Post Session: Quick Review

It turned out to be an extremely volatile session for Indian markets after yesterday’s decline as investors responded to the FOMC minutes showing members are committed to fighting inflation with additional rate hikes. Markets swung between green and red territory during the day as investors maintained risk-averse approach ahead of monthly F&O expiry. Traders were looking forward to final European inflation and U.S. growth figures which are scheduled to be released later in the day. The Indian share markets received mixed signals from Asian markets, mirroring a mixed handover from Wall Street after the release of FOMC minutes of its last policy review. Overall trading was somewhat subdued amid minutes pointing to more rate hikes ahead. Indices showed a lack of direction over the course of the trading day on Thursday.

Initially, markets made cautious start and further witnessed volatile trade, as domestic traders were concerned after Department for Promotion of Industry and Internal Trade in its latest data has showed that foreign direct investment (FDI) into India declined by 15 per cent to $36.75 billion during the April-December period of this fiscal year 2022-23 (FY23), as compared to the FDI inflows of $43.17 billion during the corresponding period of the previous year. Besides, traders worried as the Fed and other central banks might be willing to push the global economy into recession to extinguish inflation that has stuck near multi-decade highs despite sharp rate hikes over the past year. In last leg of trade, markets added losses and ended with cut of around quarter a percent, as traders were cautious, amid according to the minutes of the meeting, majority of members of the high-powered Monetary Policy Committee (MPC) of the Reserve Bank were concerned about heightened inflation even as two panellists raised objections against an increase in the benchmark interest rate.  

On the global front, European markets were trading mostly in green after two straight sessions of declines, as U.S. semiconductor designer Nvidia's positive sales forecast sparked a rally in chip stocks. Asian markets ended mostly lower after minutes from a Federal Reserve policy meeting indicated interest rates will likely keep rising longer than previously feared. Back home, the coal ministry has said that 27 coal mines would be put on sale in the next round of commercial mines auction starting from February 27, 2023. The auction process for 141 coal and lignite mines was launched by the coal ministry in November last year.

 The BSE Sensex ended at 59,605.80, down by 139.18 points or 0.23% after trading in a range of 59,406.31 and 59,960.04. There were 13 stocks advancing against 17 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index declined 0.40%, while Small cap index was up by 0.06%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 0.71%, PSU up by 0.34%, FMCG up by 0.25%, Bankex up by 0.20% and Auto was up by 0.12%, while Realty down by 1.60%, Utilities down by 1.29%, Power down by 1.19%, Consumer Durables down by 0.95% and Capital Goods was down by 0.84% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 1.72%, SBI up by 1.35%, Tata Motors up by 1.28%, Tata Steel up by 0.94% and ITC up by 0.87%. On the flip side, Asian Paints down by 3.18%, Larsen & Toubro down by 1.62%, Titan Company down by 1.34%, Indusind Bank down by 1.30% and Bharti Airtel down by 0.98% were the top losers. (Provisional)

Meanwhile, the Reserve Bank of India’s (RBI’s) rate setting monetary policy committee (MPC) in its minutes has said though global growth outlook has improved in recent months, it is expected to decelerate during 2023. MPC, on February 8, had raised the repo rate by 25 basis points to 6.50 per cent with immediate effect. The six-member panel decided to hike the repo rate by a mandate of four in favour (including RBI Governor Shaktikanta Das) while two were against it.

According to the minutes of the MPC meeting, it was felt that the outlook on global growth has improved in recent months, despite the persistence of geopolitical hostilities and the impact of monetary policy tightening by central banks across the world. Inflation globally is exhibiting some softening from elevated levels, prompting central banks to moderate the size and pace of rate actions, the members felt.

However, it said central banks are reiterating their commitment to bring down inflation close to their targets. Bond yields remain volatile. The US dollar has come off its recent peak, and equity markets have moved higher since the last MPC meeting. Besides, it noted weak external demand in major advanced economies (AEs), the rising incidence of protectionist policies, volatile capital flows and debt distress could, however, weigh adversely on prospects for emerging market economies (EMEs). On the domestic economy, it noted that demand has been sustained by strong discretionary spending.

The CNX Nifty ended at 17,511.25, down by 43.05 points or 0.25% after trading in a range of 17,455.40 and 17,620.05. There were 22 stocks advancing against 28 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 1.57%, Coal India up by 1.44%, Axis Bank up by 1.32%, ITC up by 0.98% and SBI up by 0.90%. On the flip side, Asian Paints down by 3.22%, Divi's Lab down by 1.62%, Larsen & Toubro down by 1.62%, Adani Enterprises down by 1.58% and Indusind Bank down by 1.57% were the top losers. (Provisional)

European markets were trading mostly in green, France’s CAC rose 18.51 points or 0.25% to 7,317.77 and Germany’s DAX was up by 54.08 points or 0.35% to 15,453.97. On the flip side, UK’s FTSE 100 was down by 30.68 points or 0.39% to 7,899.95.

Asian markets settled mostly lower on Thursday after the release of the Federal Reserve's minutes from its last meeting with almost all Fed officials agreeing to hike interest rates to control inflation, while Japanese market was closed for the emperor’s birthday. However, Seoul stocks gained after South Korea's central bank, Bank of Korea kept its interest rates unchanged, in line with market expectations, and ending an uninterrupted one-year run of rises.