Post Session: Quick Review

Indian Equity markets showcased sluggish trend throughout the day and breaching their crucial below 61,800 (Sensex) and 18,450 (Nifty) levels as traders fret that tighter policy would trigger a recession. It was a negative start for indices, as globally market participants were worried after US Federal Reserve has raised interest rates by 50 basis points (bps) and signaled plans to keep raising them more in 2023. Indian markets widened their losses, as sentiments were downbeat with former governor of the Reserve Bank of India Raghuram Rajan’s statement that the next year will be difficult for the Indian economy as also for the rest of the world and the country failed to generate reforms needed for growth. He said policies should be formulated keeping in mind the lower middle class which suffered the most due to the coronavirus pandemic.

Traders took a note of the finance minister Nirmala Sitharaman’s statement that India is seeing a fall in demand for jobs under a rural employment guarantee programme. The street overlooked report stating that financialisation of savings is growing in the country, and the assets under management will grow to nearly three-fourths of GDP in five years to FY2027. Markets continued to witness downward pressure in afternoon session, as domestic sentiments also got hit with private report stating that India's current account deficit likely rose to its highest in nearly a decade in the July-September quarter as elevated commodity prices and a weak rupee stretched the trade gap even further. In late afternoon session, Indian equities lost some more ground to touch day’s low point as traders maintained risk-averse approach ahead of interest rate decision by the Bank of England and the European Central Bank (ECB).

On the global front, European markets were trading lower as investors awaited an interest rate decision from the bloc's central bank, a day after the U.S. Federal Reserve signalled it would keep hiking rates further. All Asian markets ended lower after the Hong Kong Monetary Authority lifted its benchmark rate by 50 basis points on Thursday, following the policy announcement of the U.S. Federal Reserve. The HKMA adjusted the Base Rate upwards to 4.75 percent from 4.25 percent with immediate effect. Back home, sector wise, textile industry remained in limelight, as Icra in its latest report has said that even as macro headwinds impact performance of textile players across segments in the second quarter of 2022-23, the companies are expected to witness a healthy turnover in this financial year (FY23). However, it said the margins are expected to moderate amidst cost pressures.

The BSE Sensex ended at 61,799.03, down by 878.88 points or 1.40% after trading in a range of 61,715.61 and 62,624.81. There were 2 stocks advancing against 28 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 1.05%, while Small cap index was down by 0.61%. (Provisional)

The only gaining sectoral indices on the BSE were Oil & Gas was up by 0.09%,while IT down by 2.06%, TECK down by 1.92%, Metal down by 1.82%, Consumer Durables down by 1.37%, Realty down by 1.25% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 0.09% and Sun Pharma up by 0.08%. On the flip side, Tech Mahindra down by 3.77%, Titan Company down by 2.62%, Infosys down by 2.50%, HDFC down by 2.07% and ITC down by 1.97% were the top losers. (Provisional)

Meanwhile, executing confidence that inflation would further decline, Finance Minister Nirmala Sitharaman has said that the government is on track to meet its budgetary target for deficit and added that there is no fear of stagflation in India. She further said that inflation has come down and it is now in the tolerable band of the RBI. She highlighted that inflation has been declining since April 2022 and it is declining further. As per the law, Monetary Policy Committee headed by RBI Governor has been given task of maintaining inflation at 4 per cent with the upper tolerance limit of 6 per cent and the lower tolerance limit of 2 per cent.

She said Prime Minister Narendra Modi and his group of ministers are constantly watching and making periodic interventions and taking measures to keep inflation under check to ensure that the poor do not have to bear the extra financial burden. She also said several supply-side measures have been taken by the government to address inflation, including reduction in excise duty by Rs 8 per litre on petrol and Rs 6 per litre on diesel on May 21, 2022, prohibition of export of wheat products, imposition of export duty on rice, and reduction in import duties. In addition, the government has imposed stock limits on edible oils and oil seeds, and the inclusion of soya meal as an essential commodity in the schedule of the Essential Commodities Act, 1955 and imposition of a stock limit on soya meal.

Finance minister said stagflation is a phenomenon when there is slowdown in economy and high inflation, and added retail inflation has come down below 6 per cent to 5.8 per cent and the wholesale price index at 21-month low of 5.85 per cent in November. She added India is the fastest growing economy and lower inflation with forebearance limit. With regard to fiscal deficit, she said the government would be able to meet the fiscal deficit target of 6.4 per cent of the GDP for the current financial year. She also said the government is committed to the path of fiscal consolidation.

On declining value of the rupee against the US dollar, she said ‘Every report has told you that Indian rupee has only strengthened against the dollar…we have performed much better than many other emerging market economies.’ Exchange rate of the Indian Rupee (INR) is market-determined. INR, which had earlier weakened by 8.7 per cent against the US dollar till October 19, 2022 has since pared some of the losses and its depreciation stands at about 6.9 per cent in the current financial year till November 30, 2022. In comparison to emerging market peer currencies, INR movement has been relatively stable.

The CNX Nifty ended at 18,414.90, down by 245.40 points or 1.32% after trading in a range of 18,387.70 and 18,652.90. There were 7 stocks advancing against 43 stocks declining on the index. (Provisional)

The top gainers on Nifty were Britannia up by 1.26%, Hero MotoCorp up by 0.86%, SBI Life up by 0.30%, NTPC up by 0.29% and Sun Pharma up by 0.19%. On the flip side, Tech Mahindra down by 3.98%, Titan Company down by 2.64%, Infosys down by 2.46%, HDFC down by 2.09% and Eicher Motors down by 1.96% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 55.01 points or 0.73% to 7,440.92, France’s CAC decreased 75.16 points or 1.12% to 6,655.63 and Germany’s DAX was down by 147.75 points or 1.02% to 14,312.45.

Asian markets settled lower on Thursday, tracking overnight losses in Wall Street after the US Federal Reserve raised interest rates by 50 basis points and signalled further rate hikes ahead. Chinese and Hong Kong shares declined amidst disappointing industrial production and retail sales numbers in China, while surging Covid-19 cases also dampened sentiments.