Post Session: Quick Review

Healthy buying activity in second half of the session helped the Local equity markets to end Tuesday’s session over half a percent higher propped up by Metal stocks. Key indices made positive start but soon turned volatile for little time, as traders were cautious on a private report that a sustained surge in Covid cases in China could further exacerbate a contraction in India’s exports to its fourth-largest market in the coming months, as order flow has already been faltering at a steady pace. Street now forecast a 40-45% crash in exports to China this fiscal from $21.3 billion in FY22 if the Covid surge continues through January. However, tracking firm Asian cues, markets further gained strength to trade higher after China said it would drop its quarantine requirements for inbound visitors, further easing three-year border controls aimed at curbing COVID-19.

Upward rally in metal sector’s stocks supported the markets to maintain firm trade in afternoon session. Some support also came with reports that Gross direct tax collections for 2022-23 (up to November 30) are up by 29.66 per cent at Rs 10,93,385 crore, which was over Rs 8,43,301 crore collected during the corresponding period of last year. The growth has been achieved due to the performance of economy, administration and implementation of the provisions of the direct tax laws. In late afternoon session, bourses traded largely steady as sentiments were upbeat after Secretary in Department for Promotion of Industry and Internal Trade (DPIIT) Anurag Jain said India has the third largest startup ecosystem in the world and the way startups are performing; soon the country will become a top ecosystem globally. He also said that the country's startups will attract significant foreign direct investments (FDI) in 2023 on account of steps being taken by the government to strengthen the ecosystem for budding entrepreneurs.

On the global front, European markets were trading higher tracking a global rally in equities after China further relaxed its COVID-19 curbs, raising hopes of a recovery in the world's second-largest economy. Asian markets ended in green as traders continue to react to indications that U.S. inflation may be receding after data showed consumer spending and inflation slowed in November. However, this may not enough to discourage the US Fed from driving interest rates to higher levels next year. Back home, sector wise, sugar stocks remained in limelight after Ministry of Consumer Affairs, Food and Public Distribution announced 100 percent incentive on sugar sacrificed for producing ethanol from B-heavy molasses, sugarcane juice and syrup.

The BSE Sensex ended at 60,927.43, up by 361.01 points or 0.60% after trading in a range of 60,405.66 and 60,986.68. There were 25 stocks advancing against 5 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.78%, while Small cap index was up by 1.46%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 4.59%, Telecom up by 1.54%, Capital Goods up by 1.40%, Realty up by 1.38% and Industrials was up by 1.38%, while FMCG was down by 0.22% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 6.10%, Tata Motors up by 2.69%, Asian Paints up by 1.72%, Wipro up by 1.66% and Larsen & Toubro up by 1.62%. On the flip side, Hindustan Unilever down by 0.83%, Nestle down by 0.51%, Mahindra & Mahindra down by 0.45%, ITC down by 0.37% and NTPC down by 0.21% were the top losers. (Provisional)

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its ‘December Credit Market Tracker’ has forecasted that the core inflation is likely to remain elevated in the remaining FY23, given that there is a pending pass-through of higher input costs by producers and a continued robust demand in the economy. The country’s retail inflation, measured by the Consumer Price Index (CPI), decreased to 5.88 per cent in the month of November 2022 as compared to 6.77 per cent in October 2022.

As per the report, the surplus liquidity in the banking system has improved in December 2022 compared to November 2022. The surplus liquidity rose moderately to Rs 1115 billion (average up to December 19, 2022) from Rs 454 billion (average for November 2022), largely driven by foreign inflows to equity market and government spending.

According to the LAF data, the Reserve Bank of India (RBI) injected liquidity in the banking system in November 2022 to offset the tightening liquidity. However, it said that the liquidity conditions may tighten further due to a deficit in India’s balance of payments in FY23 and a seasonal uptick in the currency leakage in Q4.

The CNX Nifty ended at 18,132.30, up by 117.70 points or 0.65% after trading in a range of 17,967.45 and 18,149.25. There were 40 stocks advancing against 10 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 6.33%, Tata Steel up by 5.86%, JSW Steel up by 4.47%, ONGC up by 2.48% and Tata Motors up by 2.43%. On the flip side, Hindustan Unilever down by 0.92%, Apollo Hospital down by 0.86%, Nestle down by 0.61%, ITC down by 0.43% and NTPC down by 0.27% were the top losers. (Provisional)

European markets were trading higher, France’s CAC increased 46.21 points or 0.71% to 6,551.11 and Germany’s DAX was up by 59.42 points or 0.43% to 14,000.35.

Asian markets settled higher on Tuesday. Chinese shares gained sharply due to optimism over the reopening of the world’s second largest economy after China said it would reopen borders and scrap Covid quarantine rules for international arrivals from next month. Markets' sentiments improved even after official data showed profits at China’s industrial firms contracted further in the January-November period when strict Covid-related restrictions disrupted factory activity and supply chains as the virus spread through key manufacturing hubs. Japanese shares ended marginally higher as investors awaited the release of Summary of Opinions from the BoJ's December meeting due Wednesday for directional cues. Although, the latest readings of Japan’s unemployment, housing starts and retail sales proved to be a mixed bag. Meanwhile, market in Hong Kong was closed for Christmas holiday.