Post Session: Quick Review

After two days of losses, the Dalal Street witnessed a positive trade on Monday, with both Sensex and Nifty ending notably higher. After a strong start, markets remained positive during the entire day. Traders took encouragement as India’s forex reserves zoomed by $10.417 billion to $572 billion as on January 13, making it one of the biggest weekly jumps in the kitty in recent times. In the previous reporting week, the overall reserves had dropped by $1.268 billion to $561.583 billion. Sentiments remained positive with a labour ministry stating that retail inflation for farm and rural workers sequentially eased to 6.38 per cent and 6.6 per cent, respectively, in December 2022, mainly due to lower prices of certain food items.

Some support also came with a UK Foreign Office minister’s statement that negotiations between Britain and India for an ambitious Free Trade Agreement (FTA) are ‘well advanced’, with the next round of talks set to commence very soon. He also asserted that a strong deal could boost the country's economy. Meanwhile, in a relief to exporters from hotel, healthcare, and educational sectors, the government has announced a one-time relaxation for them with respect to maintaining the average export obligation under the Export Promotion Capital Goods (EPCG) scheme.

In the afternoon session, indices came off day’s high, after gains got trimmed, as some cautiousness came with a private report stating that the Indian government is set to tap the brakes on a torrid pace of capital investment growth in the coming fiscal year as a slowing economy limits spending power by weakening tax revenue. But markets remained higher till the end, as sentiments were positive, after the Retirement fund body, Employees' Provident Fund Organisation (EPFO) in its latest ‘Provisional Estimate of Net Payroll’ data report has showed that India created 1625711 new jobs in the month of November 2022 as against revised figure of Rs 1114250 in October 2022.

On the global front, European markets were trading higher, as dovish Fed remarks helped offset investor concerns of a global economic slowdown. On a light day on the economic front, investors await Euro area consumer confidence survey results and a speech by ECB President Christine Lagarde at an event for directional cues. Further, the Japanese stock market ended higher, as members of the Bank of Japan's Monetary Policy Board agreed that the country's economy has continued to pick up steam. Back home, the apparel industry stocks remained in watch as Apparel Export Promotion Council (AEPC) said Japan offers huge business opportunities for Indian apparel exporters and the industry should explore that market.

The BSE Sensex ended at 60941.67, up by 319.90 points or 0.53% after trading in a range of 60761.88 and 61113.27. There were 21 stocks advancing against 9 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was up by 0.44%, while Small cap index down by 0.30%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.65%, TECK up by 1.48%, Healthcare up by 0.80%, Bankex up by 0.76% and FMCG up by 0.73%, while Realty down by 0.72%, Power down by 0.45%, Utilities down by 0.29%, Capital Goods down by 0.29% and Industrials down by 0.27% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Hindustan Unilever up by 1.94%, Sun Pharma up by 1.85%, Tech Mahindra up by 1.65%, TCS up by 1.56% and Infosys up by 1.47%. On the flip side, Ultratech Cement down by 4.62%, NTPC down by 1.22%, Tata Steel down by 0.73%, Larsen & Toubro down by 0.58% and Reliance Industries down by 0.54% were the top losers. (Provisional)

Meanwhile, in light of the economic slowdown caused by the COVID-19 pandemic, the commerce ministry has given a one-time relaxation for exporters from hotel, healthcare, and educational sectors with respect to maintaining the average export obligation under the Export Promotion Capital Goods (EPCG) scheme. Under the scheme, imports of capital goods are allowed duty free, subject to an export obligation.

It added that this relief will help the hotel, healthcare and educational sectors to cope with the negative impact of the pandemic on their export activities. For 2020-21 and 2021-22, these sectors will not be required to maintain the average export obligation for EPCG authorisations issued to them. These sectors will also have the option to extend the export obligation period for a longer duration without having to pay any additional fees.

It further said ‘This extension will be granted without payment of composition fees. However, for EPCG authorisations issued for sectors other than hotel, healthcare and educational, the export obligation period may be extended for the number of days the existing export obligation period falls within February 1, 2020 and July 31, 2021’. In such cases, the extension will be granted without payment of composition fees, but with a 5 per cent additional export obligation in value terms on the balance export obligation as on March 31, 2022.

The scheme aims to encourage the production of goods for export by providing import duty concessions on capital goods. It is administered by the Directorate General of Foreign Trade (DGFT) and is governed by the Foreign Trade Policy of India.

The CNX Nifty ended at 18118.55, up by 90.90 points or 0.50% after trading in a range of 18063.45 and 18162.60. There were 34 stocks advancing against 16 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindustan Unilever up by 1.87%, Sun Pharma up by 1.84%, Tech Mahindra up by 1.80%, Eicher Motors up by 1.68% and UPL up by 1.58%. On the flip side, Ultratech Cement down by 4.56%, Grasim Industries down by 1.45%, NTPC down by 1.10%, JSW Steel down by 1.01% and Tata Steel down by 0.77% were the top losers. (Provisional)

European markets were trading higher; UK’s FTSE 100 increased 5.81 points or 0.07% to 7,776.40, France’s CAC rose 0.06 points to 6,996.05 and Germany’s DAX gained 3.57 points or 0.02% to 15,037.13.

Japanese market settled higher on Monday after the Japanese currency Yen retreated from last week's 7 1/2-month high. Meanwhile, Bank of Japan's policy meeting minutes showed that board members wanted to modify their yield control curve in order to improve market functionality. Market sentiments improved further after sharp gains on Wall Street overnight. Most of Asian markets including Hong Kong, China, Indonesia, Malaysia, Singapore, South Korea and Taiwan were closed for Lunar New Year celebrations.

Nikkei 225 ended up by 352.51 points or 1.31% to 26,906.04.