Benchmarks fall for second consecutive day

Indian equity benchmarks closed in the red for the second consecutive day on Thursday dragged down by banking and finance counters.  Key gauges opened positive but soon went in negative territory amid continuous foreign fund outflows. Foreign Institutional Investors (FIIs) offloaded shares worth a net Rs 2,620.89 crore on January 4, 2023, according to exchange data. Some concerns came with rating agency ICRA’s report stating 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, in the last hour of the trade, renewed buying across Oil & Gas, FMCG and Energy stocks helped the benchmarks to pare around half of the intraday losses. Traders took some support with a report that private sector banks are expected to report healthy growth in earnings during the October–December quarter of FY23. This would be aided by robust credit growth, margin expansion, benign credit costs, and lower provisioning burden. However, operational costs may remain high due to investment in businesses. Traders took a note of Bibek Debroy’s statement, chairman of Economic Advisory Council to the Prime Minister, that India's GDP will be close to $20 trillion by 2047 and per capita income may reach $10,000 (at current value of USD).

On the global front, European markets were trading mostly in red as the Federal Reserve's December 13-14 policy meeting minutes dashed hopes of a Fed pivot anytime soon. The minutes showed that Fed officials are committed to keep interest rates high through 2023 to curb 'unacceptably high' inflation. Asian markets settled mostly higher on Thursday as investors reacted to modestly hawkish Federal Reserve minutes and data showing slight improvement in China's services sector. Also aiding sentiment, China's central bank said it would step up financing support to spur domestic demand and support a stable real estate market in 2023.

Finally, the BSE Sensex fell 304.18 points or 0.50% to 60,353.27 and the CNX Nifty was down by 50.80 points or 0.28% to 17,992.15.

The BSE Sensex touched high and low of 60,877.06 and 60,049.84, respectively. There were 12 stocks advancing against 18 stocks declining on the index.

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

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 up by 1.03%, while Financial Services down by 1%, Bankex down by 0.78%, TECK down by 0.61%, IT down by 0.61% and Consumer Durables down by 0.44% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.91%, NTPC up by 1.77%, Hindustan Unilever up by 1.75%, Mahindra & Mahindra up by 1.27% and Nestle up by 1.22%. On the flip side, Bajaj Finance down by 7.21%, Bajaj Finserv down by 5.10%, ICICI Bank down by 2.22%, Infosys down by 1.32% and Power Grid Corporation down by 1.09% were the top losers.

Meanwhile, Federation of Automobile Dealers Associations (FADA) has said that retail sales of overall vehicles in India grew by 15.28 per cent to 2,11,20,441 units in 2022 led by record sales of passenger vehicles and tractors. In 2021, total retail sales of vehicles in India were at 1,83,21,760 units.

FADA said two-wheelers retail sales stood at 1,53,88,062 units last year, a growth of 13.37 per cent from 2021 when sales stood at 1,35,73,682 units. Passenger vehicles (PV) retail sales were at 34,31,497 units in 2022, as against 29,49,182 units in 2021, up 16.35 per cent. In 2022, commercial vehicles retail sales stood at 8,65,344 units, as against 6,55,696 units in 2021, a growth of 31.97 per cent. Three-wheeler retail in 2022 stood at 6,40,559 units, as compared to 3,73,562 units in 2021, up 71.47 per cent.

In December 2022, it said the total vehicle retail sales were down 5.4 per cent at 16,22,317 units as against 17,14,942 units in the year-ago month. Two-wheelers retail sales stood at 11,33,138 units last month, as against 12,75,894 units in December 2021, a decline of 11.19 per cent. Passenger vehicle retail sales were at 2,80,016 units as compared to 2,58,921 units in December 2021, up 8.15 per cent, while commercial vehicles segment witnessed retail sales of 66,945 units as compared to 60,491 units in December 2021, a growth of 10.67 per cent.

The CNX Nifty traded in a range of 18,120.30 and 17,892.60. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.17%, Bajaj Auto up by 2.12%, ITC up by 2.02%, Hindustan Unilever up by 1.96% and JSW Steel up by 1.86%. On the flip side, Bajaj Finance down by 7.23%, Bajaj Finserv down by 5.24%, ICICI Bank down by 2.27%, Infosys down by 1.28% and Titan Company down by 1.25% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 15.18 points or 0.22% to 6,761.25 and Germany’s DAX decreased 18.55 points or 0.13% to 14,472.23, while UK’s FTSE 100 increased 31.61 points or 0.42% to 7,616.80.

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.