The domestic equity benchmarks ended the first week of the calendar year 2023 on a weak note as they declined in three out of five sessions during the week. Broader markets, however, managed to outperform as compared to the key equity barometers. The Nifty settled a tad above the 17,850 level. Investors hoped that the falling inflation in various countries across the globe could pave the way for the major central banks to temper their aggressive monetary policy tightening cycle and limit the global economic pain. However, minutes from the last meeting of the U.S. Federal Reserve, published earlier this week, showed policymakers stateside were seemingly unmoved from their hawkish position as they look to bring inflation back down towards its desired target level. In the week ended on Friday, 6 January 2023, the S&P BSE Sensex lost 940.37 points or 1.55% to settle at 59,900.37. The Nifty 50 index declined 245.85 points or 1.36% to settle at 17,859.45. The BSE Mid-Cap index fell by 0.58% to settle at 25,166.71. The BSE Small-Cap index slipped 0.50% to settle at 28,783.56.

Weekly Index Movement:

The key equity indices ended with modest gains on Monday, which was first trading day of 2023. Strong domestic economic data boosted sentiment. The barometer index, the S&P BSE Sensex advanced 327.05 points or 0.54% to 61,167.79. The Nifty 50 index added 92.15 points or 0.51% to 18,197.45.

The equity benchmarks ended with decent gains on Tuesday. Positive global cues supported buying in domestic shares. The barometer index, the S&P BSE Sensex advanced 126.41 points or 0.21% to 61,294.20. The Nifty 50 index added 35.10 points or 0.19% to 18,232.55.

The benchmark indices ended a volatile session with deep cuts on Wednesday. Investors were cautious ahead of the release of the minutes of the US Federal Open Market Committee's December policy meeting. The barometer index, the S&P BSE Sensex tumbled 636.75 points or 1.04% to 60,657.45. The Nifty 50 index lost 189.60 points or 1.04% to 18,042.95.

The headline equity indices pared most of the losses and ended with significant cuts on Thursday. Trading was volatile due to the expiry of weekly index options on the NSE. Investors sentiment took a nosedive after the minutes of the US Federal Reserve's December monetary policy reinforced expectations that the US central bank is likely to continue raising interest rates going forward.

The key equity indices ended with deep cuts on Friday, extending losses for the third straight session. The barometer index, the S&P BSE Sensex declined 452.90 points or 0.75% to 59,900.37. The Nifty 50 index lost 132.70 points or 0.74% to 17,859.45.

Economy:

India's gross goods and services tax (GST) collection for December stood at Rs 1,49,507 crore, the data released by the finance ministry showed. This is a surge of 15% year-on-year, mainly driven by increase in retail prices of consumption items, high inflation, and action taken to ensure compliance.

The S&P Global India Manufacturing PMI climbed to 57.8 in December 2022 from 55.7 in the prior month, pointing to the highest reading since October 2020 and marking the 18th straight month of expansion.

The seasonally adjusted S&P Global India Services PMI Business Activity Index rose to 58.5 in December from 56.4 in November, highlighting the strongest rate of expansion since mid-2022. Companies commonly linked the upturn to robust intakes of new work and favourable market conditions.

The S&P Global India Composite PMI Output Index rose from 56.7 in November to 59.4 in December, highlighting the quickest rate of growth since January 2012. Indian private sector firms signalled a strong performance at the end of 2022, with manufacturers and service providers recording faster expansions in output.

Stocks in Spotlight:

Maruti Suzuki India shed 0.27%. The company said that it had sold a total of 139,347 units in December 2022, which is lower by 9% as compared with 153,149 units sold in December 2021.

Separately, Maruti Suzuki India reported 17.96% fall in total production to 1,24,722 units in December 2022 compared with 152,029 units in December 2021. However, the company's total production declined 18.37% as against 152,786 units produced in November 2022.

Tata Motors fell 1.53%. The company's total domestic sales for December 2022 stood at 72,997 vehicles, up by 10% compared with 66,307 units sold during December 2021.

Mahindra & Mahindra (M&M) rose 1.25%. The company said that its overall auto sales for the month of December 2022 stood at 56,677 vehicles, registering a growth of 44.74% as against 39,157 vehicles sold in December 2021.

