Benchmarks manage to end higher on Wednesday

Indian equity benchmarks pared some initial gains but managed to end higher on Wednesday, led by gains in Metal and Realty stocks. Benchmarks made optimistic start and stayed in green for whole day as traders took some support with the government stating that an amount of Rs 60.46 crore has been received in tax from entities for transactions in virtual digital assets (VDAs), including cryptocurrencies, since the introduction of TDS provisions in July. Buying further crept in as industry body PHDCCI said India can scale up its merchandise exports to G20 nations to $500 billion by 2030 from the current $212 billion and significantly reduce trade deficit. Traders also took a note of report that India and the United Kingdom (UK) have decided to iron out the differences while keeping both nations’ sensitivities in mind, and agreed to conclude the negotiations towards a free trade agreement (FTA) at the earliest.

Key gauges extended gains in afternoon deals, as India’s inflation based on wholesale price index (WPI) eased further to 5.85% in the month of November 2022 as against 8.39% recorded in October 2022, primarily contributed by fall in prices of food articles, basic metals, textiles, chemicals & chemical products and paper & paper products as compared to the corresponding month of the previous year. The wholesale inflation was 10.70% in September 2022. Steady foreign flows aided the sentiments in the domestic markets. Foreign institutional investors (FIIs) net bought shares worth Rs 619.92 crore on December 13, according to the provisional data available on the NSE. However, indices pared some of the gains towards the end as traders got anxious with the Asian Development Bank’s report stating that developing Asia's economic expansion next year is expected to be slower than previously projected as a global slowdown and the prolonged war in Ukraine weigh on the region.

On the global front, European markets were trading lower ahead of the interest rate decisions due on Wednesday by the Fed and on Thursday by Bank of England and European Central Bank. Asian markets settled mostly higher on Wednesday following the broadly positive cues from global markets, as data showing a tamer-than-expected increase in U.S. consumer prices helped ease concerns about the outlook for interest rates ahead of the US Fed's rate decision later in the day.

Back home, banking stocks were in focus as finance minister Nirmala Sitharaman said banks have written off bad loans worth Rs 10,09,511 crore during the last five financial years. She said the non-performing assets (NPAs), including those in respect of which full provisioning has been made on completion of four years, are removed from the balance sheet of the bank concerned by way of write-off. Fertilizer industry stocks were in watch with report that urea production stood at 187.21 lakh tonnes during April-November period of this fiscal, while imports were at 46.14 lakh tonnes to meet domestic demand.

Finally, the BSE Sensex rose 144.61 points or 0.23% to 62,677.91 and the CNX Nifty was up by 52.30 points or 0.28% to 18,660.30.

The BSE Sensex touched high and low of 62,835.11 and 62,591.28, respectively. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.59%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Metal up by 1.55%, Realty up by 1.44%, PSU up by 1.02%, Capital Goods up by 0.92% and IT up by 0.89%, while FMCG down by 0.37% and Energy down by 0.03% were the only losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.84%, Tata Steel up by 1.66%, NTPC up by 1.63%, SBI up by 1.44% and Indusind Bank up by 1.44%. On the flip side, Nestle down by 1.82%, ICICI Bank down by 1.16%, Bharti Airtel down by 1.13%, Asian Paints down by 0.95% and Hindustan Unilever down by 0.89% were the top losers.

Meanwhile, expressing optimism over India’s exports growth, industry body -- the PHD Chamber of Commerce and Industry (PHDCCI) has said that the country can scale up its merchandise exports to G20 nations to $500 billion by 2030 from the current $212 billion in 2021-22 and significantly reduce trade deficit. It added that as the fastest growing economy in the G20 nations, India will play a significant role to convert uncertainties into opportunities.

PHDCCI President Saket Dalmia said ‘India's Presidency would be impactful for bringing stability at the most crucial juncture of geo-political conflicts, high inflation and slowing economic growth’. India's enhanced integration with G20 countries will reduce its trade deficit with the grouping by more than 50 per cent by 2030 from the current level of $107 billion. At the 'Amrit Kaal' of India's 100 years of Independence, he said the industry body has identified 75 products which currently account for $175 billion (around 40 per cent) in India's total exports.

World imports of these products comprise more than $3,700 billion but India's share in these items is less than 5 per cent. PHDCCI said as 50 per cent of India's exports are to the G20 countries, there is an immense potential to scale up shipments. It further said India has signed 13 free trade agreements (FTAs) and 6 preferential trade agreements (PTAs) with various countries, of which only 3 FTAs are with the G20 nations (Australia, Japan and Republic of Korea). Among the G20 countries, India holds trade surplus only with 8 economies.

The CNX Nifty traded in a range of 18,696.10 and 18,632.90. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.40%, JSW Steel up by 2.07%, ONGC up by 1.94%, UPL up by 1.90% and Eicher Motors up by 1.72%. On the flip side, Nestle down by 1.62%, ICICI Bank down by 1.28%, Bharti Airtel down by 1.09%, Asian Paints down by 0.96% and Hindustan Unilever down by 0.86% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 23.93 points or 0.32% to 7,478.96, France’s CAC decreased 44.77 points or 0.66% to 6,700.21 and Germany’s DAX decreased 109.95 points or 0.76% to 14,387.94.

Asian markets settled mostly higher on Wednesday, tracking overnight gains on Wall Street after cooler-than-expected inflation readings in the United States. Meanwhile, lower inflation reading also fuelled expectations that the US Fed will slow the pace of interest rate hikes. Chinese shares settled almost flat followed by the surge in Covid cases in the country. Although, Investors were awaiting central bank decisions on interest rates from the US Federal Reserve due later in the day, and the Bank of England and European Central Bank due on Thursday kept investors cautious and capped further gains.