Post Session: Quick Review

Dark clouds have gathered over the Indian markets which traded under selling pressure for second consecutive day. The domestic markets failed to take any strength from positive cues from Asian peers. Mirroring volatile Wall Street, indices saw some volatility in early trade but lost their momentum and entered into red terrain. Traders reacted negatively to the FOMC minutes which released overnight that suggests the Fed will remain aggressive in its policy to control inflation. Traders shrugged off falling crude oil prices. The overall markets breadth were largely negative till the end. Banking and IT counters dragged the markets lower for the day.

In afternoon deals, markets suffered with deep cut, as sentiments were down beat ahead of weekly F&O expiry later in the day including the closely watched monthly US jobs report due on Friday. Besides, rating agency ICRA in its recent research report said that the evolving global macroeconomic headwinds could moderate growth for Indian IT services industry over the medium term. It has cited that given the Indian IT services industry generates about 60-65 per cent of revenues from the US market and 20-25 per cent from the European market, it remains susceptible to macroeconomic uncertainties and adverse regulatory changes in these key operating markets. However, during last hour of trade, markets recovered some losses but still ended the session in negative territory. 

On the global front, European markets were trading mostly in red as traders weighed the reopening of China's economy against prospects of more interest rate hikes. Asian markets ended mostly in green, as investors reacted to modestly hawkish Federal Reserve minutes and data showing slight improvement in China's services sector. Back home, foreign institutional investors (FII) sold shares worth Rs 2,620.89 crore on January 4, as per provisional data available on the NSE. In scrip specific development, Bajaj twins were noticeable losers for a day. 

The BSE Sensex ended at 60,353.27, down by 304.18 points or 0.50% after trading in a range of 60,049.84 and 60,877.06. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.33%, while Small cap index was up by 0.01%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.60%, FMCG up by 1.36%, Energy up by 1.28%, Auto up by 1.12% and Metal was up by 1.03%, while Bankex down by 0.78%, TECK down by 0.61%, IT down by 0.61%, Consumer Durables down by 0.44% and Telecom was down by 0.20% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were ITC up by 1.93%, Hindustan Unilever up by 1.86%, NTPC up by 1.77%, Mahindra & Mahindra up by 1.27% and Nestle up by 1.22%. On the flip side, Bajaj Finance down by 7.24%, Bajaj Finserv down by 5.01%, ICICI Bank down by 2.18%, Infosys down by 1.23% and Titan Company down by 1.05% were the top losers. (Provisional)

Meanwhile, expressing optimism over India’s economic situation, Bibek Debroy, chairman, Economic Advisory Council to the Prime Minister, said the country’s gross domestic product (GDP) will be close to USD 20 trillion by 2047 and per capita income may reach USD 10,000 (at current value of USD). Therefore, he said India will be a transformed society He noted though the COVID-19 pandemic may have passed, still there is a lot of uncertainty around the world on what is happening in China, about the Russia-Ukraine conflict, growth prospects in Europe and the USA.

Remarking that basic necessities have been provided to the people and more so in the rural areas by the government, he said the economic indicators after the COVID have improved in India. Everyone is now looking to see the rate of growth in 2023-24 and the growth of economy by 2047. According to him, India may witness volatilities in forex markets and capital markets and exchange rates due to some of the uncertainties around the world such as Russia- Ukraine conflict, growth prospects in Europe and the USA. He said ‘since India is not insulated, we will also face the volatility, forex markets and capital markets and exchange rates will face volatility. Inflation rates will also be impacted to some uncertainty’.

Debroy opined that India needs need a simplified GST and direct tax as these are the areas on which everybody should think and the research that helps in making policy decisions much informed. In order to increase India's growth rate from 7 per cent to eight per cent, he said lot more research needs to be done at the level of the States as different States are at different levels of development and hence the sources of growth will also be different. He added ‘but the fact of the matter is that to raise the growth trajectory, we need to make land markets more efficient. Agriculture will also vastly improve when we make land markets more efficient. Similarly, we need to make the labour markets and capital markets also more efficient’.

The CNX Nifty ended at 17,992.15, down by 50.80 points or 0.28% after trading in a range of 17,892.60 and 18,120.30. There were 31 stocks advancing against 19 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hero MotoCorp up by 2.14%, Cipla up by 2.01%, NTPC up by 1.98%, ITC up by 1.97% and JSW Steel up by 1.96%. On the flip side, Bajaj Finance down by 7.17%, Bajaj Finserv down by 5.10%, ICICI Bank down by 2.22%, Titan Company down by 1.36% and Infosys down by 1.31% were the top losers. (Provisional)

European markets were trading mostly in red, France’s CAC decreased 31.47 points or 0.46% to 6,744.96 and Germany’s DAX was down by 35.73 points or 0.25% to 14,455.05. On the flip side, UK’s FTSE 100 was up by 29.20 points or 0.38% to 7,614.39.

Asian markets settled mostly higher on Thursday tracking Wall Street gains overnight following the Fed’s December policy meeting minutes, which showed that the US central bank officials agreeing that the Fed should slow the pace of aggressive interest rate increases. Meanwhile, investors are also awaiting key US jobs data due on Friday that could influence the Fed's policy path. Chinese shares gained after a private survey showed China’s services activity contracted at a slower pace in December, while the People's Bank of China (PBoC) said it would step up financing support to spur domestic demand and support a stable real estate market in 2023, also aided market sentiments. Hong Kong shares rose amid optimism over signs of reopening in China. The Chinese government announced on Thursday that the border between mainland China and Hong Kong will gradually reopen from January 8, paving the way for a restoration of economic and social ties that have been disrupted for three years. Moreover, a weaker safe-haven yen boosted Japanese export shares.