Post Session: Quick Review

Local equities ended at record closing highs again following Asian peers that rebounded after China's decision to support property developers to boost demand. After making cautious start, domestic markets soon entered into positive territory, as traders took support after Reserve Bank of India (RBI) released quarterly statistics on deposits and credit highlighted that bank credit growth to 17.2 per cent on an annual basis in September from 14.2 per cent a quarter ago. Besides, senior officials of India and the European Union (EU) on November 28 commenced the third round of talks on a proposed free trade agreement, which aims at boosting trade and investments between the two regions. Mirroring strong global cues, markets enlarged their gains, as China reported a slight decline in new Covid-19 infections. Meanwhile, rupee appreciated against dollar lent some support. 

Indices marched to newer high in afternoon session, as sentiments remained upbeat after data from National Securities Depository showed that foreign portfolio investors have infused funds worth Rs 32,344 crore in Indian stock markets so far in the month of November and became net buyers again. In September and October, they were net sellers amid the strong US dollar index, weak rupee, and tightening of monetary policy. Traders ignored that SBI Research in its latest report has expressed cautiousness over India’s economic situation and pencilled the country's GDP growth for the second quarter (Q2) at 5.8 per cent, down 30 basis points from average estimates citing a weak manufacturing sector coupled with the steep margin compression. Some optimism also came amid Reserve Bank of India (RBI) in its latest report ‘Data on ECB/FCCB’ has showed that Indian companies raised $1.43 billion ($1,42,99,20,622) through external commercial borrowings (ECBs) in for the month of October 2022. However, in late afternoon session, bourses came off from day’s highs amid profit taking.

On the global front, European markets were trading mostly in red as investors continued to monitor news from China over Covid restrictions. Asian markets ended mostly in green with mainland China and Hong Kong markets leading the surge, as China reported a slight dip in new COVID-19 infections and China reopening rumors swirled ahead of a press conference later in the day on COVID prevention and control measures. Back home, traders took note of report that British Prime Minister Rishi Sunak has reiterated the UK’s commitment to a free trade agreement (FTA) with India as part of the country’s wider focus on enhancing ties with the Indo-Pacific region and standing up to competitors with “robust pragmatism. 

The BSE Sensex ended at 62,681.84, up by 177.04 points or 0.28% after trading in a range of 62,362.08 and 62,887.40. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.39%, while Small cap index was down by 0.29%. (Provisional)

The top gaining sectoral indices on the BSE were FMCG up by 1.73%, Consumer Durables up by 0.58%, Metal up by 0.57%, Healthcare up by 0.54% and Utilities was up by 0.22%, while Telecom down by 0.96%, Capital Goods down by 0.74%, Industrials down by 0.65%, Realty down by 0.41% and Auto was down by 0.25% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 4.34%, Sun Pharma up by 1.46%, Nestle up by 1.32%, Dr. Reddy's Lab up by 1.16% and Tata Steel up by 1.14%. On the flip side, Indusind Bank down by 1.52%, Bajaj Finserv down by 1.22%, Maruti Suzuki down by 0.98%, Power Grid down by 0.97% and Bajaj Finance down by 0.73% were the top losers. (Provisional)

Meanwhile, ahead of the government’s official gross domestic product (GDP) number release on November 30, SBI Research in its latest report has expressed cautiousness over India’s economic situation and pencilled the country's GDP growth for the second quarter (Q2) at 5.8 per cent, down 30 basis points from average estimates citing a weak manufacturing sector coupled with the steep margin compression.

In a report, SBI Research headed by Soumya Kanti Ghosh said corporate results, operating profit of companies, excluding banking and financial sector, degrew by 14 per cent in Q2FY23 as against 35 per cent growth in Q2FY22, though the top line continued to grow at a healthier pace. Net sales grew by 28 per cent, while bottom line was down by around 23 per cent from the year ago period. Further, corporate margin seems to be under pressure, as reflected in results of around 3,000 listed entities, excluding banking and financial sector, due to higher input costs with declining operating margins, from 17.7 per cent in Q1FY22 to 10.9 per cent in Q2FY23.

Given this and the wide divergence in market consensus (6.1 per cent) regarding Q2 GDP numbers, SBI sees the economy printing in at 5.8 per cent, Ghosh said citing the lag of two months in the quarterly GDP data. It also pegs the full year growth at 6.8 per cent, 20 basis points lower than the RBI estimate. The SBI forecast, based on its composite leading index which is a basket of 41 leading indicators based on monthly data, shows declining economic activity between June and September but increased economic activity in October making Q3 growth more optimistic.

The CNX Nifty ended at 18,618.05, up by 55.30 points or 0.30% after trading in a range of 18,552.15 and 18,678.10. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindustan Unilever up by 4.32%, JSW Steel up by 2.36%, Cipla up by 1.76%, Britannia up by 1.72% and Hero MotoCorp up by 1.61%. On the flip side, Indusind Bank down by 1.44%, Bajaj Finserv down by 1.26%, Coal India down by 1.15%, Power Grid down by 0.88% and Maruti Suzuki down by 0.84% were the top losers. (Provisional)

European markets were trading mostly in red, France’s CAC decreased 1.08 points or 0.02% to 6,664.12 and Germany’s DAX was down by 10.03 points or 0.07% to 14,373.33. On the flip side, UK’s FTSE 100 was up by 49.76 points or 0.67% to 7,523.78.

Asian markets settled mostly higher on Tuesday, with Chinese and Hong Kong shares gaining after Beijing rolled out more stimulus measures targeting the real estate sector and speculation mounted that the Chinese government was considering the scaling back of its anti-covid policies. However, Japanese shares bucked the trend and fell, tracking a sharp decline in US stocks overnight and after data showed Japanese retail sales grew less than expected in October. Hawkish comments on US interest rates from a top Federal Reserve policymakers still makes investors cautious.