Post Session: Quick Review

Indian benchmarks failed to bring some relief and again witnessed a dismal day of trade on Friday. The positive cues from Asian markets were shrugged off by local investors. Meanwhile, broader markets, BSE’s midcap and smallcap indices, also ended lower with cut of over half a percent respectively. Selling pressure in stocks belonging from IT, Metal and Banking counters, mainly pressurized the sentiment at D-street. After making cautious start, indices soon drifted lower, as investors preferred to play safe ahead of kick start of earning season in coming week. Besides, investors awaited key U.S. jobs data later in the day for additional clues on the Federal Reserve's rate-hike stance. Traders ignored report which stated that commerce and industry ministry is hopeful of improvement in foreign direct investment (FDI) inflows in the coming months despite global headwinds.

The selling intensified during second half of the day, as traders were concerned ahead of first advance estimates of economic growth for 2022-23 to be released later in the day by National Statistical Office. The first advance estimates of national income for 2022-23 is significant because the data is used for preparing the Budget of the central government for next financial year of 2023-24. However, markets while entering into the last leg of trade, witnessed some recovery from day’s lows. Finally, Sensex and Nifty settled below the psychological 60,000 and 17900 levels respectively.

On the global front, European markets were trading mostly in green and were set for their best week in eight on a drop in natural gas futures and upbeat economic data, while investors awaited euro zone inflation figures. Asian markets ended mostly in green amid optimism surrounding China's reopening and expectations of more stimulus to support domestic demand. Back home, foreign institutional investors (FII) sold shares worth Rs 1,449.45 crore on January 5, as per provisional data available on the NSE. Pharma stocks remained in focused after ratings agency ICRA report stated that continued pricing pressures in the US and European markets coupled with regulatory overhang and cost inflation will affect profit margins of major Indian pharmaceutical firms.

The BSE Sensex ended at 59,900.37, down by 452.90 points or 0.75% after trading in a range of 59,669.91 and 60537.63. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.72%, while Small cap index was down by 0.73%. (Provisional)

The only gaining sectoral indices on the BSE were FMCG was up by 0.03%, while TECK down by 1.86%, IT down by 1.77%, Metal down by 1.28%, Bankex down by 1.04% and Healthcare was down by 0.84% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 1.07%, Reliance Industries up by 1.01%, Nestle up by 0.57%, ITC up by 0.40% and Larsen & Toubro up by 0.23%. On the flip side, TCS down by 3.03%, Bajaj Finserv down by 2.76%, Indusind Bank down by 2.57%, Tech Mahindra down by 2.47% and Bajaj Finance down by 1.88% were the top losers. (Provisional)

Meanwhile, The Department for Promotion of Industry and Internal Trade (DPIIT) Joint Secretary Manmeet K Nanda has said that the commerce and industry ministry is hopeful of improvement in foreign direct investment (FDI) inflows in the coming months despite global headwinds. According to the DPIIT data, FDI equity inflows into India contracted by 14 per cent to $26.9 billion during the April-September this fiscal. The total FDI inflows (which includes equity inflows, re-invested earnings and other capital) too declined to $39 billion during the first six months of the current fiscal against $42.86 billion in the year-ago period.

She said that usually investments and equity inflows improve towards the last quarter of a financial year. She also said that foreign inflows have a lot of effect because of the global slowdown that ‘we are seeing for the last 18 months...But we are hopeful, India has shown very great numbers compared to rest of the countries...So, we are hoping that we would be making up for all that would have been a drop by’.

Talking about the national single window system (NSWS), Nanda said that about 75,600 approvals were granted so far through this system out of over 1,23,000 applications received. NSWS was soft-launched to all stakeholders and the public in September 2021 to provide a single platform to enable the identification and obtaining of approvals and clearances needed by investors, entrepreneurs, and businesses in India. Out of 75,600 approvals, 57,850 approvals have been approved by the commerce ministry. So far, 27 central ministries and departments have been onboarded on the system, besides 19 states and UTs.

On the number of pending FDI proposals particularly from China under Press Note 3 (PN3) of 2020, she said ‘pendency is probably the lowest at this point in time’. Under that press note, the government had made its prior approval mandatory for foreign investments from countries that share a land border with India to curb opportunistic takeovers of domestic firms following the COVID-19 pandemic. She said ‘there is a mechanism through which all these proposals are viewed at. There is an inter-ministerial committee that looks at it...’.

The CNX Nifty ended at 17,859.45, down by 132.70 points or 0.74% after trading in a range of 17,795.55 and 18,047.40. There were 10 stocks advancing against 40 stocks declining on the index. (Provisional)

The top gainers on Nifty were Britannia up by 1.06%, Mahindra & Mahindra up by 0.98%, Reliance Industries up by 0.91%, BPCL up by 0.69% and Bajaj Auto up by 0.58%. On the flip side, TCS down by 3.01%, JSW Steel down by 2.98%, Indusind Bank down by 2.79%, Bajaj Finserv down by 2.62% and Tech Mahindra down by 2.52% were the top losers. (Provisional)

European markets were trading mostly in green, UK’s FTSE 100 increased 9.94 points or 0.13% to 7,643.39 and France’s CAC was up by 1.49 points or 0.02% to 6,762.99. On the flip side, Germany’s DAX was down by 45.65 points or 0.32% to 14,390.66.

Asian markets ended mostly higher on Friday with optimism surrounding China’s reopening of its borders this week after three years of covid lockdowns. Meanwhile, investors are awaiting the release of closely watched US nonfarm payrolls data later in the day for additional clues on the US Federal Reserve's future rate path. Japanese shares finished higher, even as hawkish comments from US Fed members Esther George and James Bullard deepened fears of elevated interest rates for longer than expected. Besides, the yen’s continued retreat from seven-month peak and encouraging data on service sector boosted sentiment.