Benchmarks settle flat on Monday

Indian equity benchmarks settled flat on Monday as traders remained on sidelines ahead of the country’s November retail inflation data, October’s industrial production (IIP) data to be released later in the day. Benchmarks made negative start amid a weak trend in global markets and continuous foreign fund outflows. Foreign Institutional Investors (FIIs) remained net sellers in the capital markets on Friday as they offloaded shares worth Rs 158.01 crore, according to exchange data. But, key indices quickly pared initial losses to trade flat with positive bias as traders took some support with the Reserve Bank of India's (RBI) statistical supplement showing that India's foreign exchange reserves rose for a fourth week to an over three-month high of $561.16 billion in the week through December 2. Traders also took a note of report that the government has asked trade bodies and banks to explore opportunities for trade in rupee with more countries after having facilitated rupee trade with Russia, Mauritius and Sri Lanka.

But, buying proved short-lived as markets once again slipped into red in late afternoon session amid a private report stating that foreign portfolio investors (FPIs) turned sellers in the last four trading sessions and pulled out Rs 3,300 crore as they are adopting a cautious stance ahead of the US Federal Reserve's decision on the interest rate. Some concern also came with the data provided by commerce and industry minister Piyush Goyal showing that the trade deficit, difference between import and exports, between India and China has touched $51.5 billion during April-October this fiscal. Though, markets managed to trim losses towards the end, taking support from the Finance Ministry’s statement that the net direct tax collection grew 24 per cent to Rs 8.77 lakh crore in the April-November of the current fiscal. This represents 61.79 per cent of the full-year Budget Estimates (BE) of direct tax collection for 2022-23 (April-March).

On the global front, European markets were trading lower even as official data revealed that the U.K. economy rebounded at a faster-than-expected pace in October with strong contribution from services activity. Monthly real gross domestic product expanded 0.5 percent in October, reversing a fall of 0.6 percent in September.  Asian markets settled mostly lower on Monday as data on U.S. producer prices sent mixed signals on inflation and China faced a surge in virus 19 cases after partially easing aspects of its so-called zero-COVID policy. Investors looked ahead to the release of U.S. consumer inflation report as well as a slew of central bank decisions this week for additional clues on the economic and rate outlook.

Back home, aviation industry stocks were in focus as IATA chief Willie Walsh said the Indian civil aviation market has exciting and significant opportunities but taxation has always been an issue which also makes the industry less competitive. Power stocks also were in watch as latest government data showed that power deficit, or the gap between electricity required and supplied, has fallen from 2 per cent in April this year to 0.2 per cent in November 2022.

Finally, the BSE Sensex fell 51.10 points or 0.08% to 62,130.57 and the CNX Nifty was up by 0.55 points to 18,497.15.

The BSE Sensex touched high and low of 62,239.42 and 61,676.15, respectively. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.30%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.31%, Energy up by 1.02%, Industrials up by 0.61%, PSU up by 0.57% and Realty up by 0.54%, while Consumer Durables down by 0.97%, TECK down by 0.66%, IT down by 0.57%, Telecom down by 0.32% and Auto down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.18%, Nestle up by 1.13%, Dr. Reddy's Lab up by 1.02%, Wipro up by 0.86% and Ultratech Cement up by 0.80%. On the flip side, Asian Paints down by 1.94%, Infosys down by 1.39%, Titan Company down by 1.24%, Kotak Mahindra Bank down by 1.05% and Bharti Airtel down by 0.86% were the top losers.

Meanwhile, the Finance Ministry has said that the direct tax collection net of refund stands at Rs 8.77 lakh crore in the April-November of the current fiscal (FY23), which is 24.26 per cent higher than the net collection for the corresponding period last year. This represents 61.79 per cent of the full-year Budget Estimates (BE) of direct tax collection for 2022-23 (April-March).

The Budget estimated direct tax collection at Rs 14.20 lakh crore this fiscal, higher than Rs 14.10 lakh crore collected last fiscal (2021-22). Tax on corporate and individual income makes up for direct taxes. Tax collection is an indicator of economic activity in any country.

The collection from the levy of tax on goods and services sold (GST) has flattened to around Rs 1.45-1.50 lakh crore per month. Refunds amounting to Rs 2.15 lakh crore were issued between April 1 and November 30, which is about 67 per cent higher than the last year. 

The CNX Nifty traded in a range of 18,521.55 and 18,345.70. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.13%, Divi's Lab up by 1.96%, Coal India up by 1.55%, UPL up by 1.41% and Nestle up by 1.37%. On the flip side, Asian Paints down by 1.86%, Infosys down by 1.54%, Kotak Mahindra Bank down by 1.22%, Titan Company down by 1.17% and Eicher Motors down by 1.14% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 10.20 points or 0.14% to 7,466.43, France’s CAC decreased 1.36 points or 0.02% to 6,676.28 and Germany’s DAX decreased 21.92 points or 0.15% to 14,348.80.

Asian markets settled mostly lower on Monday as investors were cautiously awaiting US consumer inflation report as well as a slew of central bank decisions this week for additional clues on the economic and interest rate outlook. Chinese and Hong Kong shares led regional losses with worries that rising Covid-19 cases in China might disrupt consumption and manufacturing. Meanwhile, one of China's top health experts has warned of a surge in Covid-19 cases in the wake of the government's decision to abandon its hard-line coronavirus strategy. Moreover, Seoul shares declined notably tracking weakness in Wall Street shares last Friday following deepening fears about US recession.