Indian stocks are trading in a narrow band at the end of the year

Indian stock markets ended slightly lower on Thursday after trading in a narrow band – a typical phenomenon at the end of the year – as traders refrained from engaging in big deals and taking bigger ones. risks.

The Bombay Stock Exchange’s sensitive 30-stock index, or Sensex, ended little change at 57,794.3. The most traded National Stock Exchange (NSE) Nifty50 index closed almost unchanged at 17,203.9.

National exchanges had a choppy session driven by gains in software and healthcare stocks on the day of monthly futures and options expiration. Globally, markets have been mixed, investors weighing the aftermath of a third wave amid global inflation. Bank stocks were under pressure as the Reserve Bank of India (RBI) financial stability report suggested an increase in bad loans with non-performing assets rising from 6.9% in September 2021 to 8.1% in September 2022 in the baseline scenario, ”said Vinod Nair., research manager at Geojit Financial Services.

Of the 11 sector indices, the Nifty IT Stock Index posted the most gains of 1% while the Nifty Realty Company Index fell 0.97%. The ratio of falling stocks – the number of rising stocks divided by the number of falling stocks – on the NSE was 984 to 1,050 today.

Key actions that have moved

Shares of private sector lender RBL Bank hit a 52-week low as the lender’s financial health deteriorates. The Mint newspaper reported that the bank canceled a particular INR 3 billion ($ 4 million) amount in loans within seven months of the sanction.

The Reserve Bank of India (RBI), the country’s central bank, today announced that it has approved the appointment of Rajeev Ahuja as interim managing director and managing director of the bank for three months. The stock ended down 9.4% to INR 130.7 on the NSE.

Software companies extended their run this week with Infosys and Tech Mahindra, the second and fourth largest IT companies in India, respectively, both hitting a new 52-week high as underlying concerns over the spread of coronaviruses grew. intensified the demand for digitization in the economy. Infosys ended up 0.38% at INR 1,892.65 and Tech Mahindra closed up 0.77% at INR 1,800.60.

Earlier today, service provider Firstsource Solutions announced it has reached an agreement to acquire American Recovery Services, a Southern California-based legal collection network, to strengthen its leadership position in debt management services. of consumers. It didn’t help the share price much as it ended up 0.2%.

“As the day progressed, the benchmark made several attempts to gradually rise, but failed to hold on to the upside. Volatility and instability are expected to remain elevated over the next few sessions, so we maintain a cautious stance in the markets, ”said Ajit Mishra, vice president of research at Religare Broking.

Omicron fears

Markets are marching under fear of the spread of the Omicron coronavirus variant and the potential derailment it could bring to the revival of economic activities.

The federal capital of India, New Delhi and the financial hub of Mumbai have seen an exponential increase in Covid-19 cases, a health official from the Maharashtra Covid Task Force said, adding that the increase in cases suggests that ‘it would be reasonable to say that the third wave has at least started in clusters in the two major cities.

“The rate at which the cases are doubling indicates that these are the hallmarks of Omicron. But we are waiting for the genome sequencing reports of the last few days to understand Omicron’s part. Right now it looks like a combination of Delta and Omicron, ”Rahul Pandit, a doctor with the Covid-19 task force, told India Today TV.

“Vaccination programs have been implemented in India amid many challenges. However, the Omicron variant now threatens to derail progress. Early indications are that it looks smoother but transmittable very quickly, ”said Dhiraj Relli, Managing Director and CEO of HDFC Securities.

Ring in the new year

With inflation rising and the US Federal Reserve showing its intentions to tighten liquidity, markets have remained volatile over the past two months. Foreign institutional investors have been net sellers of Indian stocks almost every day since October.

According to Santosh Kumar Singh, head of research at Motilal Oswal Asset Management Company, the abundance of liquidity is expected to decline early next year and interest rates will rise.

“On the positive side, the economy is showing strength and the corporate earnings cycle is on an uptrend. With two opposing themes in play, I would expect 2022 to be much more limited for the larger markets… some of the sectors could be doing very well, ”Singh said.

Global indices and upcoming monthly domestic auto sales figures will be on the radar, Religare’s Mishra said. Updates to the rise of Omicron cases in domestic and global markets would be a key area to watch and traders should maintain low leverage and hedged positions.

Read more: India to keep interest rates stable until October: Equirus

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