Bears hold grip over Dalal Street

Bears were holding a tight grip over the Dalal Street in late afternoon deals, with both Sensex and Nifty trading near their day's low points, on the back of negative cues from European markets along with heavy selling at Metal and IT counters. Sentiments remained negative, as India's manufacturing sector growth slowed in the month of December. According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) eased to 54.9 in December 2023 from 56.0 in November 2023. 

Adding more worries, Credit rating agency ICRA in its latest report has said that at the first weekly auction of the last quarter of 2023-24, the states saw their interest burden sharply rising to cross the 7.7 percentage mark on January 2, 2023, leading to the spread between the cut-off of 10-year state bonds and the G-sec yield crossing the 50 basis points mark for the first time in two years. 

On the global front, European markets were trading mostly in red, as the euro area manufacturing sector ended the year firmly in the contraction territory due to the sustained decline in new orders and output, strongly supporting the view that the region has entered a recession at the end of 2023. The final HCOB manufacturing Purchasing Managers' Index rose to 44.4 in December from 44.2 in November.

The BSE Sensex is currently trading at 71446.46, down by 446.02 points or 0.62% after trading in a range of 71396.39 and 71862.00. There were 11 stocks advancing against 18 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.24%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Utilities up by 1.95%, Power up by 1.57%, Oil & Gas up by 1.06%, Realty up by 0.88% and Healthcare up by 0.79%, while Metal down by 2.22%, IT down by 2.08%, TECK down by 1.62%, Basic Materials down by 0.53% and Auto down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.46%, ITC up by 1.46%, Bharti Airtel up by 1.11%, SBI up by 0.69% and Axis Bank up by 0.33%. On the flip side, JSW Steel down by 3.60%, Infosys down by 2.59%, Wipro down by 2.56%, Tech Mahindra down by 2.52% and Tata Steel down by 2.47% were the top losers.

Meanwhile, credit rating agency ICRA in its latest report has said that at the first weekly auction of the last quarter of 2023-24, the states saw their interest burden sharply rising to cross the 7.7 percentage mark on January 2, 2023, leading to the spread between the cut-off of 10-year state bonds and the G-sec yield crossing the 50 basis points mark for the first time in two years. At 53 basis points, the spread between the yield on the sovereign debt and that of the state bonds is the highest since January 2022.

According to the report, both coupons at 7.71 per cent and the spread jumped to record levels due to the concerns of large supply in the final quarter of the fiscal year. At the maiden auction of the fourth quarter, six states collectively raised Rs 16,000 crore through state government securities (SGS) which is 19 per cent on-year higher, and in line with the amount indicated for the week in the Q4 auction calendar. Taking a cue from the all-time high indicative borrowing of Rs 4.1 lakh crore in the final quarter of FY2024, the weighted average cut-off jumped increased by a sharp 8 bps to 7.71 per cent from 7.63 per cent last week, despite the decline in the weighted average tenor to 11 years from 15. 

Moreover, it said the spread between the cut-off of 10-year SGS and the 10-year G-sec (7.18 GS 2033) yield widened by 5 bps to touch 53 bps from 48 bps last week, which is the highest since January 2022. It added that the spike in the spread as well as the pricing was primarily because of the investors' concerns about larger supply in the quarter. The spread between the cut-off of 10-year SGS and G-sec yield crossed 50 bps, the highest since January 2022 on concerns of large supply. So far this fiscal the states have drawn down 31.7 per cent on-year more money from the market at Rs 6.2 lakh crore as against Rs 4.71 lakh crore in the same period last fiscal. 

The CNX Nifty is currently trading at 21535.60, down by 130.20 points or 0.60% after trading in a range of 21519.70 and 21677.00. There were 19 stocks advancing against 30 stocks declining, while 1 stock remained unchanged  on the index.

The top gainers on Nifty were Adani Enterprises up by 3.33%, Adani Ports & SEZ up by 2.12%, Cipla up by 1.55%, Indusind Bank up by 1.48% and ITC up by 1.42%. On the flip side, Hindalco down by 3.84%, JSW Steel down by 3.57%, LTIMindtree down by 2.78%, Hero MotoCorp down by 2.62% and Wipro down by 2.53% were the top losers.

European markets were trading mostly in red; France’s CAC fell 20.58 points or 0.27% to 7,510.28 and Germany’s DAX lost 7.61 points or 0.05% to 16,761.75, while UK’s FTSE 100 increased 10.87 points or 0.14% to 7,732.39.

Asian markets were trading mostly in red; Taiwan Weighted lost 294.45 points or 1.68% to 17,559.31, Hang Seng declined 142.14 points or 0.85% to 16,646.41, KOSPI dropped 62.50 points or 2.4% to 2,607.31, Jakarta Composite plunged 40.77 points or 0.56% to 7,282.82 and Straits Times fell 32.68 points or 1.02% to 3,197.27, while Shanghai Composite strengthened 4.97 points or 0.17% to 2,967.25