Bears pull markets to end near intraday lows on Monday

A tight grip of bears over the Dalal Street pulled Indian equity benchmarks to end near their intraday low points, amid worries that the U.S. Fed would keep interest rates higher for longer while rising concerns after North Korea fired more ballistic missiles. After a cautious start of the day, markets managed to keep their heads above water during morning deals, as traders took support with Federation of Indian Export Organisations’ (FIEO) statement that India's exports are expected to grow by 3-5 per cent to $435-445 billion in this fiscal.

However, in noon deals, indices turned negative & witnessed a sharp fall, amid weak cues from European markets along with heavy selling at oil & gas and banking counters. Sentiments got hit, amid a private report stating that India’s economic activity cooled off at the start of the year as higher borrowing costs tempered demand at home and abroad, signaling more pain ahead as the global economy slows down. Besides, traders took note of a report that the Reserve Bank of India (RBI) has predicted that 2023 would probably be characterised by a milder global slowdown than anticipated earlier, but added that the trajectory remains unpredictable.

On the global front, European markets were trading mostly in red, while Asian markets settled mostly higher, even after China left its benchmark lending rates unchanged, as widely expected, despite the economy struggling to gain traction. The People's Bank of China retained its one-year loan prime rate, or LPR, at 3.65 percent. Likewise, the five-year LPR, the benchmark for mortgage rates, was kept unchanged at 4.30 percent. Previously, the bank had reduced the five-year LPR rate by 15 basis points each in May and August 2022, and by 5 basis points in January 2022.

Back home, auto stocks remained in focus as in a bid to give a boost to semiconductor manufacturing in the country, Union Minister for Electronics and Information Technology, Ashwini Vaishnaw announced that the government will come up with a program very soon to put the country on a good semiconductor journey for the next 10 years. Meanwhile, the central government during 49th GST Council meeting has decided to clear the entire pending balance GST compensation of Rs 16,982 crore for June 2022.

Finally, the BSE Sensex fell 311.03 points or 0.51% to 60,607.02 and the CNX Nifty was down by 99.60 points or 0.56% to 17,844.60.

The BSE Sensex touched high and low of 61,290.19 and 60,607.02, respectively. There were 12 stocks advancing against 18 stocks declining on the index.

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

The few gaining sectoral indices on the BSE were IT up by 0.51%, TECK up by 0.32% and Auto 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 down by 0.72% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.75%, Tech Mahindra up by 1.35%, Power Grid up by 0.91%, Tata Motors up by 0.67% and Infosys up by 0.62%. On the flip side, HDFC down by 1.33%, Maruti Suzuki down by 1.33%, Kotak Mahindra Bank down by 1.26%, ICICI Bank down by 1.18% and SBI down by 1.09% were the top losers.

Meanwhile, 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.

Singh further said ‘the per capita income has also doubled under the present government from last eight years with manifold increase in exports in almost every sector be that the mobile chip technology, defence, toy industry etc. with IMF rating saying that the world is looking at India as the bright spot giving self-esteem to all of us’.

Besides, Singh noted that the pro-business reforms unleashed by Prime Minister Narendra Modi led government in the last nine years is laying a strong foundation of New India, opening up new vistas for the business community, improving India’s rank in ease of doing business from 142 in 2014 to 63 in 2022, as per World Bank report.

The CNX Nifty traded in a range of 18,004.35 and 17,818.40. There were 19 stocks advancing against 31 stocks declining on the index.

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 Insurance down by 2.08% and HDFC Life Insurance down by 2.01% were the top losers.

European markets were trading mostly in red; UK’s FTSE 100 decreased 0.18 points or 0% to 8,004.18 and France’s CAC fell 6.98 points or 0.09% to 7,340.74, while Germany’s DAX gained 4.84 points or 0.03% to 15,486.84.

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.