Post Session: Quick Review

Bulls did not convince to continue northward journey on Thursday and once again bourses resumed southward ride ahead of weekly F&O expiry. After yesterday’s rally, markets participants sold-off riskier shares in Thursday’s session. Traders booked their profits, as further interest rate hikes keep investors nervous. There was cautiousness in the markets as US Bond yields extended their February gains, with the benchmark 10-year yield briefly topping 4% for the first time since November. The 1-year Treasury yield rose above 5%. Investors’ confidence took a hit after Fed official -- Raphael Bostic said “The U.S. central bank needs to lift the federal funds rate to between 5 percent and 5.25 percent and keep there 'well into 2024' in order to bring inflation under control”. Cautious leads came from overnight trade at Wall Street also dented Indian markets’ sentiments, following the release of a report from the Institute for Supply Management on U.S. manufacturing activity in the month of February. While the ISM said its manufacturing PMI inched up to 47.7 in February from 47.4 in January, a reading below 50 still indicates a contraction.

Domestic equity Markets started day on negative note on the back of heavy selling pressures in IT and Banking counters. Further, indices added more losses, as sentiments remained down-beat with Chief Economic Advisor V Anantha Nageswaran’s statement that the performance of the manufacturing sector and growth rate in private consumption expenditure in the December quarter of 2022-23 is appearing ‘depressed’ because of higher base. In late afternoon session, markets touched their day’s low levels amid concerns about growth and the outlook for interest rates.

On the global front, European markets were trading lower with investors focusing on the release of preliminary euro zone inflation data for February. Asian markets ended mixed, as signs of rising inflationary pressures in the U.S. and hawkish comments from Federal Reserve officials cemented investor worries over further interest-rate hikes. Back home, Indian technology industry remained in focused after Nasscom president Debjani Ghosh has said that the Indian technology industry is set to grow by 8.4 per cent in FY23 to become a $245 billion sector. She said the sector had revenues of $226 billion in FY22. She added that the cross currency headwinds have shaved off over 2 per cent of the revenue growth.

The BSE Sensex ended at 58,909.35, down by 501.73 points or 0.84% after trading in a range of 58,866.26 and 59,423.79. There were 5 stocks advancing against 25 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index declined 0.13%, while Small cap index was down by 0.22%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.09%, Utilities up by 0.78%, Oil & Gas up by 0.26%, Power up by 0.24% and Energy was up by 0.22%, while TECK down by 1.33%, IT down by 1.24%, Bankex down by 0.87%, Auto down by 0.85% and Consumer Durables was down by 0.59% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Power Grid up by 0.62%, Sun Pharma up by 0.55%, HCL Tech up by 0.53%, Larsen & Toubro up by 0.28% and Ultratech Cement up by 0.11%. On the flip side, Maruti Suzuki down by 2.78%, Axis Bank down by 2.46%, TCS down by 1.80%, Nestle down by 1.70% and Infosys down by 1.62% were the top losers. (Provisional)

Meanwhile, a day after October-December quarter gross domestic product (GDP) growth estimates came in lower than market expectations, Chief Economic Advisor (CEA) V Anantha Nageswaran has said the performance of the manufacturing sector and growth rate in private consumption expenditure in the December quarter of 2022-23 is appearing ‘depressed’ because of higher base. According to Nageswaran, the GDP growth base was inflated due to data revision for the past three years.

The National Statistical Office (NSO) has revised GDP growth data for the past three years - 2019-20, 2020-21 and 2021-22 and also released the second advance estimates of GDP for 2022-23. While the growth rate for 2021-22 has been revised up by 40 basis points to 9.1 per cent, from 8.7 per cent, the GDP for 2020-21 (Covid impacted year) too has been revised upwards to (-) 5.8 per cent, from (-) 6.6 per cent. For 2019-20 also, the growth has been revised upwards to 3.9 per cent, from 3.7 per cent. However, the second advance estimates for 2022-23 real GDP growth was retained at 7 per cent - as was projected in first advance estimates in January.

The data showed that the manufacturing sector contracted by 1.1 per cent in the October-December quarter, and private consumption expenditure slowed to 2.1 per cent. According to him, but for the revision in data, which resulted in a higher base, the manufacturing sector would have shown an increase of 3.8 per cent year-on-year and private consumption expenditure would have grown 6 per cent in the October-December quarter. He said ‘so, really one is comparing apples to oranges. When one set of data is revised to take into account underlying data revisions, larger samples, etc., and the other is not, it is not a like-for-like comparison’.

With regard to manufacturing gross value added (GVA), he said it would have grown by 5.1 per cent in 2022-23 fiscal based on Second Advance Estimates without revised data. However, it will grow by 0.6 per cent in 2022-23 after revision. That is a revision of 4.5 percentage points. Similarly, manufacturing GVA would have grown by 3.8 per cent YoY in Q3 FY23 without revised data. However, he said it has contracted by 1.1 per cent YoY in Q3 FY23 after this revision. That is a change of 4.9 percentage points.

The CNX Nifty ended at 17,321.90, down by 129.00 points or 0.74% after trading in a range of 17,306.00 and 17,445.80. There were 15 stocks advancing against 35 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Ports up by 3.45%, Adani Enterprises up by 2.75%, Coal India up by 1.87%, BPCL up by 1.63% and Hero MotoCorp up by 1.33%. On the flip side, Maruti Suzuki down by 2.46%, Axis Bank down by 2.28%, TCS down by 1.90%, Mahindra & Mahindra down by 1.62% and SBI Life down by 1.61% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 20.66 points or 0.26% to 7,894.27, France’s CAC fell 28.74 points or 0.4% to 7,205.51 and Germany’s DAX was down by 74.03 points or 0.48% to 15,230.99.

Asian markets ended mixed on Thursday, tracking an overnight mostly fall in Wall Street following hawkish comments from the Federal Reserve officials on further interest-rate hikes in the United States. Minneapolis Fed President Neel Kashkari said he is open-minded on either a 25-basis point or a 50-basis point interest rate hike in March, while Atlanta Fed President Raphael Bostic said monetary policy will have to remain tight until well into 2024. Chinese and Hong Kong shares declined, despite unexpectedly upbeat readings from China PMI surveys. Japanese shares finished down, despite fading expectations of an imminent hawkish turn by the Japanese central bank.