Post Session: Quick Review

The last trading session of the week was a little volatile for Indian equity benchmarks, however Sensex and Nifty managed to end higher. After a positive start, indices traded in green for the most part of the session, amid foreign fund inflows. The provisional data from the NSE showed foreign institutional investors (FIIs) bought shares worth Rs 1,513.41 crore on January 4.  Sentiments got some support as India's services sector ended 2023 on a firm footing, with activity expanding at its fastest pace in three months in December on buoyant demand and an optimistic year-ahead outlook. The HSBC India Services Purchasing Managers' Index, compiled by S&P Global, rose sharply in December to 59.0 from November's one-year low of 56.9. 

In the second half, markets cut gains and traded below their neutral lines, on the back of negative cues from European markets along with selling at Healthcare and Basic Materials counters. Traders got cautious as Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh said that India will have to eventually move to a lower customs duty regime and cannot continue to protect domestic manufacturers by citing infant industry argument. However, soon indices staged recovery to end higher as traders got some encouragement after the United Nations said India is projected to grow at 6.2 per cent in 2024, supported by robust domestic demand and strong growth in the manufacturing and services sectors. 

On the global front, European markets were trading lower, after the euro area private sector contracted for the seventh straight month in December with the largest economies becoming the biggest drags. The final survey results from the purchasing managers' survey by S&P Global showed that the final HCOB composite output index held steady at 47.6 in December. The flash reading was 47.0. A PMI score below 50.0 indicates contraction. Asian markets ended mostly lower on Friday as traders remained cautious amid renewed uncertainty about the outlook for interest rates following the release of the minutes of the US Fed's latest monetary policy meeting earlier in the week. 

Back home, the pharmaceutical industry related stocks remained in watch as rating agency Icra said revenue of 25 leading domestic pharmaceutical companies is expected to grow 9-11 per cent in the current fiscal year. The projected revenue growth in 2023-24 will be primarily supported by 11-13 per cent expansion in the US market and 7-9 per cent growth in the domestic market, while revenues from the European market and emerging markets are expected to rise 11-13 per cent and 13-15 per cent, respectively.

The BSE Sensex ended at 72026.15, up by 178.58 points or 0.25% after trading in a range of 71779.83 and 72156.48. There were 15 stocks advancing against 15 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.19%, while Small cap index was up by 0.61%. (Provisional)

The top gaining sectoral indices on the BSE were IT up by 1.29%, Capital Goods up by 1.27%, TECK up by 1.03%, Industrials up by 0.97% and Telecom up by 0.59%, while Basic Materials down by 0.43%, Healthcare down by 0.29%, Consumer Durables down by 0.24%, Metal down by 0.16% and Utilities down by 0.11% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Larsen & Toubro up by 2.54%, TCS up by 1.99%, Infosys up by 1.26%, HCL Tech. up by 1.13% and Hindustan Unilever up by 1.07%. On the flip side, Nestle down by 1.64%, Asian Paints down by 1.09%, JSW Steel down by 1.06%, Kotak Mahindra Bank down by 1.04% and Sun Pharma down by 0.78% were the top losers. (Provisional)

Meanwhile, the government is likely to review the progress of the Production-Linked Incentive Scheme (PLI) for all 14 sectors at the meeting to be held on January 12. It said some PLI sectors are doing very well, others are in gestation period, and there are some which are lagging a bit, it expects to see a take-off very soon. The meeting assumes significance as the government has disbursed Rs 2,900 crore till March 2023 under the scheme. The empowered committee in PLI has also approved Rs 1,000 crore disbursement to beneficiary firms of the electronics sector.

The scheme was announced in 2021 for 14 sectors such as telecommunication, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high efficiency solar PV modules, advanced chemistry cell battery, drones, and pharma with an outlay of Rs 1.97 lakh crore. The purpose of the schemes is to attract investments in key sectors and cutting-edge technology; ensure efficiency and bring economies of size and scale in the manufacturing sector and make Indian companies and manufacturers globally competitive.

The schemes have attracted over Rs 95,000 crore in investment till September 2023. According to the Commerce and Industry Ministry, 746 applications have been approved till November 2023 under these schemes. As per the ministry, of the $101 billion of total electronics production in 2022-23, smartphones constituted $44 billion. 

About PLI in white goods (AC and LED light components), the ministry has said that 64 companies have been selected under the scheme. Of this, 34 would invest Rs 5,429 crore for air-conditioner components and 30 would invest Rs 1,337 crore for LED component manufacturing. Further investments of Rs 6,766 crore are envisaged creating additional direct employment of about 48,000 persons and that 13 foreign companies are investing Rs 2,090 crore under the scheme.

The CNX Nifty ended at 21710.80, up by 52.20 points or 0.24% after trading in a range of 21629.20 and 21749.60. There were 25 stocks advancing against 25 stocks declining on the index. (Provisional)

The top gainers on Nifty were Adani Ports & SEZ up by 2.76%, TCS up by 1.94%, Larsen & Toubro up by 1.83%, SBI Life Insurance up by 1.58% and LTIMindtree up by 1.39%. On the flip side, Nestle down by 1.67%, Britannia down by 1.66%, UPL down by 1.09%, Sun Pharma down by 0.97% and JSW Steel down by 0.92% were the top losers. (Provisional)

European markets were trading lower; UK’s FTSE 100 fell 70.8 points or 0.92% to 7,652.27, France’s CAC fell 86.62 points or 1.16% to 7,364.01 and Germany’s DAX lost 139.07 points or 0.84% to 16,478.22. 

Asian markets ended mostly lower on Friday ahead of key US payrolls data due out later in the day. Market sentiments weakened further by tracking Wall Street’s fall overnight as strong labor market data fueled uncertainty about early interest rate cuts by the Federal Reserve. Meanwhile, Chinese and Hong Kong shares leading regional losses on persistent concerns over economic recovery, while four Chinese bad debt managers were downgraded by Fitch Ratings in line with concerns over their financial situation and hopes of reduced government support. Although, Japanese shares gained as a weaker yen boosted exporters.