The domestic equity benchmarks nudged lower during the week, snapping two-week winning streak. The Reserve Bank of India (RBI) hiked the repo rate by 35 basis points to 6.25% at its December 2022 meeting, continuing its fight against inflation. The RBI also slashed its GDP forecast to 6.8% from an earlier estimate of 7% for the current fiscal. The Nifty settled below the 18,500 level. In the week ended on Friday, 9 December 2022, the Sensex declined 686.83 points or 1.09% to settle at 62,181.67. The Nifty 50 index lost 199.5 points or 1.07% to settle at 18,496.60. The BSE Mid-Cap index shed 0.86% to settle at 26,095.56. The BSE Small-Cap index fell 1.18% to settle at 29,558.56. Weekly Index Movement:

The equity benchmark indices ended almost flat on Monday. The barometer index, the S&P BSE Sensex, fell 33.9 points or 0.05% to 62,834.60. The Nifty 50 index added 4.95 points or 0.03% to 18,701.05.

The key equity benchmarks ended a volatile session with small losses on Tuesday, sliding for the third straight session. The barometer index, the S&P BSE Sensex, fell 208.24 points or 0.33% to 62,626.36. The Nifty 50 index lost 58.30 points or 0.31% to 18,642.75.

Key benchmark indices extended losses for the fourth straight session on Wednesday, as traders sold stocks post the Reserve Bank of India (RBI)'s repo rate hike. Selling was triggered after the RBI slashed its GDP forecast to 6.8% from an earlier estimate of 7% for the current fiscal. The barometer index, the S&P BSE Sensex, was down 215.68 points or 0.34% to 62,410.68. The Nifty 50 index lost 82.25 points or 0.44% to 18,560.50.

The equity barometers snapped four-day losing streak on Thursday. Trading was volatile due to expiry of weekly index options on the NSE. The barometer index, the S&P BSE Sensex advanced 160 points or 0.26% to 62,570.68. The Nifty 50 index added 48.85 points or 0.26% to 18,609.35.

The domestic equity benchmarks ended with limited losses after a weak session on Friday. The barometer index, the S&P BSE Sensex, declined 389.01 points or 0.62% to 62,181.67. The Nifty 50 index lost 112.75 points or 0.61% to 18,496.60.

Economy:

The six-member monetary policy committee (MPC) headed by RBI Governor on Wednesday (7 December) raised the key lending rate or the repo rate by 35 basis points to 6.25%. Consequently, the standing deposit facility (SDF) rate is adjusted to 6% and the marginal standing facility (MSF) rate and bank rate to 6.50%.

The MPC also decided to remain focused on the withdrawal of the accommodative stance to ensure that inflation remains within the target going forward while supporting growth.

On the inflation outlook, the governor said it is expected to be at 6.7% for the current fiscal. Concerning economic growth, the RBI has slashed its GDP forecast to 6.8% from an earlier estimate of 7% for the current fiscal. The next meeting of the MPC is scheduled during 6-8 February 2023.

Meanwhile, The seasonally adjusted S&P Global India Services PMI Business Activity Index rose to 56.4 in November, from 55.1 in October. The latest figure indicated a sharp increase in output that was the quickest in three months. The latest expansion is linked to demand strength, successful marketing and a sustained upturn in sales.

Indian services firms continued to benefit from accommodative demand conditions in November. New business inflows rose markedly and at the quickest pace in three months, supporting a sharp expansion in output and further job creation. There was another substantial increase in input costs, the second-fastest since July, which underpinned the strongest upturn in selling charges in just under five-and-a-half years.

Politics:

The votes polled in assembly elections in Himachal Pradesh and Gujarat were counted by the Election Commission of India (ECI) on 8 December 2022.

In Gujarat, the ruling BJP is all set to retain power in the state for a record 7th time. As per the latest results, BJP has won 156 seats. BJP has been in power in Gujarat since 1995. The Congress party was seen finishing a distant second – it won 17 seats, while the Aam Aadmi Party won 5 seats.

In Himachal Pradesh, Congress has won 40 seats. BJP has won 25 seats. Independent candidates won 3 seats.

The assembly elections in Himachal Pradesh were held in a single phase on 12 November 2022. The assembly elections in Gujarat were held in two phases - on 1st and 5th of December 2022.

Stocks in Spotlight:

State Bank of India (SBI) rose 1.46%. The state-run lender said that its board will meet on Wednesday, 14 December 2022 to consider the proposal of fund raising by way of issuance of basel III compliant debt instruments through a public offer or private placement basis.

