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Indian equity benchmarks fluctuated between gains and losses throughout the session and ended marginally lower on Thursday, led by losses in banking, healthcare and telecom stocks. Investors also turned cautious weighing on geopolitical tensions between Russia and Ukraine. Indices started session on a fairly positive note, as traders took some support with finance ministry’s statement that with the muted impact of the third wave of the pandemic on economic activity, the Indian economy may undergo an economic reset by end of the year, clocking 9 per cent growth in 2021-22 (FY22) and around 8 per cent in 2022-23 (FY23). However, markets turned volatile soon and traded with losses in morning deal as traders got anxious with Acuite Ratings & Research said India’s FY22 current account deficit faces mild upside risk from high commodity prices. The wider merchandise trade deficits pulled India's Q2FY22 current account into the negative territory.

Key gauges one again entered into green terrain in the noon session, taking support from the income tax department’s statement that more than 4.50 crore tax returns have been processed so far, of the total 6.26 crore ITR filed for the financial year 2020-21. Further, more than 5.41 crore income tax returns (ITRs) filed have been verified and 1.58 crore refunds amounting to Rs 31,857 crore for AY 2021-22 (2020-21 fiscal) have been issued. Some optimism also came after Finance Minister Nirmala Sitharaman pitched for expeditious and equitable distribution of vaccines to aid global recovery. She shared insights on India’s policy response to pandemic and suggested that recovery measures have to be built around a long-term vision. But, markets failed to hold the gains end ended lower, as some pessimism remained among traders with Reserve Bank of India (RBI) article stating that the manufacturing sector will need continued policy support for smoother and faster recovery to attain the long-term trend path. It said although the sector may soon attain its pre-COVID level, the process of attaining the long-term trend levels may take some time. It said that just when the manufacturers' outlook started looking up, the COVID-19-induced lockdown measures slowed down the revival process.

On the global front, Asian markets ended higher on Thursday, while European markets were trading mostly in green after notes from the latest Fed meeting showed officials are leaning toward more decision action on inflation but set no firm targets. Ukraine worries persisted after the United States said it had seen no evidence of a significant Russian pullback of its military forces from Ukraine's borders. Back home, on the sectoral front, edible oil industry stocks were in focus as industry body SEA said the country's oilmeal export declined by 65 per cent year-on-year to 1.76 lakh tonnes in January this year, mainly due to fall in shipments of soyabean and rapeseed meal. In January 2021, the country's oilmeal export stood at 5.01 lakh tones. Jewelary industry’s stocks too were in watch as industry body GJEPC said Gems and jewellery exports rose by 6.5 per cent to $32.37 billion during April-January this fiscal. The exports stood at $30.40 billion in the same period of the previous year.

Finally, the BSE Sensex fell 104.67 points or 0.18% to 57,892.01 and the CNX Nifty was down by 17.60 points or 0.10% to 17,304.60.    

The BSE Sensex touched high and low of 58,346.00 and 57,635.43, respectively. There were 11 stocks advancing against 19 stocks declining on the index. 

The broader indices ended in red; the BSE Mid cap index fell 0.22%, while Small cap index was down by 0.67%.

The top gaining sectoral indices on the BSE were Power up by 1.97%, Utilities up by 1.56%, Energy up by 1.15%, Oil & Gas up by 0.88% and Capital Goods up by 0.33%, while Bankex down by 1.15%, Healthcare down by 0.71%, Telecom down by 0.65%, IT down by 0.58% and TECK down by 0.55% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 1.71%, Reliance Industries up by 1.35%, Hindustan Unilever up by 0.84%, Power Grid Corporation up by 0.43% and Larsen & Toubro up by 0.33%. On the flip side, ICICI Bank down by 2.00%, Ultratech Cement down by 1.90%, Axis Bank down by 1.79%, Indusind Bank down by 1.27% and Nestle down by 0.85% were the top losers.

Meanwhile, Reserve Bank of India (RBI) article 'Impact of COVID-19 on Sentiments of Indian Manufacturers' published in RBI bulletin has said that the manufacturing sector will need continued policy support for smoother and faster recovery to attain the long-term trend path. Although, it said the sector may soon attain its pre-COVID level, the process of attaining the long-term trend levels may take some time. It said that just when the manufacturers' outlook started looking up, the COVID-19-induced lockdown measures slowed down the revival process.

The article further said the pandemic affected the producers' sentiments negatively by bringing down various parameters to historic lows. It said although the major macroeconomic variables are supposed to achieve their pre-COVID trend in near-term with improvement in demand conditions, they are expected to take time to return to their long-term trend path. It further said the accelerated rollout of vaccines, 2022-23 Budget proposals and other reforms are expected to provide a strong impetus for revival of the economy and will facilitate regaining of the growth potential over the medium-term.

As per the article, the first and second waves of the pandemic slowed down the economic activity, and the perception of the manufacturers was impacted adversely. It said the conditions improved with gradual resumption of normalcy. Concurrently, it said the subsequent waves of the pandemic and the reimposition of virus containment measures may dampen the manufacturers' sentiments and slow down the recovery process. 

The CNX Nifty traded in a range of 17,442.90 and 17,235.85 and there were 17 stocks advancing against 33 stocks declining on the index.  

The top gainers on Nifty were Tata Consumer Product up by 2.76%, HDFC up by 1.86%, ONGC up by 1.66%, Reliance Industries up by 1.16% and HDFC Life Insurance up by 0.74%. On the flip side, ICICI Bank down by 2.15%, Axis Bank down by 1.96%, Ultratech Cement down by 1.94%, Indusind Bank down by 1.35% and UPL down by 1.26% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 decreased 47.15 points or 0.62% to 7,556.63, France’s CAC increased 16.24 points or 0.23% to 6,981.22 and Germany’s DAX increased 9.87 points or 0.06% to 15,380.17.

Most of the Asian markets ended higher on Thursday as the dovish Fed minutes spurred more investments in to the market. Reaffirmation of Russian military troops retreating from Ukraine border also boosted investor confidence. Japan’s Nikkei ended lower followed by the sluggish export data for January month and as the adjusted trade balance marked further into deficit for the month. Moreover, accelerating domestic coronavirus infections also saddled the market. Shanghai stocks advanced on larger international investments and on anticipations over further monetary stimulus by People's Bank of China. Meanwhile, China's factory-gate inflation eased to its slowest pace in six months.

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