Post Session: Quick Review

Indian equity benchmarks witnessed a fall for yet another day on Thursday, with both Sensex and Nifty ending in red, amid fears emanating from a sharp rise in cases of coronavirus in many countries. Markets made a positive start of the day, as sentiments were optimistic with former Niti Aayog vice chairman Arvind Panagariya’s statement that the Indian economy is likely to grow at over 7 per cent in the current fiscal year, and observed that the growth rate should sustain next year too provided the forthcoming Budget does not have any negative surprises. Besides, Minister of State in the Ministry of Commerce and Industry, Anupriya Patel has said that the bilateral Trade between India and the Gulf Cooperation Council (GCC) grew from $87.35 billion in FY 2020-21 to $154.66 billion in FY 2021-22, registering an increase of 77.06% on a year-on-year basis.

However, markets soon turned negative and remained lower till the end, as some concern came amid provisional data available on the NSE showing that foreign institutional investors (FIIs) sold shares worth Rs 1,119.11 crore on December 21.  Traders were cautious, as in a tightening cycle, a premature pause in monetary policy action would be a costly policy error, Reserve Bank Governor Shaktikanta Das opined while voting along with five other members of the MPC for raising the key lending rate by 35 basis points earlier this month. Besides, Finance Minister Nirmala Sitharaman said the government is keeping an eye on inflation which is purely extraneous nowadays because of fuel and fertiliser prices. Adding more worries, a CAG audit report on Direct Taxes drew attention to 57 instances of significant errors and irregularities in corporation tax assessments of high value cases involving tax effects of Rs 6,304.56 crore.

On the global front, European markets were trading mostly in green as the US consumer confidence rebounded in December, and the dollar regained stability after the Bank of Japan rocked markets with a surprise decision to loosen its grip on government bond yields. Asian markets settled mostly in green on Thursday, after producer prices in South Korea were down 0.2 percent on month in November. That follows the 0.5 percent increase in October. Among the individual components, prices for agricultural, forestry and marine products dropped 3.2 percent on month, while manufacturing products eased 0.2 percent, utilities dipped 0.1 percent and services were flat.

Back home, the auto components industry stocks were in focus as the Automotive Component Manufacturers Association of India said India's auto components industry witnessed a 34.8 per cent growth to Rs 2.65 lakh crore in first-half of 2022-23, riding on domestic demand, particularly from the passenger vehicles segment. Besides, stocks related to the steel industry remained in watch with the rating agency ICRA’s report stating that the demand for finished steel in India is expected to grow 8 per cent in 2022 as compared to 2021. It said supported by the government's infrastructure-led growth model, domestic finished steel demand has registered a double-digit growth of 11.9 per cent in the first eight months of the current fiscal.

The BSE Sensex ended at 60826.22, down by 241.02 points or 0.39% after trading in a range of 60637.24 and 61464.38. There were 6 stocks advancing against 24 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.77%, while Small cap index down by 1.83%. (Provisional)

The only gaining sectoral index on the BSE was TECK up by 0.07%, while Industrials down by 1.78%, Utilities down by 1.60%, Capital Goods down by 1.57%, Power down by 1.49% and Realty down by 1.33% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Infosys up by 0.75%, Ultratech Cement up by 0.71%, Asian Paints up by 0.65%, Kotak Mahindra Bank up by 0.58% and Sun Pharma up by 0.52%. On the flip side, Mahindra & Mahindra down by 2.61%, Bajaj Finserv down by 2.55%, Indusind Bank down by 2.26%, Tata Motors down by 2.12% and Larsen & Toubro down by 1.70% were the top losers. (Provisional)

Meanwhile, pressing for the prohibition of instruments like Bitcoin, Reserve Bank of India (RBI) Governor Shaktikanta Das has warned that the next financial crisis can be triggered by private cryptocurrencies, if such speculative instruments are allowed to grow.  Das has been staunchly opposed to such instruments and the RBI has gone till the Supreme Court with its contention. He said 'Cryptocurrencies… have huge inherent risks from macroeconomic and financial stability (perspective) and we have been pointing it out.’

The RBI governor stated that the developments over the last one year, which include the latest crash of cryptocurrency exchange FTX, which is termed as one of the biggest financial frauds in the history of the US, illustrate the threat posed by such instruments. He noted that private cryptocurrencies' valuation has shrunk from $190 billion to $140 billion and there is no underlying value for the market-determined price.

Das acknowledged that different jurisdictions are taking different stances on it, but the RBI would like to stick to its stance of prohibiting them completely. He said the origin of private cryptocurrencies lie in their intent to break the system, in not believing in fiat currencies introduced by the central banks and not believing in a regulated financial system.

The CNX Nifty ended at 18127.35, down by 71.75 points or 0.39% after trading in a range of 18068.60 and 18318.75. There were 10 stocks advancing against 39 stocks declining, while 1 stock remained unchanged on the index. (Provisional)

The top gainers on Nifty were Ultratech Cement up by 0.89%, SBI Life Insurance up by 0.84%, Infosys up by 0.83%, Grasim Industries up by 0.69% and Kotak Mahindra Bank up by 0.63%. On the flip side, UPL down by 3.38%, Mahindra & Mahindra down by 2.51%, Bajaj Finserv down by 2.37%, Eicher Motors down by 2.05% and Tata Motors down by 2.02% were the top losers. (Provisional)

European markets were trading mostly higher, UK’s FTSE 100 increased 26.60 points or 0.35% to 7,523.92, France’s CAC increased 25.97 points or 0.39% to 6,606.21, while  Germany’s DAX decreased 11.29 points or 0.08% to 14,086.53.

Asian markets settled mostly in green on Thursday tracking Wall Street gains for second consecutive day overnight on improved consumer confidence in the United States. South Korean shares gained as the nation saw its annualized producer price index for November reach its lowest reading in 19 months. Japanese shares rose as long-term bond yields calmed down after steep climbs, while the Japan’s currency yen also showed signs of stabilizing following its biggest jump in 24 years. However, Chinese shares fell due to concerns over Covid situation in China, even after China said it would implement policy measures to support the Chinese economy and aim for an improvement in growth in early 2023.