Meanwhile, SBI on Friday (2 December) said it has raised Rs 10,000 crore through its maiden infrastructure bonds, offering a coupon rate of 7.51%. The tenor of these bonds is 10 years. The amount raised through these bonds will be utilized in enhancing long term resources for funding infrastructure and affordable housing segments.

Adani Ports and Special Economic Zone (APSEZ) rose 0.24%. The company said that it handled a cargo volume of approximately 25.3 million metric tonnes (MMT) in November 2022, registering a growth of 2.26% from 24.74 MMT recorded in November 2021.

Vedanta declined 1.55%. The mining company said that its board has approved issuing upto 8,000 unsecured, rated, listed, redeemable, non‐convertible debentures having a face value of Rs 10 lakh each aggregating up to Rs 800 crore (base issue size of Rs 500 crore and green shoe option of up to an additional Rs 300 crore).

Larsen & Toubro (L&T) rallied 3.35%. The EPC major announced that its construction arm has secured ‘mega' orders for its minerals and metals (M&M) business. As per L&T classification, the value of the mega project is above Rs 7,000 crore. Further, L&T said that its wholly owned subsidiary, Larsen & Toubro International FZE (LTIFZE) has entered into a share purchase agreement to purchase stake in OPRO.AI INC., a Delaware Corporation.

Hindustan Unilever (HUL) advanced 4.05%. The company has entered into definitive documents to acquire 19.8% shareholding of Nutritionalab, a private limited company incorporated in India. Nutritionalab is engaged in health and wellbeing (vitamins, minerals and supplements). HUL will acquire the stake for Rs 70 crore.

JSW Steel shed 0.24%. The steel major's standalone crude steel production in November 2022 stood at 16.90 lakh tonnes, registering a growth of 16% YoY.

HCL Technologies tumbled 9.46%. The company's management has indicated that FY23 revenue growth will be at the lower end of earlier guidance. The company held its Investor Day in New York on 8 December 2022.

Chief executive officer C Vijayakumar at company's Investor Day said: "In October, we had increased our guidance from 13.5% to 14.5%. We had certain assumptions which helped us to devise 16-17% services growth. We had assumed certain furloughs. But we are seeing a bit higher. BFSI is the segment which is little bit impacted by furloughs, followed by tech companies," he said.

The IT firm announced a new collaboration with Intel Corporation and Mavenir to develop and provide scalable private 5G network solutions for communication service providers (CSP) and broader cross-vertical enterprises.

Oil and Natural Gas Corporation (ONGC) fell 0.07%. ONGC has signed a MoU with global petroleum giant Shell for cooperation in carbon capture, utilization and storage (CCUS) studies. The MoU is aimed at developing carbon capture, utilisation and storage, or CCUS/carbon capture and storage (CCS) as an emissions mitigation tool for combating climate change and injecting carbon dioxide (CO2) for geological storage as well as enhanced oil production from mature fields of ONGC.

Global Markets:

China's services activity shrank to six-month lows in November as widening COVID containment measures weighed on demand and operations, a private-sector business survey showed on Monday, pointing to a further hit to economic growth.

The Caixin/S&P Global services Purchasing Managers' Index for November came in at 46.7, representing the lowest reading in six months. The print also marks the third consecutive month of contraction in output and new work, after October's reading came in at 48.4, while September's print was 49.3.

China's producer price index fell 1.3% in November compared to a year ago, extending its decline after shedding 1.3% in October. The nation's consumer price index rose 1.6% in November on an annualized basis.

European Central Bank Chief Economist Philip Lane has reportedly said that interest rates will need to rise several more times to rein in inflation, but that price increases in the euro zone are nearing a peak. As per media reports, Lane reportedly said that it remains uncertain whether this peak has already arrived or is due in early 2023.

German industrial orders rose by 0.8% month-on-month in October on a seasonally and calendar-adjusted basis, the country's federal statistics office said Tuesday.

Job growth was stronger than expected in November despite the Federal Reserve's efforts to cool the labor market. Nonfarm payrolls grew by 263,000 last month while the unemployment rate was unchanged at 3.7%, according to the Labor Department on Friday.

US services industry activity unexpectedly picked up in November. The ISM said its non-manufacturing PMI increased to 56.5 last month from 54.4 in October, which was the lowest reading since May 2020.

The U.S. Federal Reserve is expected to issue a 50 basis point interest rate hike next week. While that would be a smaller increase than recent rate hikes, investors are increasingly concerned about whether the central bank can avoid a recession next year in its attempt to squash inflation.