Post Session: Quick Review

Indian benchmark indices joined global weakness since morning and showcased dull trade on last trading day of week. After ending higher for three days, markets concluded day’s trade in red as investors sold-off riskier shares. As for broader indices, the BSE Mid cap index traded with hefty losses, while Small cap index traded with limited losses during the session. Banking and IT counters dragged the markets lower for the day. The overall markets breadth were largely negative till the end. Overnight sluggishness of US stock markets was the first big trigger to force dimness into Indian equity markets following the release of a Labor Department report showing a bigger than expected increase in producer prices. The Labor Department said its producer price index for final demand climbed by 0.7 percent in January after edging down by a revised 0.2 percent in December. Traders have recently expressed concerns over Federal Reserve will raise rates higher than currently anticipated in an effort to combat inflation.

Indian equity markets made somber start amid revived expectations the U.S. central bank would stick to its monetary tightening path. Traders ignored economic think tank Global Trade Research Initiative’s report where it said that India’s merchandise exports have recorded a healthy growth in both value and volume terms in 2022. The outbound shipments rose by 14.6 per cent year-on-year to $453.3 billion in 2022. In afternoon session, indices extended their downward trend, as investors also worried about hawkish comments from Federal Reserve Bank of Cleveland President Loretta Mester about the last rate hike and what future changes are needed. Markets remained under pressure till the end as global economic data from the week emphasized the stickiness of inflation and strength of the economy.

On the global front, European markets were trading lower as investors continue to assess the impact of inflation and production data from the U.S. and U.K. and company earnings. Asian markets ended mostly in red, as hotter-than-expected U.S. producer price data coupled with hawkish comments from two Federal Reserve officials stoked worries about further interest-rate hikes. Back home, former Niti Aayog Vice Chairman Rajiv Kumar has said the Budget should have focused more on asset monetisation and privatisation, besides allocating more funds to the social sector schemes. Finance Mininster Nirmala Sitharaman presented the Union Budget 2023-24 in the Lok Sabha on February 1.

The BSE Sensex ended at 61,002.57, down by 316.94 points or 0.52% after trading in a range of 60,810.67 and 61,302.72. There were 7 stocks advancing against 23 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.75%, while Small cap index was down by 0.24%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 0.89%, Industrials up by 0.34%, Energy up by 0.22% and Oil & Gas was up by 0.17%, while Realty down by 1.86%, Telecom down by 1.30%, Bankex down by 1.23%, TECK down by 1.17% and IT was down by 1.06% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Larsen & Toubro up by 2.10%, Ultratech Cement up by 1.77%, Asian Paints up by 1.11%, Reliance Industries up by 0.27% and ITC up by 0.21%. On the flip side, Nestle down by 3.16%, Indusind Bank down by 3.13%, Mahindra & Mahindra down by 1.73%, SBI down by 1.69% and TCS down by 1.57% were the top losers. (Provisional)

Meanwhile, economic think tank Global Trade Research Initiative (GTRI) in its report has said that India’s merchandise exports have recorded a healthy growth in both value and volume terms in 2022. The outbound shipments rose by 14.6 per cent year-on-year to $453.3 billion in 2022. It said ‘the study found that products where exports increased to cover a value of $315.9 billion (69.8 per cent of total merchandise exports). But, products whose export quantities increased over the previous year represent $285.6 billion (63 per cent of total exports)’.

Major product categories which have recorded growth in both value and volume terms include petroleum products, sugar, and basmati rice. Petroleum products, including diesel, gasoline and naphtha represent an export value of $94 billion. The unit price rose between 50-115 per cent in one year. The high unit prices may be primarily due to the high prices of crude oil. Sugar saw a unit value increase of 15 per cent, with exports of over $5 billion.

As per the report, gold jewelry and similar products with an export value of about $9 billion saw lower unit value realization in 2022. Similarly, hot rolled steel products with exports of $769 million in 2022 saw a decline of 26.2 per cent in unit value realization. Exports in 2022 saw a healthy trend with products covering 63 per cent of export value and saw an increase in the quantity of export. Further products where India's exports have been traditionally strong but now feeling regulatory heat in a few countries or low global demand include shrimps, and iron-ore pellets.

The CNX Nifty ended at 17,944.20, down by 91.65 points or 0.51% after trading in a range of 17,884.60 and 18,034.25. There were 14 stocks advancing against 36 stocks declining on the index. (Provisional)

The top gainers on Nifty were Larsen & Toubro up by 2.21%, BPCL up by 1.84%, Ultratech Cement up by 1.76%, Asian Paints up by 0.99% and Coal India up by 0.95%. On the flip side, Adani Enterprises down by 4.11%, Nestle down by 3.10%, Indusind Bank down by 2.93%, SBI Life down by 2.08% and HDFC Life Insurance down by 2.01% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 27.19 points or 0.34% to 7,985.34, France’s CAC fell 60.88 points or 0.83% to 7,305.28 and Germany’s DAX was down by 150.05 points or 0.98% to 15,383.59.

Asian markets settled mostly lower on Friday, tracking Wall Street’s fall overnight as strong US data coupled with hawkish comments from US Federal Reserve officials fuelled concerns that the US Federal Reserve would further tighten monetary policy to tackle inflation. Meanwhile, Chinese and Hong Kong shares dropped amid concerns over escalating US-China geopolitical tensions, despite China's top leaders declared a ‘decisive victory’ over Covid-19 and claimed the world's lowest fatality rate. China Renaissance Holdings shares plunged after the investment bank said it is unable to contact Bao Fan, the firm's controlling shareholder, as well as chairman, executive director and CEO. Moreover, Japanese shares declined amid uncertainties over the direction of monetary policy under new Bank of Japan Governor Kazuo Ueda, but a weaker yen continued to buoy exporters.