflation. However, given that India is domestically oriented, the agency expects the economic growth to be less affected. Moreover, it assumes the impact on the banking sector will also be modest.

The CNX Nifty ended at 18,343.90, down by 65.75 points or 0.36% after trading in a range of 18,312.95 and 18,417.60. There were 16 stocks advancing against 33 stocks declining on the index, while 1 stock remained unchanged.  (Provisional)

The top gainers on Nifty were Tata Consumer up by 2.14%, Adani Enterprises up by 1.56%, Larsen & Toubro up by 1.30%, ICICI Bank up by 0.68% and HDFC Life Insurance up by 0.59%. On the flip side, Titan Company down by 2.36%, Mahindra & Mahindra down by 2.13%, Tata Motors down by 1.95%, Apollo Hospital down by 1.76% and Eicher Motors down by 1.75% were the top losers. (Provisional)

European markets were trading mostly in red, UK’s FTSE 100 decreased 32.06 points or 0.44% to 7,319.13 and France’s CAC was 15.14 points or 0.23% to 6,592.08. On the flip side, Germany’s DAX was up by 54.53 points or 0.38% to 14,288.56.

Asian markets settled mostly down on Thursday after daily covid cases surged again in China, while strong US retail sales data released overnight dented hopes of a smaller rate hike. Market sentiments weakened further by tracking Wall Street’s weak close overnight amid hawkish comments from a slew of Federal Reserve officials. Chinese shares slipped due to worries about ongoing covid curbs in the Country. Hong Kong shares declined after a Chinese multinational technology company Tencent announced to slash its over $20 billion-stake in a Chinese shopping platform Meituan. Moreover, Japanese shares ended marginally lower after data showed the country' trade deficit widened more than expected in October.