Key gauges end lower for seventh consecutive session

Indian equity benchmarks ended lower for a seventh consecutive session on Monday, owing to weakness in TECK, IT and Telecom stocks amid a bearish trend in global markets. Fresh foreign fund outflows also dented investor sentiments. Foreign Portfolio Investors (FPIs) offloaded shares worth Rs 1,470.34 crore on Friday, according to exchange data. Foreign investors have also turned cautious and pulled out Rs 2,313 crore from Indian equities so far this month. Benchmarks opened on a weak note and witnessed volatile trading action throughout the day, as traders were concerned with latest central bank data showing that the Reserve Bank of India’s (RBI’s) foreign exchange reserves declined by $5.7 billion to an 11-week low of $561.27 billion in the week ended February 17. Sentiments remained downbeat with RBI Monetary Policy Committee (MPC) member Jayanth R Varma’s statement that India's Gross domestic product (GDP) growth appears to be 'very fragile' and it may fall short of what the country needs to meet the aspirations of its growing workforce.

However, key gauges managed to cut most of their early losses in late afternoon deals, on the back of firm cues from European markets. Traders also found some solace with Union minister Piyush Goyal’s statement that the country would become the third largest economy in the world (from fifth position at present) in the next five years and by 2047 could be at the level the United States of America is at present. He added the 1.4 billion people of India are going to make the economy a $30-40 trillion one. But, markets failed to erase all the losses and ended lower as some pessimism remained among traders with a private report stating that India’s economic growth may show lower than 5 per cent print in the December quarter of fiscal year 2022-23 (FY23) on a normalising base even though many high frequency indicators signal a sequential improvement in performance. Besides, Finance Minister Nirmala Sitharaman highlighted rising debt vulnerabilities in many developing countries and sought views from G20 member nations on 'multilateral coordination' for managing the burden.

On the global front, European markets were trading higher, supported by gains across all major sectors, rebounding from its worst weekly performance this year on worries of higher-for-longer U.S. and eurozone interest rates. Asian markets settled down on Monday as hot inflation data from the United States stoked concerns the Federal Reserve may prolong its rate tightening cycle. An unexpected acceleration in January of the personal consumption expenditures price index, the Fed's favored inflation gauge, boosted Treasury yields and sent investors fleeing riskier assets.

Finally, the BSE Sensex fell 175.58 points or 0.30% to 59,288.35 and the CNX Nifty was down by 73.10 points or 0.42% to 17,392.70.

The BSE Sensex touched high and low of 59,441.13 and 58,937.64, respectively. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.69%, while Small cap index was down by 1.28%.

The few gaining sectoral indices on the BSE were Realty up by 2.18%, Bankex up by 1.07% and Financial Services up by 0.60%, while TECK down by 2.00%, IT down by 1.96%, Telecom down by 1.56%, Auto down by 1.51% and Metal down by 1.39% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 2.02%, ICICI Bank up by 1.99%, Kotak Mahindra Bank up by 1.69%, SBI up by 1.34% and HDFC up by 0.83%. On the flip side, Tata Steel down by 3.37%, Infosys down by 2.71%, Tata Motors down by 2.29%, TCS down by 2.01% and Mahindra & Mahindra down by 1.81% were the top losers.

Meanwhile, RBI Monetary Policy Committee (MPC) member Jayanth R Varma has said that India's Gross domestic product (GDP) growth appears to be 'very fragile' and it may fall short of what the country needs to meet the aspirations of its growing workforce.

Explaining further, Varma said rising EMI payments increases the pressure on household budgets and dampens spending, and exports are struggling in the face of global factors. While noting that high interest rates make private capital investment more difficult, he said the government is in fiscal consolidation mode, thus reducing the support to the economy from this source. He said ‘Because of all these factors, I fear that growth may fall short of what we need to meet the aspirations of our growing workforce given our demographic context and income level’.

Talking on high inflation, RBI MPC member said 2022-23 is a year of high inflation due to various supply shocks as well as the delay in monetary tightening during the second half of 2022-23. However, he expects inflation to come down significantly in 2023-24. He also anticipates a gradual glide path that brings inflation down close to the target.

The CNX Nifty traded in a range of 17,451.60 and 17,299.00. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 2.17%, Power Grid Corporation up by 2.16%, Kotak Mahindra Bank up by 1.80%, HDFC Life Insurance up by 1.58% and SBI up by 1.24%. On the flip side, Adani Enterprises down by 9.74%, Bajaj Auto down by 5.32%, UPL down by 4.10%, Tata Steel down by 2.96% and Infosys down by 2.58% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 67.83 points or 0.86% to 7,946.49, France’s CAC rose 113.66 points or 1.58% to 7,300.93 and Germany’s DAX gained 224.19 points or 1.47% to 15,433.93.

Asian markets settled down on Monday as hotter-than-expected US inflation data stoked concerns that the US Federal Reserve might raise interest rates further to curb inflation. Moreover, Wall Street's sell-off influenced Asian markets. Japanese shares declined as the Japanese Yen strengthened against the US dollar. Meanwhile, Incoming BoJ Governor Kazuo Ueda said he had ideas on how the central bank could exit its massive stimulus.