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Key gauges end volatile day on mixed note on Thursday
Feb-02-2023

Indian equity benchmarks exhibited mixed trends in highly volatile trade on Thursday as investors remained wary of the deep selloff in Adani Group stocks, despite an overall positive Budget 2023 tone. Markets made a negative start and were trading in red for most part of the day as traders got anxious with an analyst at Moody's Investors Service stating that the Indian federal government’s aim to achieve a fiscal deficit target of 4.5% of gross domestic product (GDP) by 2025/26 could see some risks. The current pattern suggests that perhaps there could be some upward pressure on expenditure especially if they (government) continue with this focus on capex. Traders also remained cautious with a private report stating that the country's fast-moving consumer goods (FMCG) industry witnessed a consumption slowdown in the December quarter, with an overall ''negative'' volume growth, as consumers continue to reel under inflationary pressure.

However, markets recovered in last hour of trade with Sensex ending more than 200 points higher and Nifty 50 ending flat. Traders found some solace with Commerce and Industry Minister Piyush Goyal’s statement that number of measures such as tweaks in customs duties on certain products announced in the Union Budget for 2023-24 will help boost the country's exports. Some support also came with Former Niti Aayog Vice Chairperson Arvind Panagariya’s statement that India is on the cusp of returning to a high growth trajectory and voiced confidence that the country will become the world’s third-largest economy by 2027-28. He said India is currently in a spot that it was in 2003 when the growth rate picked up to close to about 8 per cent and the country sustained that kind of rate for a few years.

On the global front, European markets were trading higher, while Asian markets settled mostly higher on Thursday as investors reacted to dovish comments from Federal Reserve Chair Jerome Powell and awaited interest-rate decisions from the European Central Bank and the Bank of England later in the day. Both central banks are expected to raise rates by 50 basis points and ECB President Lagarde's press conference will be the key driver for markets.

Back home, tyre industry’s stocks were in focus as Automotive Tyre Manufacturers Association (ATMA) has expressed concern over the hike in basic customs duty on compounded rubber announced in the Union Budget, saying the increase will lead to a rise in the cost of production and affect price competitiveness.  Banking sector related stocks were in watch as Finance Minister Nirmala Sitharaman proposed certain amendments to the Banking Regulation Act, the Banking Companies Act and the Reserve Bank of India Act to improve bank governance and enhance investors' protection.

Finally, the BSE Sensex rose 224.16 points or 0.38% to 59,932.24 and the CNX Nifty was down by 5.90 points or 0.03% to 17,610.40.

The BSE Sensex touched high and low of 60,007.67 and 59,215.62, respectively. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.21%, while Small cap index was up by 0.36%.

The top gaining sectoral indices on the BSE were FMCG up by 2.18%, IT up by 1.65%, TECK up by 1.60%, Industrials up by 0.60% and Bankex up by 0.45%, while Utilities down by 3.78%, Power down by 3.43%, Oil & Gas down by 2.05%, Energy down by 1.82% and Metal down by 0.88% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 4.74%, Indusind Bank up by 3.25%, Hindustan Unilever up by 2.46%, Infosys up by 2.18% and Wipro up by 1.63%. On the flip side, NTPC down by 1.97%, HDFC down by 1.85%, Titan Company down by 1.80%, Tata Steel down by 1.76% and Power Grid Corporation down by 1.75% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has said a number of measures such as tweaks in customs duties on certain products announced in the Union Budget for 2023-24 will help boost the country's exports. Goyal further said that despite global economic uncertainties, India's goods and services exports together are registering nearly 14-15 per cent growth.

He stated ‘The world is seeing recessionary conditions and global growth and global trade are also expected to slow down. Despite that when we combine our merchandise and service exports, we are still at quite a sweet spot...We believe that we will close this year also at a double-digit growth in goods and services combined.’

Moreover, he said that merchandise outbound shipments will be 'slightly less' as the whole world is overstocked, high inventories are there, and inflation has caused consumer demand to fall. He added ‘as the global economy recovers from these stresses, particularly of inflation, next year we hope to do better even in merchandise exports and the finance minister (Nirmala Sitharaman) has been generous with her budget allocations for the commerce and industry ministry. So I am quite confident that this will give a boost to our exports.’

The CNX Nifty traded in a range of 17,653.90 and 17,445.95. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Britannia Industries up by 4.94%, ITC up by 4.81%, Indusind Bank up by 3.66%, Hindustan Unilever up by 2.17% and Infosys up by 1.93%. On the flip side, Adani Enterprises down by 26.70%, Adani Ports & SEZ down by 7.20%, UPL down by 5.82%, HDFC Life Insurance down by 4.40% and Eicher Motors down by 2.67% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 48.34 points or 0.62% to 7,809.45, France’s CAC rose 42.75 points or 0.6% to 7,119.86 and Germany’s DAX gained 231.67 points or 1.53% to 15,412.41.

Asian markets settled mostly higher on Thursday tracking overnight rally in Wall Street after the US Fed raised rates by 25 bps, as widely expected. And at the same time, US Fed Chair Powell said disinflationary process has started but ongoing increases in rates will be needed to curb price pressures. Seoul shares rose, even as the south Korea consumer price index rose 5.2% in January on an annualised basis. Japanese shares gained, despite a stronger yen weighed on exporters. Chinese shares ended flat ahead of a slew of earnings from prominent firms in the coming weeks.

Asian Indices

Last Trade            

Change in Points

Change in %  

Shanghai Composite

3,285.670.750.02

Hang Seng

21,958.36-113.82-0.52

Jakarta Composite

6,890.5728.310.41

KLSE Composite

1,489.80

4.300.29

Nikkei 225

27,402.05

55.170.20

Straits Times

3,363.68-13.97-0.42

KOSPI Composite

2,468.88

19.080.77

Taiwan Weighted

15,595.16175.031.12
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