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Benchmarks end lower on Monday
Feb-06-2023

Indian equity benchmarks ended lower on Monday due to intense selling pressure in Metal, Utilities and power stocks. Besides, a sharp decline in the rupee against the US dollar also put pressure on domestic equities. Markets made a cautious start and stayed in red throughout the day as traders were concerned as foreign investors pulled out Rs 28,852 crore from Indian equities in January, making it the worst outflow in the last seven months, primarily due to attractiveness of the Chinese markets. Some anxiety also came as the government hiked windfall profit tax levied on domestically-produced crude oil as well as on the export of diesel and ATF, in line with firming international oil prices. The levy on crude oil produced by companies such as Oil and Natural Gas Corporation (ONGC) has been increased to Rs 5,050 per tonne from Rs 1,900 per tonne.

Key indices continued to show a sluggish trend in late afternoon session as market participants avoided taking any long positions ahead of a three-day policy meeting of the Reserve Bank of India’s (RBI's) monetary policy committee. The Indian central bank is likely to raise rates by 25 basis points despite signs of softening retail inflation. Traders overlooked latest data released by the central bank showing that the Reserve Bank of India’s foreign exchange reserves rose $3 billion to $576.76 billion in the week ended January 27. The current level of reserves is the highest since the week ended July 8, 2022. Traders took a note of the Reserve Bank’s statement that India's banking sector is resilient and stable, and the central bank maintains constant vigil on the lenders, amid concerns over banks' exposure to the embattled Adani Group.

On the global front, Asian markets ended mostly in red, while European markets were trading lower as robust U.S. jobs data released on Friday fanned fears of more interest rate hikes to slow economic activity and cool inflation. According to the Federal Reserve, a strong labor market would lead to excessive wage growth which, in turn, would lead to inflation pressures. Increased tensions between the U.S. and China also weighed after the U.S. military on Saturday shot down a suspected Chinese spy balloon off the Carolina coast.

Back home, automobile industry stocks were in focus as the Minister of State in the Union Ministry of Commerce and Industry, Anupriya Patel said the Vehicle exports have witnessed an impressive growth during 2021-22. Coal industry stocks were in watch as the coal ministry data showed that the country's coal production increased by 12.94 per cent to 89.96 million tonnes in January 2023. The country's coal output stood at 79.65 million tonnes (MT) in the corresponding month of the previous fiscal.

Finally, the BSE Sensex fell 334.98 points or 0.55% to 60,506.90 and the CNX Nifty was down by 89.45 points or 0.50% to 17,764.60.

The BSE Sensex touched high and low of 60,847.21 and 60,345.61, respectively. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.75%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Telecom up by 3.42%, Realty up by 0.61%, PSU up by 0.52%, FMCG up by 0.50% and Capital Goods up by 0.46%, while Metal down by 2.03%, Utilities down by 1.26%, Power down by 1.01%, IT down by 0.67% and TECK down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.58%, Bajaj Finance up by 1.56%, Power Grid Corporation up by 1.05%, ITC up by 0.74% and Bajaj Finserv up by 0.41%. On the flip side, Tata Steel down by 2.08%, Kotak Mahindra Bank down by 1.87%, Infosys down by 1.79%, ICICI Bank down by 1.18% and Mahindra & Mahindra down by 1.15% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has said India's banking sector is resilient and stable, and the central bank maintains constant vigil on the lenders amid concerns over banks' exposure to the embattled Adani Group. Talking about private reports expressing concern about the exposure of Indian banks to a business conglomerate, RBI said that it is constantly monitoring the banking sector. However, the RBI did not name the Adani Group.

As per the current assessment, the RBI said, the banking sector remains resilient and stable. Various parameters relating to capital adequacy, asset quality, liquidity, provision coverage and profitability are healthy.

It mentioned ‘As the regulator and supervisor, the RBI maintains a constant vigil on the banking sector and on individual banks with a view to maintain financial stability. The RBI has a Central Repository of Information on Large Credits (CRILC) database system where the banks report their exposure of Rs 5 crore and above which is used for monitoring purposes.’

The CNX Nifty traded in a range of 17,823.70 and 17,698.35. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Adani Ports &SEZ up by 8.63%, Indusind Bank up by 2.49%, BPCL up by 2.19%, Apollo Hospital up by 1.73% and Hero MotoCorp up by 1.69%. On the flip side, Divi's Lab down by 3.58%, JSW Steel down by 3.03%, Hindalco down by 2.81%, Tata Steel down by 2.62% and Infosys down by 2.15% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 74.07 points or 0.94% to 7,827.73, France’s CAC fell 119.9 points or 1.66% to 7,114.04 and Germany’s DAX lost 196.78 points or 1.27% to 15,279.65.

Asian markets finished mostly lower on Monday as the investments got saddled as the unexpected surge in US employment fanned fears about more interest rate hikes by Federal Reserve. Moreover, investment got dulled as the alleged spy balloon incident spooked concerns about new sanctions against Chinese companies. Hang Seng Stocks plunged maximum among Asian indices, posts its third straight sessional loss as the Chinese economy rebound bets tumbled with the new geo-political tensions between US and China. Stock Market of Malaysia was closed for Thaipusam holiday.

Asian Indices

Last Trade            

Change in Points

Change in %  

Shanghai Composite

3,238.70-24.71-0.76

Hang Seng

21,222.16-438.31-2.07

Jakarta Composite

6,873.79-37.94-0.55

KLSE Composite

--

----

Nikkei 225

27,693.65

184.190.67

Straits Times

3,385.931.640.05

KOSPI Composite

2,438.19

-42.21-1.73

Taiwan Weighted

15,392.82-209.84-1.36
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