The domestic equity benchmarks witnessed sharp sell-off and ended the week with deep cuts, extending losses for the third week in a row. Market edged lower in four out of five trading sessions in the week. The Nifty settled below the 17,850 level. Investor sentiment nosedived after latest data showed that over 11 million new COVID-19 cases were reported in December worldwide. The new infections were not confined to a region, but were spread across all continents, barring Africa. Traders were also concerned that aggressive monetary policy moves by global central banks could push the world economy into recession. In the week ended on Friday, 23 December 2022, the S&P BSE Sensex tumbled 1,492.52 points or 2.43 % to settle at 59,845.29. The Nifty 50 index fell 462.20 points or 2.53% to settle at 17,806.80.The BSE Mid-Cap index slumped 1,312.42 points or 5.10% to settle at 24,426.79. The BSE Small-Cap index slipped 2,264.07 points or 7.67% to settle at 27,252.68.

Weekly Index Movement:

Domestic stock markets settled with decent gains on Monday. The barometer S&P BSE Sensex advanced 468.38 points or 0.76% to 61,806.19. The Nifty 50 index added 151.45 points or 0.83% to 18,420.45.

Domestic equity benchmarks ended with minor losses on Tuesday. The barometer index S&P BSE Sensex declined 103.90 points or 0.17% to 61,702.29. The Nifty 50 index lost 35.15 points or 0.19% to 18,385.30.

Domestic shares tumbled on Wednesday. The barometer index, the S&P BSE Sensex, declined 635.05 points or 1.03% to 61,067.24. The Nifty 50 index declined 186.20 points or 1.01% to 18,199.10.

Domestic shares declined for the third straight session on Thursday. The barometer index, the S&P BSE Sensex, fell 241.02 points or 0.39% to 60,826.22. The Nifty 50 index lost 71.75 points or 0.39% to 18,127.35.

The key equity barometers tanked on Friday, extending losses for the fourth trading session. The barometer index, the S&P BSE Sensex tumbled 980.93 points or 1.61% to 59,845.29. The Nifty 50 index lost 320.55 points or 1.77% to 17,806.80.

Stocks in Spotlight:

Reliance Industries (RIL) shed 2.48%. Reliance Retail Ventures (RRVL), a subsidiary of RIL, on 22 December 2022, signed definitive agreements to acquire 100% equity stake in METRO Cash & Carry India (METRO India) for a total cash consideration of Rs 2,850 crore, subject to closing adjustments.

Meanwhile, Reliance Strategic Business Ventures (RSBVL), a wholly owned subsidiary of RIL has acquired 23.3% stake in Exyn Technologies Inc (Exyn) for a total consideration of US$ 25 million.

Dr. Reddy's Laboratories rose 0.05%. The pharmaceutical company said that its tocilizumab biosimilar candidate, DRL_TC has met its primary and secondary endpoints in a Phase 1 study.

Bharti Airtel declined 1.67%. The telecom major on Tuesday announced that it has acquired about 8% stake in technology startup, Immensitas (Lemnisk) under its Start Up Accelerator Program. Lemnisk is a Bengaluru based start up that offers real-time marketing automation and secure customer data platform (CDP) capable of orchestrating 1-to-1 personalization and cross-channel customer journeys at scale that increases conversions, retention, and growth for enterprises.

Maruti Suzuki India skid 4.02%. The car major on Thursday said it has signed a five-year pact with Kamarajar Port Ltd for export of its passenger vehicles to international markets. Under the agreement starting December 2022, Kamarajar Port will be used for exports to Africa, Middle East, Latin America, ASEAN, Oceania and SAARC regions by the company, Maruti Suzuki India Ltd (MSIL) said in a statement.

NTPC slipped 3.83%. The state-run power major on Friday announced that it has signed a memorandum of understanding (MoU) with GE Power India to reduce carbon intensity at its coal-fired units. As per the regulatory filing, NTPC and GE Power India have signed a MoU for feasibility to demonstrate technologies to reduce the carbon footprint of NTPC's existing coal fired power plants.

Economy:

Market regulator SEBI said it will allow listed companies to utilise 75% of their surplus funds for share buybacks instead of 50% earlier. SEBI has said that these buybacks will be slowly phased out from the secondary market exchange platforms and conducted on a separate window. This is to ensure transparency in the tender process. SEBI said it will also cut the time for share buyback to 66 days from the present 90-day period.

India's Direct Tax collections for the Financial Year 2022-23, as on 17 December 2022 show that net collections are at Rs 11,35,754 crore, compared to Rs 9,47,959 crore in the corresponding period of the preceding Financial Year i.e FY 2021-22, representing an increase of 19.81%.

The Net Direct Tax collection of Rs 11,35,754 crore as on 17 December 2022 includes Corporation Tax (CIT) at Rs 6,06,679 crore (net of refund) and Personal Income Tax (PIT) including Securities Transaction Tax(STT) at Rs 5,26,477 crore (net of refund).

In a scenario where inflation continues to remain elevated, a "premature pause" in monetary policy action would be a "costly policy error", Reserve Bank of India Governor Shaktikanta Das said while voting for a 35 basis points hike in the repo rate in the December policy, according to the minutes of the Monetary Policy Committee (MPC) meeting released on Wednesday.

RBI Deputy Governor Michael Patra, who backed the 35 bps increase, expects inflation to remain above target over the next 12 months. The rate setting panel needs to see a decisive decline in inflation over a series of monthly readings before it shifts stance, Patra said.

In a 5:1 majority, the six-member MPC hiked the repo rate by 50 basis points (bps) to 6.25% in the meeting held from December 5 to 7. The MPC also decided by a majority of 4 out of 6 members to remain focused on withdrawal of accommodation.

Global Markets:

The People's Bank of China maintained its one-year loan prime rate at 3.65% and its five-year loan prime rate at 4.30%, in line with expectations.

The Bank of Japan on 20 December held its benchmark rate at record lows but widened the range for yield fluctuations in the benchmark government bonds. This move has been taken as a step toward the country leaving behind its policy of yield curve control and near-zero interest rates as the country grapples with surging inflation.

Japan's core consumer inflation hit a fresh 40-year high of 3.7% in November as companies continued to pass on rising costs to households, data showed on Friday.

Germany's consumer sentiment is set to show a small improvement in January, according to the forward-looking index released by the GfK institute earlier Wednesday. The index came in at -37.8, showing a small but gradual improvement from the revised -40.1 the prior month, and October's -42.8, the lowest reading in over a decade, as government energy measures helped stabilize morale.

The United Kingdom's (UK) gross domestic product (GDP) is estimated to have fallen by 0.3% in the third quarter (July to Sept) of 2022, marginally higher than a previous estimate of a 0.2% drop, Britain's Office for National Statistics (ONS) said in a statement release today.

US consumer confidence rose to an eight-month high in December. The Conference Board's consumer confidence index jumped to 108.3 in December from 101.4 in November. The number was also the index's highest since April.

The US current account deficit narrowed sharply in the third quarter as exports jumped to a record high, data showed on Wednesday. The Commerce Department said that the current account deficit, which measures the flow of goods, services and investments into and out of the country, contracted 9.1% to $217.1 billion last quarter. That was the smallest gap since the second quarter of 2021.