Markets bounce back after 4 days of fall

Indian equity benchmarks witnessed a strong recovery after a four-day selloff and settled with gains of over a percent each on Monday amid a positive trend in global markets. After making a cautious start, frontline indices soon gained strength. Some optimism came as a report stated that foreign investors have infused a net Rs 11,557 crore in Indian equities in December so far despite a market correction and increasing concerns over re-emergence of COVID in China and some other parts of the world. Some support also came as Department for Promotion of Industry and Internal Trade (DPIIT) has sought the views of 16 departments and ministries on its draft national retail trade policy, which is aimed at the overall development of all formats of the sector.

Key gauges extended gains in afternoon deals, as domestic sentiments remained up-beat with the Centre for Economics and Business Research (Cebr) stating that India's growth trajectory will see the country rise from fifth place on the World Economic League Table in 2022 to third in the global rankings by 2037. However, markets came off day’s high points, as some profit booking in the last half an hour trimmed some gains. Traders took a note of a private report that India's exports may have touched an all-time high of USD 422 billion in 2021-22 but recession in key western markets and geo-political crisis due to the Russia-Ukraine war are expected to impact the growth of the country's outbound shipments in 2023.

On the global front, European markets were closed amid Christmas holiday. Asian markets ended in green on Monday, amid signs that U.S. inflation may be receding. Traders were awaiting a speech by the governor of Japan's central bank Monday for hints into whether the Bank of Japan might further adjust its longstanding ultra-lax monetary policy to cope with pressures from inflation.

Back home, gems and jewellery industry stocks remained in watch with report that India's gems and jewellery industry has achieved its annual export target of $48 billion till the last quarter of the current financial year. Aluminium industry stocks also were in focus as industry body Assocham sought reduction in basic customs duty and correction of inverted duty structure on critical raw materials for the aluminium industry as high import duties is a huge disadvantage for the sector heavily dependent on imported raw materials.

Finally, the BSE Sensex rose 721.13 points or 1.20% to 60,566.42 and the CNX Nifty was up by 207.80 points or 1.17% to 18,014.60.

The BSE Sensex touched high and low of 60,833.78 and 59,754.10, respectively. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 2.31%, while Small cap index was up by 3.13%.

The top gaining sectoral indices on the BSE were Utilities up by 3.40%, PSU up by 3.25%, Power up by 3.18%, Industrials up by 2.53% and Realty up by 2.41%, while Healthcare down by 0.45% was the lone losing index on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.99%, SBI up by 3.97%, Tata Steel up by 2.74%, Bajaj Finserv up by 2.53% and ITC up by 2.51%. On the flip side, Nestle down by 1.24%, Kotak Mahindra Bank down by 0.45%, Sun Pharma down by 0.38%, Hindustan Unilever down by 0.13% and Titan Company down by 0.05% were the top losers.

Meanwhile, Retailers Association of India (RAI) has said India's retail industry saw a 19 per cent rise in sales over pre-pandemic levels during the April-November 2022 period riding on the back of strong performance of segments such as quick service restaurant and footwear.

It highlighted that region wise, the eastern part clocked the highest growth at 21 per cent as compared to the same period in 2019. North India followed with a 19 per cent growth while both western and southern parts witnessed an 18 per cent rise each.

Further it stated the industries that did particularly well during this period were the QSR (quick service restaurant) and the footwear industries, with a 30 per cent growth compared to 2019. However, it added the beauty, wellness and personal care industry only saw a 7 per cent growth as against the same period in 2019.

On the outlook for 2023, RAI Chairman Bijou Kurien said retail in India is expected to grow better than all other key markets across the world. Omnichannel retail has become the norm for retailers. He also said concepts like ONDC (Open Network for Digital Commerce) will enable millions of small retailers to participate in digital commerce.

The CNX Nifty traded in a range of 18,084.10 and 17,774.25. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were SBI up by 4.02%, Indusind Bank up by 4.02%, Hindalco up by 2.99%, Coal India up by 2.88% and Bajaj Finserv up by 2.74%. On the flip side, Cipla down by 1.89%, Divi's Lab down by 1.81%, Dr. Reddy's Lab down by 1.29%, Nestle down by 1.16% and Kotak Mahindra Bank down by 0.61%were the top losers.

Asian markets settled higher on Monday, even as several markets in the region, such as Hong Kong, Malaysia and Singapore were closed for holidays. Japanese shares rose tracking Wall Street's strength in the previous session and signs that US inflation may be receding. Seoul shares gained marginally on institutional buying. Moreover, Chinese shares climbed despite concerns over surging Covid-19 cases in the country. Chinese defence-related shares jumped amid heightened tensions around the Taiwan Strait. Taiwan's defence ministry has said 43 Chinese air force planes crossed the Taiwan Strait's median line in the past 24 hours as Beijing continues its military activities close to the island, which China considers part of its territory.