Post Session: Quick Review

It turned out to be a fruitful day for Indian equity markets with frontline gauges ending session higher by over a percent. Optimistic cues from across the globe underpinned the investors. The benchmark indices did not once break out in red and remained firmly placed in the green territory throughout the day. IT shares were led gains ahead of the earnings season. Besides, metal stocks traded with hefty gains, as China reopened its borders for the first time in three years. Optimistic cues from US markets took their toll on Indian markets to start day’s trade on positive note and further enlarged their gains. Traders took support as data from the Labor Department showed employment in the U.S. increased by slightly more than expected in the month of December. Traders ignored report revealed by the National Statistical Office (NSO) that Indian economy is likely to grow at 7 per cent in 2022-23 as compared to 8.7 per cent in 2021-22. 

However, in late afternoon session, markets slipped from day’s high points but remained in green territory. Sentiments were positive as latest central bank data showed that the Reserve Bank of India’s foreign exchange reserves rose by $44 million to $562.85 billion in the week ended December 30. During last leg of trade, indices recovered from day low’s and end with huge gains. Sentiment were largely positive on hints of less aggressive Fed rate hikes and signs of easing inflation.

On the global front, European markets were trading higher after rallying in the previous session on optimism surrounding China's reopening and expectations of slower rate hikes by the U.S. Federal Reserve. Besides, German industrial production recovered at a faster than expected pace in November. All Asian markets ended higher as signs of a slowdown in U.S. wage growth stoked hopes of smaller Fed rate hikes. Back home, Reserve Bank of India (RBI) Governor Shaktikanta Das stated that taming inflation is the top priority for South Asian countries like India as an unchecked price rise may pose risk to growth and investment outlook.

The BSE Sensex ended at 60,747.31, up by 846.94 points or 1.41% after trading in a range of 60,109.94 and 60,889.41. There were 27 stocks advancing against 3 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 0.93%, while Small cap index was up by 0.50%. (Provisional)

The top gaining sectoral indices on the BSE were TECK up by 2.61%, IT up by 2.54%, Power up by 1.79%, Utilities up by 1.56% and Metal was up by 1.51%, while Consumer Durables down by 0.82% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 3.56%, HCL Tech up by 3.07%, Indusind Bank up by 3.06%, TCS up by 3.05% and Bharti Airtel up by 2.69%. On the flip side, Titan Company down by 1.97%, Bajaj Finserv down by 1.24% and Maruti Suzuki down by 0.08% were the top losers. (Provisional)

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das said that taming inflation is the top priority for South Asian countries like India as an unchecked price rise may pose risk to growth and investment outlook. He said rising levels of debt, alongside sustained price pressures, pose risks to the region's economic growth and both must be contained. He noted that multiple external shocks in the form of COVID-related global supply chain disruptions, food and energy crisis following the war in Ukraine, and financial market volatility arising from the aggressive monetary policy tightening have exerted sustained price pressures in the South Asian economies. During the first three quarters of 2022, food price inflation in South Asia averaged more than 20 per cent.

He said ‘while the recent softening of commodity prices and supply chain bottlenecks should help in lowering inflation going ahead, risks to growth and investment outlook may rise if inflation persists at a high level’. He said the region's heavy dependence on imported fossil fuels has made it vulnerable to imported fuel inflation. He said ‘for successful disinflation, credible monetary policy actions accompanied by targeted supply side interventions, fiscal, trade policy and administrative measures have become the key instruments’. He said ‘The approach to disinflation, however, needs to be mindful of the rising risks to the growth outlook in an environment of deteriorating prospects for global growth and trade activity’.

Apart from inflation, he said reducing external debt vulnerabilities, moving focus to highly productive sectors, strengthening energy security, cooperation on a greener economy and increasing tourism should be focus areas for the region. Underscoring the importance of multilateral agencies in assisting the countries in the region, he said ‘The surge in external debt in recent years and associated vulnerabilities have undermined macroeconomic stability in several countries of the South Asian region’. He said ‘The role of multilateral organisations, particularly the IMF and the World Bank, becomes crucial in making debt treatment efforts more effective, while also strengthening the mechanism of recording, reporting and analysis of debt data so as to enhance transparency and preserve debt sustainability’, and added deep structural reforms in the region were necessary.

The CNX Nifty ended at 18,101.20, up by 241.75 points or 1.35% after trading in a range of 17,936.15 and 18,141.40. There were 44 stocks advancing against 6 stocks declining on the index. (Provisional)

The top gainers on Nifty were Mahindra & Mahindra up by 3.59%, TCS up by 3.38%, HCL Tech up by 3.35%, Indusind Bank up by 3.11% and Tech Mahindra up by 2.95%. On the flip side, Titan Company down by 2.11%, Bajaj Finserv down by 1.14%, Bajaj Auto down by 0.59%, HDFC Life Insurance down by 0.52% and Grasim Industries down by 0.42% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 10.98 points or 0.14% to 7,710.47, France’s CAC increased 5.00 points or 0.07% to 6,865.95 and Germany’s DAX was up by 37.40 points or 0.26% to 14,647.42.

Asian markets settled higher on Monday, on the back of strong Wall Street gains last Friday with expectations of slower interest rate hikes by the US Federal Reserve. Chinese shares rose on comments from Chinese Central bank PBoC Official suggesting optimism surrounding China’s growth conditions. Market sentiments improved further after China reopened its borders for the first time in three years. Hong Kong shares jumped after shares of tech giant Alibaba surged after news emerged that founder Jack Ma ceded control of sister company Ant Group, following China's crackdown on tech companies since 2020. Meanwhile, Japanese market was closed on Coming-of-Age holiday.