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Indian equity benchmarks erased initial gains in the last hour to end half a percent lower on Wednesday on the back of fresh selling pressure in select index heavyweights like Maruti Suzuki, Infosys, ITC and Reliance Industries. For most part of the day, benchmarks traded firmly higher, as traders got encouragement with private report stated that Indian GDP will grow at 8.5 per cent in 2021-22, and the rate will accelerate further to 9.8 per cent in 2022-23. It also expects consumption to be an important contributor to growth in 2022, as the economy fully re-opens driven by a notable improvement in the virus situation and adequate progress on vaccination. Some optimism also came with India Ratings and Research’s (Ind-Ra) report stated that the average collections across its rated securitization transactions have inched up to 79 percent in September 2021 from 70 percent in May 2021 as the economy started to open up due to acceleration in vaccine rollout.

However, domestic markets failed to continue positive momentum and closed with losses amid weak global cues. Market participants overlooked US India Business Council stating that regular engagement between India and the United States under the bilateral Trade Policy Forum mechanism will help remove barriers to trade, facilitate higher levels of investment and increase two-way trade in goods and services. Traders also paid no heed towards Union Finance Minister Nirmala Sitharaman’s statement that the money taken away from the banks will be taken back as the government is actively pursuing the cases of loan defaulters and will not let them go scot-free, particularly those who have fled the country.

On the global front, Asian markets ended mostly lower on Wednesday, while European markets were trading mostly in red as U.S. Treasury yields continued to rise on expectations that the Federal Reserve might speed up policy tightening to cope with broadening inflationary risks. Also, concerns persisted about the resurgence of coronavirus cases and fresh lockdown measures in Europe and elsewhere. Back home, on the sectoral front, oil & gas industry stocks were in focus as India will release 5 million barrels of crude oil from its strategic petroleum reserves in a concerted effort to bring down global crude oil prices. Stocks related to IT services sector too were in action with private report stated that Indian IT services sector is expected to see a gross employee addition of about 4.5 lakh in the second half of the fiscal ended March 2022.

Finally, the BSE Sensex fall 323.34 points or 0.55% to 58,340.99 and the CNX Nifty was down by 88.30 points or 0.50% to 17,415.05. 

The BSE Sensex touched high and low of 58,968.12 and 58,143.44, respectively and there were 8 stocks advancing against 22 stocks declining on the index.    

The broader indices ended mixed; the BSE Mid cap index fell 0.57%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.78%, PSU up by 0.60%, Bankex up by 0.53%, Utilities up by 0.52% and Telecom up by 0.10%, while IT down by 1.24%, Auto down by 1.18%, TECK down by 1.02%, Capital Goods down by 0.93% and FMCG down by 0.86% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.45%, NTPC up by 1.42%, ICICI Bank up by 1.11%, Bajaj Finance up by 0.73% and Power Grid Corporation up by 0.62%. On the flip side, Maruti Suzuki down by 2.62%, Infosys down by 2.01%, ITC down by 1.60%, Reliance Industries down by 1.48% and Larsen & Toubro down by 1.47% were the top losers.

Meanwhile, the Finance Ministry said the Centre has released two instalments of tax devolution to the State Governments amounting to Rs 95,082 crore on November 22 2021, as against normal monthly devolution of Rs 47,541 crore. Currently, 41 per cent of the tax collected is devolved in 14 instalments among states during a fiscal.

After a meeting with all chief ministers and state finance ministers recently, Union Finance Minister Nirmala Sitharaman had said the Centre will double the amount of November tax devolution by including one advance instalment to help states push their capital expenditure.

The increased amount of devolution in November is an advance release, and final adjustments will be made in March 2022. It added ‘Rs 95,082 crore of Tax devolution to strengthen fiscal space of States’.

The CNX Nifty traded in a range of 17,600.60 and 17,354.00 and there were 13 stocks advancing against 36 stocks declining, while 1 stock remains unchanged on the index. 

The top gainers on Nifty were ONGC up by 4.26%, Adani Ports up by 3.94%, Coal India up by 1.70%, NTPC up by 1.27% and Kotak Mahindra Bank up by 1.19%. On the flip side, Eicher Motors down by 2.81%,Tata Consumer Products down by 2.80%, Maruti Suzuki down by 2.77%, Grasim Industries down by 2.76% and Infosys down by 2.69% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 10.64 points or 0.15% to 7,033.98 and Germany’s DAX decreased 49.94 points or 0.31% to 15,887.06, while UK’s FTSE 100 increased 4.88 points or 0.07% to 7,271.57.

Asian markets ended mostly lower on Wednesday due to rise in US dollar and treasury yields following expectations that the US central bank Federal Reserve will speed up policy tightening. Lingering concerns over resurgence in corona-virus cases and fresh lockdown measures in Europe and elsewhere have also pressurising market sentiments. Japanese shares declined as investors shrugged off positive data showing that the manufacturing sector in Japan picked up steam in November, with a manufacturing PMI score of 54.2, up from 53.2 in October, the latest survey from Jibun Bank revealed. While, the services PMI improved to 52.1 in November from 50.7 in October. However, Chinese and Hong Kong shares settled higher after reports showing that Chinese Estates Holdings, a long-time supporter of China Evergrande Group, has further trimmed its stake in the embattled property developer.

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