Markets close Thursday's volatile session in positive territory

Rising for the third consecutive day, Indian equity benchmarks closed Thursday's volatile session in the positive territory, led by gains in PSU, Oil & Gas and Utilities stocks amid a rebound in global peers. Markets made a positive start but soon turned volatile as traders were cautious with the provisional data from the NSE showing that foreign institutional investors (FIIs) net sold shares worth Rs 3,929.60 crore on February 14. Some concern also came as the Reserve Bank of India (RBI) Governor, Shaktikanta Das stated that there is no scope for any complacency and banks should continue to maintain their vigil around build-up of risks, if any. In the meeting with banks’ MDs & CEOs, Das highlighted the issues relating to Business Model viability; outlier growth in personal loans; adherence to co-lending guidelines; Bank exposure to NBFC sector; Liquidity Risk Management; IT and Cyber security preparedness, operational resilience, digital frauds; and strengthening of the internal rating framework.

However, markets managed to keep their heads above water in afternoon deals, as traders took support with the Reserve Bank of India (RBI) data stating that India’s services trade surplus shot up to a record $44.9 billion in the October-December quarter (third quarter, or Q3) of 2023-24 (FY24), growing 16 per cent year-on-year, showing resilience amid strong global headwinds. This is likely to reduce the current account deficit (CAD) in Q3. Markets added gains in late afternoon deals, taking support from a private report stating that India's merchandise trade deficit narrowed to $17.49 billion in January as exports edged up by 3.1 percent year-on-year despite the ongoing crisis in the Red Sea disrupting trade as commercial vessels traversing through the Suez Canal face attacks from Yemen-backed Houthi rebels. The merchandise trade deficit stood at $19.80 billion in December 2023. Meanwhile, Finance Minister Nirmala Sitharaman is scheduled to review the state of the economy amid global challenges at a meeting of the Financial Stability and Development Council (FSDC) on February 21. This would be the first meeting of the FSDC after the passage of the Rs 47.6 lakh crore Budget for 2024-25, focusing on capital expenditure with an outlay of Rs 11.11 lakh crore.

On the global front, European markets were trading mostly in green as investors digested a slew of upbeat earnings updates as well as comments by European Central Bank President Christine Lagarde that inflation in the euro zone is heading back towards target. Asian markets ended mostly higher on Thursday as calmer bond markets and robust U.S. corporate earnings lifted chip stocks. 

Finally, the BSE Sensex rose 227.55 points or 0.32% to 72,050.38 and the CNX Nifty was up by 70.70 points or 0.32% to 21,910.75.

The BSE Sensex touched high and low of 72,164.97 and 71,644.44 respectively. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.93%, while Small cap index was up by 1.24%.

The top gaining sectoral indices on the BSE were PSU up by 2.95%, Oil & Gas up by 2.61%, Utilities up by 2.59%, Energy up by 2.28% and Power up by 1.99%, while FMCG down by 0.89% and Healthcare down by 0.08% were the only losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 6.51%, NTPC up by 3.58%, Power Grid Corporation up by 2.79%, SBI up by 2.46% and HDFC Bank up by 2.15%. On the flip side, Axis Bank down by 2.11%, ITC down by 1.85%, Hindustan Unilever down by 1.58%, Nestle down by 1.32% and Sun Pharma down by 0.79% were the top losers.

Meanwhile, noting the resilience of the domestic financial system with healthy balance sheets of banks, the Reserve Bank of India (RBI) Governor, Shaktikanta Das has said that there is no scope for any complacency and banks should continue to maintain their vigil around build-up of risks, if any. He complimented the banks on their improved financial performance and that of the whole banking sector.

In the meeting with banks’ MDs & CEOs, Das highlighted the issues relating to Business Model viability; outlier growth in personal loans; adherence to co-lending guidelines; Bank exposure to NBFC sector; Liquidity Risk Management; IT and Cyber security preparedness, operational resilience, digital frauds; and strengthening of the internal rating framework. 

RBI Governor stressed that customer grievance redress mechanism and protection of customers’ interests are of paramount importance for the safety and stability of the financial system and that of individual financial institutions. The Governor also encouraged the banks to actively participate in RBI’s FinTech initiatives and give a further push to the Digital Banking Units (DBUs).

Meanwhile, RBI Governor held meetings with the MDs & CEOs of Public Sector Banks and select Private Sector Banks on February 14, 2024, in Mumbai. These engagements are part of Reserve Bank’s continuous interaction with the Senior Management of its Regulated/Supervised Entities. The previous such meeting was held on July 11, 2023.

The CNX Nifty traded in a range of 21,953.85 and 21,794.80. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 6.81%, Power Grid Corporation up by 4.57%, BPCL up by 4.38%, NTPC up by 3.92% and ONGC up by 2.83%. On the flip side, Axis Bank down by 2.01%, Apollo Hospital down by 1.84%, ITC down by 1.65%, Britannia Industries down by 1.31% and Hindustan Unilever down by 1.30% were the top losers.

European markets were trading mostly in green; France’s CAC rose 54.51 points or 0.71% to 7,731.86 and Germany’s DAX gained 102.86 points or 0.6% to 17,048.34, while UK’s FTSE 100 decreased 4.45 points or 0.06% to 7,563.95.

Asian markets ended mostly higher on Thursday tracking dovish comments from Chicago Fed President Austan Goolsbee. Fed's Goolsbee said on Wednesday that the policy-setting Federal Open Market Committee shouldn’t wait until PCE inflation is at the 2% goal for interest-rate cuts. Investors are now awaiting the release of US retail sales and initial jobless claims data due later in the day. Japanese shares rallied to its highest level in 34 years tracking Wall Street’s gains overnight, while weaker yen also boosted market sentiments. The timing of any policy tightening was further complicated by the release of data showing the Japanese economy slipping into a recession. Chinese market remained closed for the Lunar New Year holiday.