Post Session: Quick Review

Indian markets were on back foot on Monday as marketmen continued to shun riskier assets on mounting concerns about recession. A cautious approach adopted by participants ahead to release of minutes from the U.S. Federal Open Market Committee (FOMC) meeting slated to be released on Wednesday. Recent economic data has revived worries that inflation in the United States is not cooling as quickly as hoped. That has shaken hopes the Federal Reserve might take it easier on interest rate hikes and avoid tipping the economy into recession. Geopolitical tensions remained on investors' radar after North Korea fired off two shortrange ballistic missiles. Meanwhile, Banking and Financial Services counters dragged markets lower on Monday. As for boarder indices, the BSE Mid cap index and Small cap index traded volatile since morning. Finally, Both Sensex and Nifty ended session below their crucial 60,700 and 17850 marks, respectively. 

Earlier, indices made cautious start and soon turned volatile amid ongoing concerns about the outlook for interest rates. Further, markets traded above neutral lines after Federation of Indian Export Organisations (FIEO) said India's exports are expected to grow by 3-5 per cent to $435-445 billion in this fiscal. Meanwhile, the rupee gained 16 paise to 82.66 against the U.S. dollar in early trade as the American currency retreated from its elevated levels. However, in afternoon session, markets erased all their gains and turned negative, as traders' mind was the thought that this whole high inflation/Fed hiking scenario, may not actually be over as soon as many hoped.

On the global front, European markets were trading lower with investors cautious at the start of a week that includes the release of important Eurozone activity data as well as the minutes from the last Federal Reserve meeting. Asian markets ended mostly in green despite hawkish comments from ECB and Fed officials and rising geopolitical tensions after North Korea launched two ballistic missiles into waters off the east coast of the Korean Peninsula early in the day. Back home, Union Minister Jitendra Singh has said that India has had a huge quantum jump in the global benchmarks with India being the fastest growing economy in the world having overtaken United Kingdom, jumping forty steps up in the global innovation index, ranking third in the Startup ecosystem having more than 90,000 Start-Ups from 250 in 2014 with 100 unicorns.

The BSE Sensex ended at 60,691.54, down by 311.03 points or 0.51% after trading in a range of 60,607.02 and 61,290.19. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.12%, while Small cap index was down by 0.16%. (Provisional)

The few gaining sectoral indices on the BSE were IT up by 0.51%, TECK up by 0.32% and Auto was up by 0.24%, while Oil & Gas down by 1.12%, Bankex down by 1.06%, Energy down by 0.99%, PSU down by 0.74% and Realty was down by 0.72% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Ultratech Cement up by 1.58%, Tech Mahindra up by 1.45%, Power Grid up by 0.75%, Infosys up by 0.73% and Tata Motors up by 0.63%. On the flip side, Maruti Suzuki down by 1.37%, HDFC down by 1.36%, Kotak Mahindra Bank down by 1.28%, Axis Bank down by 1.09% and Bajaj Finance down by 1.07% were the top losers. (Provisional)

Meanwhile, expressing optimism over growth of Indian economy, former Niti Aayog Vice Chairman Rajiv Kumar has said that the country is likely to clock 6 percent growth rate next fiscal (FY24) and it can persevere with a high growth rate because of several reforms undertaken during the last eight years by the government. He further said major risks going forward will emerge from a synchronized downturn in the North American and European economies. He said ‘These will have to be tackled through careful policy measures designed to support our export efforts and at the same time improve the flow of private investment both from domestic sources as well as from foreign sources’.

Regarding on high inflation, he said the Reserve Bank has said that it will ensure that inflation rate is brought under control. He noted ‘also a good winter crop will help in keeping the food prices low’. The RBI lowered the consumer price inflation (CPI) forecast to 6.5 per cent for the current fiscal from 6.7 per cent. India's retail inflation in January was 6.52 per cent.

On India's rising trade deficit with China, he suggested that New Delhi should re-engage with Beijing on finding greater market opportunities and access in the Chinese market. He highlighted that ‘There are several products which India can export more to China. That will require a considered re-engagement’. According to Kumar, it would be feasible for India to restrict imports from China because most imported products are quite essential imports.

The CNX Nifty ended at 17,844.60, down by 99.60 points or 0.56% after trading in a range of 17,818.40 and 18,004.35. There were 19 stocks advancing against 31 stocks declining on the index. (Provisional)

The top gainers on Nifty were Divi's Lab up by 2.50%, Ultratech Cement up by 1.77%, Tech Mahindra up by 1.33%, Hindalco up by 1.11% and Power Grid Corp up by 0.94%. On the flip side, Cipla down by 6.02%, Adani Enterprises down by 5.88%, Britannia down by 1.75%, BPCL down by 1.67% and UPL down by 1.58% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 0.77 points or 0.01% to 8,003.59, France’s CAC fell 13.83 points or 0.19% to 7,333.89 and Germany’s DAX was down by 18.93 points or 0.12% to 15,463.07.

Asian markets settled mostly higher on Monday ahead of minutes from the US Federal Open Market Committee this week. Markets were gained in spite of worries of rising geopolitical tensions, hawkish comments from US Fed officials, and expectations that the US Fed will keep raising interest rates for longer than anticipated to tame inflation. Chinese shares jumped after the country's central bank left its 1-year and 5-year prime loan rates unchanged, widely in line with expectations, as the Chinese economy showed more signs of recovery following its Covid reopening. Japanese shares rose marginally as Japanese government bond yields ticked higher following spikes in US Treasury yields last week, while investors are awaiting testimony by the incoming Bank of Japan leadership team.