Post Session: Quick Review

Indian equity benchmarks ended in red on Thursday. The start of the trading day was on a negative note, as the International Monetary Fund (IMF) cut India's economic growth forecast to 9 per cent for the current fiscal year ending March 31, joining a host of agencies which have downgraded their projections on concerns over the impact of a spread of new variant of coronavirus on business activity and mobility. Continues selling in FIIs also weighed on the markets. As per provisional data available on the NSE, foreign institutional investors (FIIs) net sold shares worth Rs 7,094.48 crore on January 25.

Bears held a tight grip over the Dalal Street after Icra Ratings’ statement that the securitisation volumes in microfinance loans, which saw improvement in the first nine months of FY22, may witness some impact in the fourth quarter due to concerns over the third COVID-19 wave. Traders remained cautious, as India's rank improved one place to 85 among 180 countries in a corruption perception index (CPI) of 2021, according to a new report by Transparency International which, however, raised concern over the country's democratic status.

However, in the last hours of the trading session, markets staged some recovery, as traders got some relief  on report that Central Board of Direct Taxes (CBDT) has issued Rs 1.62 lakh crore income tax refunds to over 1.79 crore taxpayers till January 24, 2022 of the current financial year. Besides, Vedanta Chairman Anil Agarwal said that India is on the growth path with innovation and digitalisation and stressed that government policies have created tremendous resources available for deployment in the country.

On the global front, European markets were trading lower as January’s market turbulence continued after the Federal Reserve's hawkish comments regarding interest rate rises. Asian markets settled mostly lower, after manufacturing business conditions in South Korea deteriorated in January, the Bank of Korea said on Thursday as its Business Survey Index fell to a score of 90 in January from 95 in December. The outlook also came in at 90, down from 92 a month earlier.

The BSE Sensex ended at 57276.94, down by 581.21 points or 1.00% after trading in a range of 56439.36 and 57508.61. There were 9 stocks advancing against 21 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 1.25%, while Small cap index down by 0.82%. (Provisional)

The only gaining sectoral indices on the BSE were Bankex up by 0.97%, PSU up by 0.88% and Auto up by 0.43%, while IT down by 3.10%, TECK down by 2.75%, Consumer Durables down by 2.58%, Healthcare down by 1.80% and Realty down by 1.70% were the top losing indices on BSE.  (Provisional)

The top gainers on the Sensex were Axis Bank up by 2.81%, SBI up by 2.75%, Maruti Suzuki up by 2.52%, Kotak Mahindra Bank up by 2.02% and Sun Pharma up by 0.64%. On the flip side, HCL Tech. down by 4.17%, Tech Mahindra down by 3.66%, Dr. Reddy's Lab down by 3.42%, Wipro down by 3.22% and TCS down by 3.18% were the top losers. (Provisional)

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has showed the 3% sequential decrease in the domestic auto sales volumes (excluding CVs) in December 2021 was due to a continued poor demand for entry-level 2Ws, deferral in re-opening of colleges & offices, increased cost of ownership and production constraints in the premium segment 2W (>150cc) and PVs amid the semi-conductor shortage. On a yoy basis, the overall production and domestic sales volumes fell 14% and 11% respectively, while exports remained stable in December 2021.

According to the report, while there was a sequential recovery at 2% mom in domestic PV sales, they fell 13% yoy in December 2021. The sequential growth was supported by a 12% mom increase in passenger car sales, owing to a high consumer demand, but was offset by a 8% mom decrease in utility vehicles (UVs) sales. The sales growth in PVs remains constrained by lower production owing to the chip shortages, even as demand remains robust as evident in the lower dealership inventory. On a yoy basis, domestic PV demand continued its shift towards UVs, as the segment’s sales grew by 3% yoy as against a 13% yoy decrease in the overall domestic PV segment sales.

The report further said that 2Ws sales fell 11% yoy and 4% mom in December 2021. The sequential drop was owing to a 20% and 22% mom decrease in scooter and moped sales, respectively, while supported by a 4% mom increase in motorcycle sales. The recovery in 2Ws continued to be affected by the muted demand for entry-level 2Ws, especially due to a slow recovery of the rural market after COVID-19, the deferral in opening of colleges/offices and increased cost of ownership.

The CNX Nifty ended at 17110.15, down by 167.80 points or 0.97% after trading in a range of 16866.75 and 17182.50. There were 15 stocks advancing against 35 stocks declining on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 2.88%, SBI up by 2.78%, Maruti Suzuki up by 2.53%, Cipla up by 2.42% and Kotak Mahindra Bank up by 1.87%. On the flip side, HCL Tech. down by 4.09%, Tech Mahindra down by 3.67%, Dr. Reddy's Lab down by 3.33%, TCS down by 3.20% and Wipro down by 3.19% were the top losers. (Provisional)

European markets were trading lower, UK’s FTSE 100 decreased 21.26 points or 0.28% to 7,448.52, France’s CAC decreased 73.69 points or 1.06% to 6,908.27 and Germany’s DAX was down by 247.80 points or 1.6% to 15,211.59.

Asian markets settled mostly lower on Thursday tracking overnight losses in Wall Street after the US Federal Reserve signalled interest rates hikes as early as March and end its bond purchases that month to counter escalating inflation. Escalating Russia-Ukraine political tensions also dampened investors' sentiments. Chinese shares hit their lowest levels in nearly 16 months because the Fed's hawkish stance sparked heavy selling by foreign investors. Further, Seoul shares declined after Central bank data showed that sentiment among South Korean businesses over the economic situation worsened in January, due to higher logistics cost and weaker demand in the construction and electronic sectors.


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