Post Session: Quick Review

Wednesday turned out to be a disappointing session of trade for the Indian stock markets with Bourses ending cut of over one percent. Investors maintained risk-averse approach ahead of minutes of the US Federal Reserve's latest policy meeting which is due later in day, which can impact the outlook for interest rates, as well as the release of the closely watched monthly US jobs report on Friday. Domestic markets witnessed selling pressure throughout the day, as traders failed to take support from reports that India’s services sector growth expanded further in the month of December, with a quicker upturn in new business boosting output growth. More jobs were created and companies remained strongly upbeat towards the year-ahead outlook for business activity. As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index surged to 58.5 in December from 56.4 in November.

Tracking weak Wall Street's main indexes, domestic markets made flat-to-negative start and further dragged lower. Traders also shifted focus towards the upcoming quarterly earnings season, as IT majors like TCS, Infosys, Wipro and HCL Technologies is all set to release their third-quarter results. Traders remained concerned about interest rate hikes and recessionary fears. However, optimistic cues from European market supported indices to recover some losses but failed to hold recovery and touch day’s low points in last leg of trade.

On the global front, European markets were trading higher as a lower inflation reading from France boosted sentiment, while investors awaited euro zone business activity data and minutes from the U.S. Federal Reserve's last meeting. Asian markets ended mixed ahead of the release of notes from a Federal Reserve meeting that investors hope might show the U.S. central bank is moderating plans for more interest rate hikes to cool inflation. Back home, in scrip specific development, Radiant Cash Management Services has debuted at Rs 99.30 on the BSE, up by 5.30 points or 5.64% from its issue price of Rs 94. The offering, which was opened for subscription between December 23, 2022 and December 27, 2022 was subscribed 53%. The issue price was fixed at Rs 94 per share i.e. at lower end of price band of Rs 94-99 apiece. 

The BSE Sensex ended at 60,657.45, down by 636.75 points or 1.04% after trading in a range of 60,593.56 and 61,327.21. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index declined 0.97%, while Small cap index was down by 0.79%.

The top losing sectoral indices on the BSE were Metal down by 2.83%, Realty down by 1.99%, Utilities down by 1.74%, Energy down by 1.70%, Oil & Gas down by 1.52%, while there were no gaining sectoral indices on the BSE.

The only gainers on the Sensex were Maruti Suzuki up by 0.22% and TCS up by 0.10%. On the flip side, Tata Steel down by 2.49%, Tata Motors down by 2.13%, Wipro down by 2.02%, Power Grid down by 1.99% and Infosys down by 1.78% were the top losers.

Meanwhile, India’s services sector growth expanded further in the month of December, with a quicker upturn in new business boosting output growth. More jobs were created and companies remained strongly upbeat towards the year-ahead outlook for business activity. As per the survey report, the seasonally adjusted S&P Global

India Services PMI Business Activity Index surged to 58.5 in December from 56.4 in November. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- improved to 59.4 in December from 56.7 in November.

The report noted that new business received by Indian services companies increased for the seventeenth month in a row in December. Moreover, the rate of expansion was sharp and the fastest since August. It further said that Indian service providers readjusted their capacities to accommodate for rising new business via further recruitment drives in December. The pace of job creation was above its long-run average, but eased to a five-month low.

On the inflation front, input costs at services companies rose further, with companies mentioning wage pressures and higher prices for energy, food and transportation. The overall rate of inflation quickened from November and was above its long-run average. By sector, input cost inflation was most acute in Consumer Services. As a result of a further increase in business expenses, firms lifted their own selling prices at the end of the year. The rate of charge inflation eased from November, but remained solid and historically elevated. Finance & Insurance topped the rankings for output charge inflation for the second month running.

Meanwhile, predictions of further improvements in demand and marketing plans continued to support business confidence in December. Companies were at their least upbeat in three months, but the overall level of positive sentiment remained above its long-run average. Competitive pressures and inflation concerns dampened overall optimism.

The CNX Nifty ended at 18,042.95, down by 189.60 points or 1.04% after trading in a range of 18,020.60 and 18,243.00. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 1.25%, HDFC Life Insurance up by 0.50%, Maruti Suzuki up by 0.48%, Dr. Reddy's Lab up by 0.36% and Ultratech Cement up by 0.17%. On the flip side, JSW Steel down by 4.12%, Hindalco down by 3.83%, Coal India down by 3.10%, Tata Steel down by 2.28% and ONGC down by 2.21% were the top losers.

European markets were trading higher, UK’s FTSE 100 increased 8.14 points or 0.11% to 7,562.23, France’s CAC increased 75.85 points or 1.15% to 6,699.74 and Germany’s DAX was up by161.07 points or 1.14% to 14,342.74.

Asian markets settled mostly lower on Wednesday as investors awaited minutes from the US Federal Reserve's December meeting later in the day, which could offer clues to the Fed's future actions. Japanese shares dropped as traders returned to their desks after a long holiday weekend for the New Year, while Japan’s currency yen advanced with fears that the BoJ might move away from its ultra-easy monetary policy. However, Chinese shares rose on the back of the expectations of swift post-covid recovery in the economy. Hong Kong shares gained after China’s property developers surged following forecast beating December sales and news that Chinese officials were considering further support for property developers. Meanwhile, shares in Hong Kong listed Alibaba Group Holdings jumped as much as 8% following news that Ant Group Co., in which the e-commerce giant holds a stake, won approval to raise $1.5 billion for its consumer unit.