Further, M&M's Farm Equipment Sector (FES) announced its tractor sales numbers for December 2022. The company's total tractor sales (domestic + exports) surged 27% YoY to 23,243 units in December 2022 from 18,269 units sold in December 2021.

Bajaj Auto added 0.66%. The company reported 22% fall in total auto sales to 2,81,486 units in December 2022 as compared with 3,62,470 units sold in December 2021.

Eicher Motors rose by 0.62%. The company's said that its total sales (including domestic, exports, trucks and buses) stood at 7,221 units, up by 17.3% compared with 6,154 units in December 2021. Meanwhile, the company's total motorcycles (Royal Enfield) sales shed 7% to 68,400 units in December 2022 from 73,739 units sold in December 2021.

Hero Motocorp gained 0.66%. The two-wheeler major sold 394,179 units in December 2022, sliding 0.15% over the corresponding month of the previous year.

Oil and Natural Gas Corporation (ONGC) advanced 0.41%. The company said that the offshore drilling Rig of the company - 'Sagar Samrat' - has been commissioned as a mobile offshore production unit (MOPU) on 23 December 2022.

Reliance Industries slipped 0.41%. Reliance Consumer Products (RCPL), the FMCG arm and a wholly owned subsidiary of Reliance Retail Ventures (RRVL) on Tuesday (3 January 2023) announced that it will acquire 50% equity stake in Gujarat-headquartered Sosyo Hajoori Beverages (SHBPL).

Housing Development Finance Corporation (HDFC) declined 1.59%. HDFC said that during the quarter ended 31 December 2022, the corporation has assigned loans amounting to Rs 8,892 crore as compared to Rs 7,468 crore in the corresponding quarter of the previous year, up 19% YoY.

HDFC Bank fell 2.02%. The private lender's advances aggregated to approximately Rs 15,07,000 crore as of 31 December 2022, recording a growth of around 19.5% as against Rs 12,60,900 crore as of 31 December 2021. HDFC Bank registered a growth of around 1.8% in quarter ended 31 December 2022 from Rs 14,79,900 crore as of 30 September 2022.

NTPC rose by 1.59%. India's largest power generator commissioned India's first green hydrogen blending project. The green hydrogen blending has been started in the piped natural gas (PNG) network of NTPC Kawas township, Surat. The project is a joint effort of NTPC and Gujarat Gas Limited (GGL).

Separately, NTPC announced that its wholly owned subsidiary, NTPC Green Energy (NGEL) has signed a non-binding Memorandum of Understanding (MoU) with Hindustan Petroleum Corporation (HPCL) for development of renewable energy-based power projects.

IndusInd Bank declined by 3.25%. The private lender's net advances improved to Rs 2,71,966 crore as of 31 December 2022, registering a growth of 19% as compared to Rs 2,28,583 crore as of 31 December 2021. On quarter on quarter (QoQ) basis, net advances grew by 5% as against Rs 2,60,129 crore posted on 30 September 2022.

Bajaj Finance slumped 9.03%. The NBFC said that new loans booked by the company during Q3 FY23 stood at 7.8 million, up by 5.4% as compared with the same period last year. The company had booked 7.4 million loans in the corresponding quarter last fiscal.

Hindustan Unilever (HUL) advanced 0.63%. HUL has completed the acquisition of 19.8% shareholding of Nutritionalab, for a total consideration of Rs 70 crore in accordance with the terms and conditions of the Definitive Agreements dated 8 December 2022.

Adani Ports and Special Economic Zone slipped 1.45%. The company said that it had handled approximately 25.1 MMT of total cargo in December 2022, recording a growth of 8% in container volumes. The handled cargo volumes are marginally lower as compared with 25.3 MMT of total cargo handled in November 2022.

Global Markets:

The Caixin China general services purchasing manager's index showed easing of pressure on the sector for the month of December, with a reading of 48, maintaining in contraction territory. The print rose from seeing a six-month low in the previous month with a reading of 46.7.

The Federal Reserve released the minutes from its Dec. 13-14 meeting, which showed central bank officials expect rates to be higher for “some time.” “In view of the persistent and unacceptably high level of inflation, several participants commented that historical experience cautioned against prematurely loosening monetary policy.”

US manufacturing contracted further in December. The Institute for Supply Management (ISM) said on Wednesday that its manufacturing PMI dropped to 48.4 last month from 49.0 in November, contracting for a second straight month.