Sensex, Nifty end flat amid volatility on Tuesday

Indian equity benchmarks ended flat in volatile session on Tuesday, on profit booking ahead of the derivative expiry. Investors also awaited cues from the Union Budget due to be unveiled next week. Key gauges opened higher and managed to trade in green in first half, as traders got support with economic think-tank NCAER stating that business confidence has recovered from the lows of the pre-pandemic (2019-20) and the following two pandemic years. The NCAER-NSE Business Confidence Index (BCI) was higher at 126.6 in the third quarter of 2022-23 than the year-ago level of 124.4. Some optimism also came with Commerce and Industry Minister Piyush Goyal’s statement that the country's services exports are doing extremely well and going by the current trend these outbound shipments would register about 20 per cent growth in this fiscal (FY23) and cross the $300 billion target despite global economic uncertainties.

However, markets erased their initial gains in late afternoon deals and ended flat as traders turned cautious with the Securities and Exchange Board of India (Sebi) in its latest data showing that Investment in the Indian capital markets through participatory notes slightly dropped to Rs 96,292 crore at the end of December 2022 from the preceding month on higher valuation of domestic markets. Some anxiety also came after Christian de Guzman - senior vice president at Moody's Investors Service and primary analyst for India said that India's gross domestic product (GDP) growth is seen declining to 5.6 percent in 2023-24, although it will still be one of the best performing large economies in the G-20. Besides, provisional data available on the NSE showed that foreign institutional investors (FII) have net-sold shares worth Rs 219.87 crore on January 23, 2023. 

On the global front, Asian markets settled mixed on Tuesday amid bets for less-aggressive rate hikes from the Federal Reserve. Most of the other regional markets are closed for the Lunar New Year holiday, including South Korea, Malaysia, Singapore, China, Hong Kong and Taiwan. European markets were trading mostly in red even as the results of a purchasing managers survey showed the eurozone economy expanded in January for the first time in seven months, helping ease fears of an impending recession.

Finally, the BSE Sensex rose 37.08 points or 0.06% to 60,978.75 and the CNX Nifty was down by 0.25 points to 18,118.30.

The BSE Sensex touched high and low of 61,266.06 and 60,849.12, 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 0.30%, while Small cap index was down by 0.43%.

The top gaining sectoral indices on the BSE were Auto up by 1.17%, IT up by 0.66%, Consumer Durables up by 0.51%, TECK up by 0.45% and FMCG up by 0.15%, while Metal down by 1.21%, Healthcare down by 1.01%, Realty down by 0.95%, PSU down by 0.86% and Telecom down by 0.82% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.34%, Maruti Suzuki up by 3.27%, HCL Technologies up by 1.47%, HDFC Bank up by 1.35% and HDFC up by 0.92%. On the flip side, Axis Bank down by 2.50%, Power Grid Corporation down by 1.76%, Tata Steel down by 1.35%, Kotak Mahindra Bank down by 1.31% and Larsen & Toubro down by 1.18% were the top losers.

Meanwhile, the National Council of Applied Economic Research (NCAER), one of India’s premier economic policy research think tanks, in its latest survey report showed that business confidence has recovered from the lows of the pre-pandemic (2019-20) and the following two pandemic years (2020-21 and 2021-22). The NCAER-NSE Business Confidence Index (BCI) was higher at 126.6 in the third quarter of 2022-23 than it was recorded a year ago at 124.4 in 2021-22:Q3. However, sentiments continued to soften sequentially in the first, second and third quarters of 2022-23.

It further said sentiments relating to macro conditions remained relatively buoyant in the third quarter of 2022-23 as compared to the second. The share of positive responses increased for the component, ‘overall economic conditions will improve in the next six months’ and remained unchanged for the component, ‘present investment climate is positive’.

The think-tank said in contrast, sentiments pertaining to firms’ own conditions softened between the two quarters for the components, ‘financial position of firm will improve in the next six months’ and ‘present capacity utilisation is close to or above the optimal level’. NCAER carried out the 123rd Round of its Business Expectations Survey (BES) in December 2022, with support from the National Stock Exchange of India (NSE).

The CNX Nifty traded in a range of 18,201.25 and 18,078.65. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.37%, Maruti Suzuki up by 3.31%, Bajaj Auto up by 1.67%, Britannia Industries up by 1.55% and HCL Technologies up by 1.35%. On the flip side, Axis Bank down by 2.40%, Hindalco down by 2.05%, Dr. Reddy's Lab down by 2.05%, Power Grid Corporation down by 1.87% and SBI Life Insurance Company down by 1.76% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 28.97 points or 0.37% to 7,755.70 and Germany’s DAX lost 28.11 points or 0.19% to 15,074.84. On the flip side, France’s CAC rose 5.44 points or 0.08% to 7,037.46.

Asian markets settled mixed on Tuesday amid most of the regional markets including South Korea, Malaysia, Taiwan, China, Hong Kong, and Singapore were closed for the Lunar New Year celebrations. Japanese shares gained tracking Wall Street's strength overnight along with bets for less aggressive interest rate hikes from the US Federal Reserve.
Nikkei 225 settled higher by 393.15 points or 1.44% to 27,299.19, while Jakarta Composite dipped by 14.08 points or 0.21% to 6,860.85.