Benchmarks stage steady upward march on Monday

Indian equity benchmarks, after two sessions of losses, staged a steady upward march on Monday following heavy buying in Auto, FMCG and Power shares. The indices started on a flat note but caught gaining momentum soon, as data showed foreign investors continued their positive momentum and have injected a net Rs 10,555 crore in Indian equities so far in December amid stabilisation in oil prices and moderating US inflation. Sentiments also got boost as the gross direct tax collections have grown 26 per cent to over Rs 13.63 lakh crore so far this fiscal, aided by TDS deductions and healthy corporate advance tax mop-up. Some optimism also came as data released by the Reserve Bank showed that India’s forex reserves rose by $2.908 billion to $564.06 billion for the week ended on December 9.

Indian frontline indices extended gains in second half of trading session, as sentiments remained positive with Textile Minister Piyush Goyal’s statement that countries across the world are looking at India as a trusted partner and want to sign free trade agreements with it after its emergence as a strong force in the world. Some optimism also came with report that the Department for Promotion of Industry and Internal Trade (DPIIT) is working closely with 24 sectors in order to boost domestic manufacturing, increase exports and cut down imports. It said efforts are on to boost the growth of these sectors in a holistic and coordinated manner. Traders overlooked Icra Ratings' report that with exports continuing to remain under stress for the second consecutive month in November, and imports also falling, the current account deficit is likely to moderate in the second half and close the fiscal with a 3.3 percent of GDP or $108-112 billion, which still be a record high.

On the global front, European markets were trading higher as investors reacted positively to the latest survey results showing that a measure of German business sentiment increased for a third straight month in December. Asian markets settled mostly down on Monday amid lingering worries over a possible recession and uncertainty over China's economic reopening as the country battled a wave of COVID infections. China's top leaders pledged to stimulate domestic consumption and the real estate market, helping limit regional losses to some extent.

Back home, banking stocks were in watch as latest Reserve Bank of India (RBI) data showed that bank credit grew by 17.5 per cent year-on-year (YoY) to Rs 131.06 trillion in the fortnight ended December 2, reflecting the continuation of firm demand for loans in the economy. Oil & gas industry stocks were in focus as data of the commerce ministry showed that the country's imports of Crude oil rose by 52.58 per cent to USD 146.57 billion during April-November period this fiscal.

Finally, the BSE Sensex rose 468.38 points or 0.76% to 61,806.19 and the CNX Nifty was up by 151.45 points or 0.83% to 18,420.45.

The BSE Sensex touched high and low of 61,844.92 and 61,265.31, respectively. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.67%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Auto up by 1.67%, FMCG up by 1.43%, Power up by 0.94%, Energy up by 0.93% and Metal up by 0.91%, while IT down by 0.55% and TECK down by 0.28% were the few losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.97%, Power Grid Corporation up by 2.58%, Bharti Airtel up by 2.31%, Bajaj Finserv up by 2.00% and Hindustan Unilever up by 1.71%. On the flip side, TCS down by 1.13%, Infosys down by 0.97%, Tata Motors down by 0.80%, Sun Pharma down by 0.63% and Indusind Bank down by 0.47% were the top losers.

Meanwhile, Icra Ratings in its latest report has said that with exports continuing to remain under stress for the second consecutive month in November, and imports also falling, the current account deficit is likely to moderate in the second half and close the fiscal with a 3.3 per cent of GDP or USD 108-112 billion, which still be a record high.

It stated falling exports and commodity prices will also help the country print in a moderate CAD at USD 24-26 billion in Q3FY23 from likely high of USD31-34 billion in Q2FY23. Merchandise exports remained flat in November with an on-year growth of 0.6 per cent.  Imports also moderated in November to 5.4 per cent but declined by 1.4 percent month-on-month, aided marginally lower commodity prices.

It mentioned average trade deficit narrowed in October-November from Q2 FY23, auguring well for current account deficit for Q3, but warned merchandise exports are expected to contract in December-March, owing to external slowdown and softer commodity prices.

The CNX Nifty traded in a range of 18,431.65 and 18,244.55. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Adani Ports &SEZ up by 4.05%, Adani Enterprises up by 3.02%, Mahindra & Mahindra up by 2.99%, Eicher Motors up by 2.75% and Power Grid Corporation up by 2.65%. On the flip side, TCS down by 1.08%, ONGC down by 0.85%, Tata Motors down by 0.84%, Infosys down by 0.80% and Sun Pharma down by 0.62% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 39.20 points or 0.53% to 7,371.32, France’s CAC increased 51.40 points or 0.8% to 6,504.03 and Germany’s DAX increased 95.96 points or 0.69% to 13,989.03.

Asian markets settled mostly down on Monday tracking Wall Street losses last Friday along with worries that further policy tightening by the Federal Reserve could result in a global recession next year. Chinese shares tumbled amid uncertainty over China's economic reopening, despite China's top leaders pledged to revive domestic consumption and support the real estate market. Moreover, Japanese shares plummeted due to selling pressure, with renewed speculation that the Bank of Japan could tighten its ultra-loose monetary policy amid rising inflationary pressures.