Post Session: Quick Review

After trading with massive losses for most part of the day, Indian equity benchmarks managed to cut most of their losses in last hour of trade to end the session marginally lower. Mirroring weak Asian markets cues, key indices made a negative start, as traders continued to concern about a global recession and an increase in COVID-19 infections in China, which have tempered hope for easing stringent pandemic restrictions. Besides, foreign fund outflows also dented sentiments in domestic markets. Foreign institutional investors (FIIs) have net-sold shares worth Rs 538.10 crore on December 19, as per provisional data available on the NSE. Markets further extended their losses, as some cautiousness came amid private report stating that liquidity in the banking system has slipped into a deficit for the first time in three weeks, prompting banks to borrow the largest quantum of funds from the Reserve Bank of India (RBI) in around a month and a half.

Indices continued to sag under weakness in afternoon session, as sentiments got hit after Japan's central bank unexpectedly tweaked its bond yield controls - a move that will allow long-term interest rates to rise more. Meanwhile, Hawkish comments on interest rates from former Federal Reserve official William Dudley also fueled worries about a worldwide recession. Traders overlooked Union Finance Minister Nirmala Sitharaman’s statement that scheduled commercial banks have written off loans amounting to Rs 10,09,511 crore in the last five financial years and the process of recovery of dues from the borrowers continues. Besides, Finance Minister Nirmala Sitharaman stated that the notes in circulation (NIC) in the economy rose 8% as of December 2 from a year before to Rs 31.93 trillion. Between March 2016 (the note ban exercise was undertaken in November 2016) and March 2022, the notes in circulation rose from Rs 16.42 trillion to Rs 31.06 trillion. This means it grew from the pre-demonetisation level of 10.7% of GDP in FY16 to 13.1% in FY22. However, losses got trimmed in late afternoon session as traders went for value buying.

On the global front, European markets were trading lower after the Bank of Japan held its benchmark rate at record lows, but widened the range for yield fluctuations in the benchmark government bonds. This move has been taken as a step toward the country leaving behind its policy of yield curve control and near-zero interest rates as the country grapples with surging inflation. All Asian markets ended lower as traders fret that central bank efforts to tame inflation will tip economies into recession. Back home, sector wise, aviation sector remained in limelight after Directorate General of Civil Aviation (DGCA) in its latest data has said India's domestic passenger traffic rose 11.06 per cent to 116 lakh in November 2022 over the year-ago period. In November 2021, the air passenger traffic stood at 105.16 lakh.

The BSE Sensex ended at 61,702.29, down by 103.90 points or 0.17% after trading in a range of 61,102.68 and 61,780.37. There were 11 stocks advancing against 19 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.27%, while Small cap index was down by 0.02%. (Provisional)

The few gaining sectoral indices on the BSE were Energy up by 0.21%, IT up by 0.11% and Oil & Gas was up by 0.10%, while Telecom down by 1.32%, Realty down by 1.04%, Auto down by 0.76%, FMCG down by 0.57%, Metal down by 0.51% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were TCS up by 1.26%, Reliance Industries up by 0.73%, Axis Bank up by 0.61%, Ultratech Cement up by 0.50% and Indusind Bank up by 0.43%. On the flip side, Tata Motors down by 1.88%, Hindustan Unilever down by 1.50%, Mahindra & Mahindra down by 1.34%, Larsen & Toubro down by 1.29% and Bharti Airtel down by 1.23% were the top losers. (Provisional)

Meanwhile, Finance Minister Nirmala Sitharaman has said note in circulation (NiC) has witnessed an annual growth of 7.98 per cent to Rs 31.92 lakh crore as of December 2, 2022. She said the demand for currency depends upon several macroeconomic factors, including economic growth and level of interest rates. The quantum of cash or banknotes in the economy depends on the requirement for meeting the demand for banknotes due to GDP growth, inflation, replacement of soiled banknotes and growth in non-cash modes of payment.

She stressed that the mission of the government is to move towards a less cash economy to reduce the generation and circulation of black money and to promote the digital economy. She added both the government and RBI have taken measures to promote a less cash economy and encourage digital payment.

With regard to 'Rationalisation of Merchant Discount Rate (MDR) for Debit Card Transactions', she said the RBI has advised banks to ensure that merchants on-boarded by them do not pass on MDR charges to customers while accepting payments through debit cards. The minister noted the Department of Revenue advised banks to immediately refund charges collected, if any, on or after January 1, 2020, on transactions carried out using the electronic modes prescribed under section 269SU of the Act and not to impose charges on any future transactions through the prescribed modes.

The CNX Nifty ended at 18385.30, down by 35.15 points or 0.19% after trading in a range of 18202.65 and 18404.90. There were 12 stocks advancing against 37 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Enterprises up by 2.21%, TCS up by 1.31%, Reliance Industries up by 0.87%, Indusind Bank up by 0.42% and Axis Bank up by 0.38%. On the flip side, SBI Life down by 2.86%, Eicher Motors down by 2.23%, UPL down by 1.99%, Tata Motors down by 1.79% and Hindustan Unilever down by 1.60% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 14.02 points or 0.19% to 7,347.29, France’s CAC decreased 43.74 points or 0.68% to 6,429.55 and Germany’s DAX was down by 47.34 points or 0.34% to 13,895.53.

Asian markets settled lower on Tuesday, tracking falls in Wall Street shares overnight on fears of a global recession with bets that the US Federal Reserve will continue its interest rate hikes to curb inflation. Hawkish comments from former Federal Reserve official William Dudley on interest rates also weighed on market sentiments. Japanese shares led regional losses after the Bank of Japan modified its yield curve control tolerance range and holding its ultra-low benchmark interest rates steady. Further, Chinese and Hong Kong shares slumped on uncertainty over the impact of record-high daily increases in Covid-19 cases in China. While, the People’s Bank of China (PBoC) kept its key lending rates unchanged for a fourth consecutive month.