IGI Logo

Indian markets closed sharply lower Monday, pulled by financial and FMCG stocks. Today, markets are likely to start session in red following weakness in global markets. The World Health Organisation (WHO) warned that Omicron, which now has been reported in more than 60 countries, poses a very high global risk, with some evidence that it evades vaccine protection. The state health department said Maharashtra on Monday reported two new patients infected with the new Omicron variant of SARS-CoV-2. Traders will be concerned as the data released by the Ministry of Statistics and Programme Implementation (MoSPI) showed that the country's retail inflation rate, which is measured by the Consumer Price Index (CPI), rose to 4.91 percent during the month of November 2021. The inflation has increased sequentially, as it was recorded at 4.48 percent in October 2021. Year-on-year, however, a dip has been registered as the rate of inflation in November 2020 was 6.93 percent. The uptick on sequential basis was led by an increase in food prices, particularly vegetables. Now, investors will be eyeing the WPI data to be out later in the day. Also, there will be some cautiousness as a private report showed that foreign direct investment (FDI) into India in the July-September quarter of 2021-22 fell a sharp 42% on year at $13.5 billion from $23.4 billion a year ago. However, some respite may come later in the day as estimates by Export-import Bank of India showed that India’s merchandise exports are expected to grow by 51 per cent to about $303.98 billion in nine months ending December 2021 over the same period in 2020. Traders may take note of report that NITI Aayog CEO Amitabh Kant said undeterred by the repeal of farm laws, the government will continue to push for greater reforms across sectors. Meanwhile, Finance Minister Nirmala Sitharaman has said the cabinet committee on privatisation is yet to take a decision with regard to divesting two public sector banks. Banking stocks will be in focus as United Forum of Bank Unions alleged that public sector banks have lost nearly Rs 2.85 lakh crore on account of loan dues of 13 corporates even as the banks are used to bail out ailing financial institutions such as Yes Bank and IL&FS. Data Patterns (India) IPO will open for subscription today. The public issue compromises a fresh issue of Rs 240 crore and an offer for sale of 59.52 lakh shares in the price band of Rs 555 - 585 per share. Shares of Anand Rathi Wealth Limited, the wealth management arm of Anand Rathi Financial Services, will be listed on NSE and BSE today.

The US markets ended lower on Monday as traders cashed in on some of the strength seen in the markets last week. Asian markets are trading mostly in red on Tuesday following Wall Street’s pullback from record highs.

Back home, Indian equity benchmarks wiped off morning gains to end sharply lower on Monday, amid concerns over rising cases of Omicron virus in Europe and surging inflation across the world. The benchmarks staged a gap up opening, as traders took encouragement with the government data showing that India's industrial production rose 3.2 per cent in October 2021. As per the Index of Industrial Production (IIP) data by the National Statistical Office (NSO), the manufacturing sector's output grew 2 per cent in October. Buying further crept in as the finance ministry said India's economic recovery is expected to strengthen in the remaining quarters of the current fiscal year with the investment cycle kicking off, and projected 7% annual growth until the end of the decade. Adding to the optimism, Union minister Amit Shah said policies were framed after hours of brainstorming and studying all the aspects in order to bring back pre-pandemic levels of economic growth. He also said the policies which became hurdles in bringing industry, affected 'Make In India' or obstructed 'Atmanirbhar Bharat' were changed during the coronavirus period. However, key indices succumbed to selling pressure in second half of trading session on account of profit booking. Domestic markets impacted as Reserve Bank of India (RBI) Governor Shaktikanta Das has cautioned depositors to be careful while chasing high returns as it comes with greater risk. Observing that depositors themselves also need to be very discerning, he said it is important to keep in mind that higher returns or higher interest rates are usually associated with higher risks. Traders also showed cautiousness with the reports that the government is unlikely to announce capital infusion for public sector banks (PSBs) in the upcoming Budget. Traders remained on sidelines ahead of the consumer price index (CPI) data to be released later in the day. Finally, the BSE Sensex fell 503.25 points or 0.86% to 58,283.42 and the CNX Nifty was down by 143.05 points or 0.82% to 17,368.25

Above views are of the author and not of the website kindly read disclaimer