Key gauges end lower on Thursday

Indian equity benchmarks traded volatile and ended lower on the weekly expiry day. After the flat start, the trade was negative for the most part of the session as investors preferred a cautious approach ahead of inflation and industrial production data to be released later in the day.  Traders also remained cautious as a World Economic Forum’s report stated that a cost of living crisis, digital inequality, geopolitical contest for resources, natural disasters and extreme weather events are the biggest risks for India over the short and medium term. Some anxiety also came with a private report stating that funding for Indian startups dropped by 33 per cent to $24 billion in 2022 as compared to the previous year though it was nearly double the amount recorded in 2019 or 2020. Unabated foreign fund outflows also hit the investor sentiment. Foreign institutional investors (FIIs) offloaded shares worth Rs 3,208.15 crore on Wednesday, according to exchange data.

However, indices trimmed most of their losses in the final hours. Traders found some support with the government’s data showing that the country's gross direct tax collection rose 24.58 per cent to Rs 14.71 lakh crore till January 10 this fiscal, buoyed by an upsurge in personal income tax mop-up. After adjusting refunds, net direct tax collection stood at Rs 12.31 lakh crore, 19.55 per cent higher than the net collections for the corresponding period of last year. Traders also took a note of Road Transport and Highways Minister Nitin Gadkari’s statement that India and Japan will undertake joint projects for digital transformation in the areas of Intelligent Transport Systems (ITS) and eco-friendly mobility. Further, he said India has always placed the Indo-Pacific at the heart of its engagement with the countries of Southeast and East Asia under India's Act East Policy.

On the global front, European markets were trading higher, while Asian markets ended mostly higher on Thursday following the broadly positive cues from global markets, as the markets reflected optimism about the highly anticipated US consumer price inflation report due later today. The report is expected to show a slowdown in the annual rate of consumer price growth and could have a significant impact on the outlook for interest rates.

Finally, the BSE Sensex fell 147.47 points or 0.25% to 59,958.03 and the CNX Nifty was down by 37.50 points or 0.21% to 17,858.20.

The BSE Sensex touched high and low of 60,290.35 and 59,632.32, respectively. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.24%, while Small cap index was down by 0.02%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.80%, Industrials up by 0.50%, IT up by 0.39%, Power up by 0.34% and Utilities up by 0.25%, while Oil & Gas down by 1.01%, Energy down by 0.95%, Telecom down by 0.79%, Bankex down by 0.53% and Financial Services down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.81%, Larsen & Toubro up by 1.66%, HCL Technologies up by 1.62%, Maruti Suzuki up by 1.08% and Nestle up by 0.74%. On the flip side, Reliance Industries down by 2.11%, Axis Bank down by 1.54%, Tata Motors down by 1.40%, Kotak Mahindra Bank down by 1.26% and Bharti Airtel down by 1.12% were the top losers.

Meanwhile, domestic rating agency ICRA in its latest report has said that securitisation volumes for FY23 can reach Rs 1.70 lakh crore, as against Rs 1.26 lakh crore in FY22. It said securitisation volumes are estimated to have jumped 58 per cent to Rs 1.17 lakh crore in the April-December 2022 period as compared to the same period last year. At Rs 1.17 lakh crore, the volumes are higher than the retail assets securitisation in the entire FY22, which stood at Rs 1.26 lakh crore.

According to the report, buoyancy in securitisation can be attributed to the stable macroeconomic scenario and high credit growth for non-bank lenders, adding that on a quarterly basis, Q3FY23 volumes grew slightly at 3 per cent over the preceding quarter. After a gap of two years (FY21 and FY22), the current year is witnessing a balanced trend in the securitisation market. It also noted that the volumes in all three quarters stood in the range of 30-35 per cent of the YTD (year to date) securitisation, which contrasts with the last two years when securitisation volumes were impacted in certain quarters due to the Covid-19 pandemic.

The report stated that the high credit growth has prompted non-bank finance companies and housing finance companies to return to securitisation as a tool for raising funds. Securitisation volumes have long been dominated by mortgage-backed loans, followed by vehicle loans. The trend reversed in Q3FY23 when vehicle loans, at 33 per cent of the total volumes, inched slightly ahead of mortgage loans.

The CNX Nifty traded in a range of 17,945.80 and 17,761.65. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were SBI Life Insurance up by 1.91%, Ultratech Cement up by 1.89%, HCL Technologies up by 1.68%, Larsen & Toubro up by 1.65% and Dr. Reddy's Laboratories up by 1.36%. On the flip side, Divi's Lab down by 3.01%, Reliance Industries down by 2.02%, BPCL down by 1.96%, Axis Bank down by 1.55% and Tata Motors down by 1.43% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 45.38 points or 0.59% to 7,770.36, France’s CAC increased 44.29 points or 0.64% to 6,968.48 and Germany’s DAX increased 81.28 points or 0.54% to 15,029.19.

Asian markets ended mostly higher on Thursday following the broadly positive cues from US markets overnight, as the markets reflected optimism about the highly anticipated US consumer price inflation report due later today. The report is expected to show a slowdown in the annual rate of consumer price growth and could have a significant impact on the outlook for interest rates. Some support also came in as Japan posted a current account surplus of 1,803.6 billion yen in November, up 16.4 percent on year. That beat expectations for a surplus of 471 billion yen following the 64.1 billion yen deficit in October. Exports were up 20.7 percent on year at 9.008 trillion yen and imports jumped an annual 33.8 percent to 10.546 trillion yen for a trade deficit of 1.537 trillion yen. Chinese market ended slightly higher after swinging between modest gains and losses in thin trading volumes ahead of the Lunar New Year holidays.