Post Session: Quick Review

Markets end flat with positive bias on Tuesday

Indian equity benchmarks ended flat with a positive bias on Tuesday. After a positive start, indices remained higher for the most part of the session, taking support with report that a day after surging past the 150,000-mark, India's count of active cases has dropped to 148,882. On Monday, the country registered 10,792 fresh Covid-19 cases, taking its the caseload tally to 11,015,863. Besides, the latest RBI policy minutes show that Governor Shaktikanta Das opined that growth momentum needs to be strengthened for a sustained revival of the economy and quick return to the pre-Covid trajectory while pitching for a status quo on rates.

Markets added notable gains during late morning deals but failed to hold gaining momentum during afternoon deals. Key indices remained volatile during the trading session, as investment through participatory notes (P-notes) in the Indian capital market dipped marginally to Rs 84,976 crore as on January 31 after hitting 31-month high value at the end of the preceding month. At December-end, the investment through such instruments had risen to a 31-month high of Rs 87,132 crore, reflecting the bullish stance of FPIs.

However, indices managed to end higher, after India Ratings and Research has revised its outlook on the overall banking sector to stable for the fiscal 2021-2022 (FY22) from negative even as it sees higher stress emerging in the retail loan segment going ahead. For public sector banks (PSBs), the outlook has been revised to stable from negative and for private banks. Some support came with domestic rating agency Icra stating that the monthly collections, including overdues in its rated retail loan pools originated largely by NBFCs and HFCs, have reached pre-moratorium levels as of December 2020. However, it said for its rated microfinance players, collections are yet to reach the pre-moratorium levels.

On the global front, European markets were trading mostly in green as strong commodity prices helped outweigh mixed corporate earnings updates, while British bank HSBC fell after it abandoned its long-term profitability targets. Asian markets ended mostly higher on Tuesday, after consumer confidence in South Korea improved in January, the latest survey from the Bank of Korea showed on Tuesday with a sentiment index score of 97.4 - up from 95.4 in December. Consumer sentiment regarding current living standards was one point higher than in January at 87, and that concerning the future outlook for living standards was also one point higher than in the previous month at 94. Consumer sentiment related to future household income was unchanged at 96, and that concerning future household spending was two points higher at 104.

The BSE Sensex ended at 49751.41, up by 7.09 points or 0.01% after trading in a range of 49659.85 and 50327.31. There were 20 stocks advancing against 10 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.98%, while Small cap index was up by 0.74%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 3.71%, Realty up by 2.89%, Basic Materials up by 2.16%, Oil & Gas up by 2.02% and Capital Goods up by 2.00%, while Bankex down by 0.54% and Telecom down by 0.20% were the only losing indices on BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 5.55%, Indusind Bank up by 2.65%, Larsen & Toubro up by 2.35%, Ultratech Cement up by 1.68% and SBI up by 1.57%. On the flip side, Kotak Mahindra Bank down by 3.87%, Maruti Suzuki down by 1.66%, Bajaj Auto down by 1.36%, HDFC Bank down by 1.26% and HCL Tech. down by 1.02% were the top losers. (Provisional)

Meanwhile, providing facilitation for exporters having IGST refund issues, the Central Board of Indirect Taxes and Customs (CBIC) has extended the time limit for sanction of pending IGST refunds in such cases where records have not been transmitted to ICEGATE due to GSTR1 and GSTR3B mismatch error. This overcomes the problem of refund blockage by allowing refunds subject to undertakings/submission of CA certificates by the exporters and post refund audit scrutiny.

The CBIC has also extended the facility for resolving invoice mismatch errors (classified as SB-005 error) through customs officer interface on permanent basis vide Circular 05/2021. The exporter may avail the facility of correction of Invoice mis-match errors (error code SB-005) in respect of all past shipping bills, irrespective of its date of filing subject to payment of a nominal fee.

The CBIC has continuously taken a proactive approach to resolve issues faced by the trade. It is seen that a considerable number of exporters have been facing difficulties in getting their IGST refund sanctioned either due to lack of facility to amend GST 3B return or bona-fide clerical/human errors while filing the documents.

The CNX Nifty ended at 14707.80, up by 32.10 points or 0.22% after trading in a range of 14651.85 and 14854.50. There were 34 stocks advancing against 16 stocks declining on the index. (Provisional)

The top gainers on Nifty were Tata Steel up by 6.54%, Tata Motors up by 6.40%, ONGC up by 5.55%, Hindalco up by 5.36% and UPL up by 4.94%. On the flip side, Kotak Mahindra Bank down by 3.93%, Adani Ports & SEZ down by 1.75%, Maruti Suzuki down by 1.64%, Bajaj Auto down by 1.49% and Divis Lab down by 1.38% were the top losers. (Provisional)

European markets were trading mostly in green, UK’s FTSE 100 increased 17.56 points or 0.27% to 6,629.80 and France’s CAC was up by 9.15 points or 0.16% to 5,776.59. On the flip side, Germany’s DAX was down by 63.55 points or 0.46% to 13,886.49.

Asian markets ended mostly higher on Tuesday as optimism of more US fiscal stimulus boosted hopes for a faster economic recovery globally, but prospects of rising inflation and valuation concerns put some pressure on market sentiment. Investors will be watching for any changes to the US Federal Reserve’s dovish outlook from Chairman Jerome Powell when he speaks before the Senate Banking Committee later in the day. Chinese shares ended marginally lower as policy tightening concerns persisted. China's central bank PCOB said it would prioritize policy stability and avoid making sudden shifts, while providing the support needed for a continued economic recovery in 2021. Meanwhile, Japanese market was closed on account of Emperor's Birthday.

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