Benchmarks snap two-day losing streak on Monday

27 Mar 2023 Evaluate

Indian equity benchmarks snapped a two-day losing streak to end higher in a volatile trade on Monday as global authorities took steps to contain the banking turmoil, helping dispel some of the contagion fears.  After a firm start, the markets extended gains as the day progressed, as traders took encouragement with Prime Minister Narendra Modi’s statement that India will emerge as a ‘developed’ nation by 2047 with efforts of every single individual. He said the dream will turn into a reality with the hard work of every single individual of the country and the government is encouraging collective efforts. Also, foreign fund inflows aided domestic sentiments. Foreign investors have pumped Rs 7,200 crore into the Indian equities so far this month, mainly driven by bulk investment in the Adani Group companies by the US-based GQG Partners.

Sentiments remained positive in afternoon deals, as S&P Global Ratings kept its forecast for India's economic growth unchanged at 6 per cent in the fiscal year starting April 1, before rising to 6.9 per cent in the following year. In the quarterly economic update for Asia-Pacific, S&P saw inflation rate easing to 5 per cent in 2023-24 fiscal, from 6.8 per cent in the current financial year.  Some support also came with the Reserve Bank stating that India’s forex kitty rose by $12.798 billion to $572.801 billion in the week ended March 17. In the previous reporting week, the reserves had dropped by $2.39 billion to a three-month low of $560.003 billion. However, the fag-end selling dragged the markets off day’s high points. Traders also turned cautious as the government proposed hiking the securities transaction tax on Futures & Options (F&O) contracts, a move that will increase the trading costs in the derivatives segment as well as help in curbing excessive trades.

On the global front, European markets were trading higher as investor sentiment improved after authorities and regulators gave assurances that the broader financial system is sound. Asian markets settled mostly lower on Monday as banking worries swirled and China industrial profits data disappointed. A cautious undertone prevailed after Deutsche Bank shares fell heavily on Friday on the lender's surging cost of default cover.

Finally, the BSE Sensex rose 126.76 points or 0.22% to 57,653.86 and the CNX Nifty was up by 40.65 points or 0.24% to 16,985.70.

The BSE Sensex touched high and low of 58,019.55 and 57,415.02, respectively. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.37%, while Small cap index was down by 1.50%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.73%, Metal up by 0.19%, FMCG up by 0.10%, TECK up by 0.08% and Bankex up by 0.05%, while Utilities down by 2.48%, Power down by 2.13%, Telecom down by 1.18%, Realty down by 1.17% and Industrials down by 0.93% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.54%, Sun Pharma up by 1.15%, SBI up by 0.87%, Kotak Mahindra Bank up by 0.80% and UltraTech Cement up by 0.68%. On the flip side, Mahindra & Mahindra down by 1.06%, Tata Motors down by 1.06%, Power Grid Corporation down by 1.06%, Bajaj Finance down by 1.02%, and Axis Bank down by 0.90% were the top losers.

Meanwhile, Union road, transport and highway minister Nitin Gadkari has said that if India can use recently discovered reserve of lithium in Jammu and Kashmir, it will become number one automobile manufacturing country in the world.  He said ‘Every year, we import 1,200 tonnes of lithium.’

He mentioned ‘Now, in Jammu and Kashmir, we got lithium. (If) we can use this lithium ion, we will be the number one automobile manufacturing country in the world.’ The estimated 5.9-million tonne reserve of lithium, a crucial mineral for the manufacturing of electric vehicles and solar panels, had been discovered in Reasi district by the Geological Survey of India (GSI).

He said there is a need to encourage public transport, and electric buses are the future. India has beaten Japan to become the third largest vehicle market in 2022 after China and the USA. According to Gadkari, presently India's automobile industry is worth Rs 7.5 lakh crore, and the sector's contribution to the overall GST revenue is maximum.

The CNX Nifty traded in a range of 17,091.00 and 16,918.55. There were 27 stocks advancing against 22 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Grasim Industries up by 186%, Reliance Industries up by 1.61%, Cipla up by 1.40%, Divi's Laboratories up by 0.93% and Maruti Suzuki up by 0.87%. On the flip side, Adani Ports & SEZ down by 1.75%, SBI Life Insurance down by 1.15%, Power Grid Corp down by 1.12%, Adani Enterprises down by 1.11% and Mahindra & Mahindra down by 1.03% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 70.98 points or 0.96% to 7,476.43, France’s CAC rose 85.52 points or 1.22% to 7,100.62 and Germany’s DAX gained 212.51 points or 1.42% to 15,169.74.

Asian markets settled mostly lower on Monday amid ongoing concerns over the health of the global financial system after the head of the International Monetary Fund warned that the global economy faces risks to its financial stability. But, three regional US Federal bank presidents said that the banking system was not facing a liquidity crisis. Chinese shares declined after data showed China's industrial profits dropped in the first two months of 2023 from the year before, despite China is showing signs of robust economic recovery. However, Japanese shares gained by tracking Wall Street gains last Friday, while a weaker yen also boosting sentiment in the exporter-heavy market.

Asian Indices

Last Trade            

Change in Points

Change in %  

Shanghai Composite

3,251.40-14.25-0.44

Hang Seng

19,567.69-347.99-1.78

Jakarta Composite

6,708.93-53.32-0.79

KLSE Composite

1,396.60

-3.10-0.22

Nikkei 225

27,476.8791.620.33

Straits Times

3,239.0326.390.81

KOSPI Composite

2,409.22

-5.74-0.24

Taiwan Weighted

15,830.31-84.39-0.53


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