Post Session: Quick Review

Indian equity markets witnessed volatility throughout day and concluded day’s trade on flat note as traders were cautious ahead of RBI interest rate decision due on tomorrow. Meanwhile, IT sector’s stocks witnessed profit booking in day’s trade after yesterday’s rally. The broader indices, the BSE Mid cap index ended with gain of over a percent, while Small cap index also ended in green. 

Markets made positive start and remained in green tracking overnight gains on Wall Street as investors digested the latest batch of earnings and comments from a slew of Fed officials. Foreign fund inflows aided domestic sentiments. Foreign institutional investors (FIIs) net bought shares worth Rs 92.52 crore on February 6, provisional data from the NSE showed. Traders took some encouragement as finance minister Nirmala Sitharaman said that retail inflation has come down to within the tolerance band due to steps taken by the government to check price rise in essential commodities, especially in perishable commodities. However, in afternoon session, markets wiped out all their gains and turned negative. Some cautiousness came as India's aggressive fiscal consolidation objective for next year is already being doubted, with Fitch Ratings saying it expects the target of 5.1 percent of GDP to be missed by as much as 30 basis points. Adding more concerns among traders, a private report stated that businesses' one-year-ahead inflation expectations rose sharply to 4.58 percent in December 2023 from 4.04 percent in October 2023. In last leg of trade, losses got restricted to trade near neutral lines. 

On the global front, European markets were trading mostly in red amid ongoing uncertainty over the rate cut outlook. Asian markets ended mostly higher amid hopes for more Chinese measures in support of battered markets, while traders in most other markets tracked Wall Street advances fuelled by strong earnings. Back home, Moody's Investors Service, in a report on Asia–Pacific (APAC), has said that growth in Asia Pacific will decelerate in 2024 as a downshift in China's growth trajectory will spill over in the region through trade in goods and services, but India will be able to mitigate the challenge aided by robust domestic demand.

The BSE Sensex ended at 72,210.22, up by 24.13 points or 0.03% after trading in a range of 71,938.22 and 72,559.21. There were 18 stocks advancing against 12 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 1.48%, while Small cap index up by 0.35%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 1.69%, Power up by 1.12%, Telecom up by 1.11%, Utilities up by 1.03% and Consumer Disc was up by 0.98%, while IT down by 1.18%, TECK down by 0.94% and Capital Goods was down by 0.27% were the few losing indices on BSE. (Provisional)

The top gainers on the Sensex were SBI up by 4.09%, JSW Steel up by 2.22%, Bajaj Finance up by 1.87%, Nestle up by 1.84% and Axis Bank was up by 1.75%. On the flip side, Tech Mahindra down by 2.55%, Power Grid Corp down by 2.50%, Infosys down by 1.97%, TCS down by 1.13% and HDFC Bank was down by 0.92% were the top losers. (Provisional)

Meanwhile, Commerce and Industry Minister Piyush Goyal stated that the government has taken various measures like production-linked incentive schemes and simplified policies to boost investments, trade and promote economic activities in the country. He added India continues to open its economy to global investors by raising FDI limits, removing regulatory barriers, developing infrastructure and improving the business environment. To give impetus to foreign direct investment (FDI) inflows, he noted the government has put in place an investor-friendly policy, where most of the sectors are open for 100 per cent FDI under the automatic route.

He said ‘The government initiatives are significant to increase investments and promote economic growth besides converting the disruption caused by COVID-19 into an opportunity for growth and investment’. To ensure that India remains an attractive and investor-friendly destination, the government reviews FDI policy on an ongoing basis and makes changes from time to time after having intensive consultations with stakeholders. The policy provisions have been progressively liberalised and simplified across various sectors like asset reconstruction companies, broadcasting, pharma, single-brand retail trading, power exchanges, e-commerce activities, and coal mining.

In order to further improve the ease of doing business ecosystem in the country, he said the government coordinates with ministries, departments and states for initiatives to reduce compliance burden on citizen and business activities. In order to have a continuous evaluation framework, the government started a reform exercise - Business Reforms Action Plan for the assessment of the business environment in the states and UTs. The other initiatives include PLI schemes for 14 sectors, a national infrastructure pipeline, a national monetisation pipeline, India's industrial land bank, a national single window system, and an industrial park rating system.

Talking about trade, he said the government is encouraging exporters to participate in the exhibitions and providing grants in aid under the market access initiative. The 14 PLI schemes have the potential of significantly boosting production, employment, increase manufacturing activities and contribute to economic growth over the next five years or so, thereby having the potential to change the manufacturing ecosystem in the country. The government in 2021 announced PLI schemes for 14 sectors like 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 CNX Nifty ended at 21,930.50, up by 1.10 points or 0.01% after trading in a range of 21,860.15 and 22,053.30. There were 27 stocks advancing against 23 stocks declining on the index. (Provisional)

The top gainers on Nifty were SBI up by 3.84%, Grasim Industries up by 2.20%, JSW Steel up by 2.18%, HDFC Life Insurance up by 2.09% and Axis Bank up by 1.81%. On the flip side, Tech Mahindra down by 2.45%, Power Grid down by 2.30%, Infosys down by 2.06%, Adani Ports down by 1.37% and TCS down by 1.27% were the top losers. (Provisional)

European markets were trading mostly in red; UK’s FTSE 100 decreased 12.93 points or 0.17% to 7,668.08 and Germany’s DAX was down by 24 points or 0.14% to 17,009.24. On the flip side, France’s CAC was up by 5.34 points or 0.07% to 7,644.31.

Asian markets settled mostly higher on Wednesday, tracking Wall Street gains overnight in spite of hawkish comments from the US Federal Reserve officials. Market sentiments were also supported by a retreat in the US dollar and bond yields from recent highs. Chinese markets gained on a slew of signals that authorities are strengthening their resolve to support slumping markets. The China Securities Regulatory Commission urged companies to step up mergers and acquisitions and restructuring to enhance the value of listed companies. Reports showing that companies have spent more than $4 billion on buybacks after officials called on them to play their part.