Markets end with losses on last trading day of 2022

Indian equity benchmarks erased all of their gains to end the last trading day of 2022 on a bearish note due to fag-end selling amid weak cues from the European markets. The indices made a positive start, as traders took encouragement with Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the Indian economy is resilient with financial stability maintained with a well-capitalised banking sector, amid global uncertainties and shocks. Some support also came in as Union Commerce Minister Piyush Goyal said he expects at least two more free trade agreements to be signed up in 2023. He said negotiations are scheduled with the UK, European Union and Canada.  Sentiments remained optimistic with report stating that after remaining above the Reserve Bank's comfort level of 6 per cent for most part of this year, retail inflation is slowly easing, and efforts are likely to continue to further reduce it in the coming months amid global uncertainties.

However, a sharp cut in the last half an hour pushed the bulls on the back foot. Traders also turned cautious as data released by the Reserve Bank showed that the country's current account deficit widened to 4.4 per cent of the GDP in the quarter ended September, from 2.2 per cent GDP during the April-June period, due to higher trade gap. Some anxiety also came with private report stating that the wave of consolidation is likely to hit the shores of the country's fast-growing retail industry next year also as larger players seek to strengthen their footprints, leverage technologies to improve efficiency and expand beyond metros. Meanwhile, the finance ministry said that India's external debt stood at $610.5 billion in the second quarter of 2022-23, down by $2.3 billion from end-June 2022. The external debt to GDP ratio stood at 19.2 per cent as at end-September 2022 as compared to 19.3 per cent at end-June.

On the global front, Asian markets settled mostly higher on Friday despite lingering inflation concerns and soaring COVID-19 cases in China. European markets were trading lower as doubts over official Chinese COVID numbers and new regulations for travelers from China curbed investor optimism surrounding China's reopening. The escalation in the Russia-Ukraine conflict and lingering worries over aggressive central bank tightening also weighed on sentiment.

Finally, the BSE Sensex fell 293.14 points or 0.48% to 60,840.74 and the CNX Nifty was down by 85.70 points or 0.47% to 18,105.30.

The BSE Sensex touched high and low of 61,392.68 and 60,743.71, respectively. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.37%, while Small cap index was up by 0.76%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.85%, Realty up by 0.78%, PSU up by 0.78%, Metal up by 0.38% and Oil & Gas up by 0.13%, while FMCG down by 0.59%, Bankex down by 0.55%, Utilities down by 0.52%, Power down by 0.46% and TECK down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.21%, Titan Company up by 1.77%, Bajaj Finance up by 1.03%, Tata Steel up by 0.81% and Tata Motors up by 0.57%. On the flip side, ICICI Bank down by 1.74%, Bharti Airtel down by 1.56%, HDFC down by 1.44%, Larsen & Toubro down by 1.15% and Nestle down by 1.13% were the top losers.

Meanwhile, Union Commerce Minister Piyush Goyal has said he expects at least two more free trade agreements (FTA) to be signed up in 2023. He said negotiations are scheduled with the UK, European Union and Canada. He added that his ministry does not have the bandwidth to tend to requests by smaller trading partners like New Zealand with which the bilateral trade stands at USD 350 million.

Talking about the operationalisation of the India-Australia Economic Cooperation and Trade Agreement signed in April this year, he said January itself is filled with meetings between Indian Commerce Ministry officials and their counterparts abroad. After handing over certificates of origin to the first among the Indian goods being sent to Australia after the agreement, Goyal said the FTA will benefit a slew of sectors, including textiles, gems and jewellery and also information technology, which gets aided by the dropping of double taxation.

Goyal said he expects Indian IT companies' billing to Australia alone growing to USD 1 billion in the next 5-7 years from USD 200 million at present. Besides, he said the Regional Comprehensive Economic Partnership (RCEP), which India walked out of in 2019, would have become a free trade agreement with China in effect.  He added that Indian industry was 'petrified' with the earlier UPA government's move to start negotiations on the same. He called the walkout an economically prudent and wise decision. As of now, with the agreement with Australia, India has separately struck trade agreements with 13 of the 15 countries in the RCEP, while only New Zealand and China remain.

The CNX Nifty traded in a range of 18,265.25 and 18,080.30. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.34%, Bajaj Auto up by 1.66%, Titan Company up by 1.64%, ONGC up by 1.62% and Coal India up by 1.53%. On the flip side, SBI Life Insurance down by 1.99%, Eicher Motors down by 1.78%, Grasim Industries down by 1.75%, ICICI Bank down by 1.66% and Bharti Airtel down by 1.50% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 20.49 points or 0.27% to 7,492.23, France’s CAC decreased 43.24 points or 0.66% to 6,530.23 and Germany’s DAX decreased 91.31 points or 0.65% to 13,980.41.

Asian markets settled mostly higher on Friday tracking overnight gains in Wall Street, despite lingering concerns over recession and soaring Covid-19 cases in China. Japanese shares ended almost unchanged, while the yen extended its rebound as the Bank of Japan (BoJ) announced another round of unscheduled bond purchases to limit selling pressure on sovereign debt. Meanwhile, Seoul market was closed for New Year’s holiday.