Benchmarks end in negative territory on Tuesday

Indian benchmark indices ended in negative territory on Tuesday amid weak global market trends and rising crude prices. Key gauges made weak start and stayed in red during the whole session, as market participants turned cautious ahead of the outcome of Reserve Bank of India’s (RBI) monetary policy decision due on Wednesday. Some concern also came with exchange data showing that Foreign Institutional Investors (FIIs) offloaded shares worth Rs 1,139.07 crore on Monday. Traders failed to take any sense of relief with a private report stating that India’s central bank will probably start slowing the pace of interest-rate increases on Wednesday, signaling it’s near the end of its aggressive tightening cycle.

Sentiments remained down-beat in late afternoon deals, after World Bank's India Development Update said India is affected by spillovers from the US, Euro area and China. It however saw the government meeting the fiscal deficit target of 6.4 percent of the GDP in 2022-23. Besides, World Bank expects the inflation at 7.1 percent in current fiscal year. Moreover, World Bank revised upwards its GDP growth forecast for India to 6.9 per cent for 2022-23, saying the economy was showing higher resilience to global shocks. In October, it had cut India’s GDP growth forecast to 6.5 per cent from 7.5 per cent earlier. Now, it has upgraded the projection to 6.9 per cent for 2022-23 (April 2022 -March 2023). However, key gauges managed to trim some losses towards the end as traders got some relief with Union Minister of Agriculture and Farmers Welfare, Narendra Singh Tomar’s statement that the Government of India is continuously working efficiently under the leadership of Prime Minister, with an aim to solve challenges of the agriculture sector. Meanwhile, the GST Council in its next meeting is likely to discuss decriminalisation of offences under GST law, along with raising the threshold of launching prosecution to Rs 20 crore, from Rs 5 crore at present.

On the global front, European markets were trading in red, while Asian markets ended mostly lower on Tuesday as traders are concerned about more aggressive monetary policy moves by the US Fed after data showed an unexpected acceleration in U.S. services sector activity in the month of November. Back home, power stocks were in watch as aggregate technical and commercial (AT&C) losses of power distribution utilities declined to 17 per cent in 2021-22 from 22 per cent in the previous year. Power ministry said reduction in AT&C losses improves finances of utilities (discoms), enabling them to better maintain the system and buy power as per requirement and benefit the consumers. Sugar stocks were in focus with a private report that India's sugar output is likely to fall 7% this year as erratic weather conditions have cut cane yields, which could dampen exports from the world's biggest producer of the sweetener.

Finally, the BSE Sensex fell 208.24 points or 0.33% to 62,626.36 and the CNX Nifty was down by 58.30 points or 0.31% to 18,642.75.

The BSE Sensex touched high and low of 62,677.84 and 62,390.07, respectively. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.53%, while Small cap index was down by 0.32%.

The top gaining sectoral indices on the BSE were Utilities up by 0.95%, Power up by 0.93%, FMCG up by 0.33%, Energy up by 0.21% and Capital Goods up by 0.04%, while Metal down by 1.68%, TECK down by 1.37%, IT down by 1.36%, Telecom down by 1.07% and Realty down by 0.73% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.31%, Ultratech Cement up by 0.99%, Power Grid Corporation up by 0.81%, Nestle up by 0.75% and Axis Bank up by 0.59%. On the flip side, Tata Steel down by 2.50%, Dr. Reddy's Lab down by 2.35%, Infosys down by 1.69%, SBI down by 1.32% and Bharti Airtel down by 1.27% were the top losers.

Meanwhile, India has proposed dovetailing climate action with sustainable development at the first meeting of the G20 Sherpas, making a clear bid to bring issues facing the emerging economies and the global south in sharp focus on the world stage. The discussions focussed on technological transformation in the digital economy, health and education, green development and India's Lifestyle for Environment (LiFE) initiative.

India's G20 Sherpa Amitabh Kant made a strong pitch for working together through hope, harmony and healing to deal with the global challenges, with a focus on developing countries and the global south whose voice is often unheard. He flagged rising global debt, inflation and slowdown in growth, sharp differences over the Ukraine conflict as key challenges facing the world.

He said ‘we will be, but that is not feasible nor possible without all of you. Therefore, we would like the support, positive and forward-looking support from all of you to make the G20 a very vibrant, very dynamic and a very positive group to drive global growth and global sustainability and digital transformation’. He added that India's G20 Presidency will seek to advocate the priorities of the developing countries and the global south in addition to that of the partners of the grouping.

Highlighting India's initiatives on digital transformation, Kant said ‘In digital economy, we are focussing on digital public infrastructure, quite a bit on our experience of creating digital identities and bank accounts for everyone. This has enabled us to lift vast section of the population above the poverty line through direct benefit transfer and fast payments.’

The CNX Nifty traded in a range of 18,654.90 and 18,577.90. There were 19 stocks advancing against 30 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Adani Enterprises up by 2.43%, Hindustan Unilever up by 1.46%, Nestle up by 1.15%, Bajaj Auto up by 0.93% and Ultratech Cement up by 0.89%. On the flip side, BPCL down by 2.93%, Hindalco down by 2.61%, Tata Steel down by 2.50%, Dr. Reddy's Lab down by 2.32% and UPL down by 1.84% were the top losers.

European markets were trading in red; France’s CAC decreased 30.60 points or 0.46% to 6,666.36, Germany’s DAX was down by 64.96 points or 0.45% to 14,382.65 and UK’s FTSE 100 fell by 27.52 points or 0.36% to 7,540.02.

Asian markets ended mostly lower on Tuesday, tracking weakness in Wall Street overnight amidst anxiety and uncertainty over US Federal Reserve interest rate hikes. The Reserve Bank of Australia raised rates by 25 basis points also added more pressure on Asian equities. Although, hopes of relaxation in Covid curbs in China capped further fall in Asian equities.