Metals Take The Lead

The initial sessions of the first week of the fortnight were a roller-coaster ride for Indian domestic indices as they experienced a rally due to the strength in technology stocks globally and then an immediate decline to the same level due to, once again, the technology stocks. Following the release of optimistic economic data, the indices then surged in the following week. India’s key retail inflation rate declined for the third consecutive month in December, coming in at 5.72 per cent. According to the Reserve Bank of India, it is inappropriate to review the present inflation target of 4 per cent with a 2 per cent tolerance in the current situation. 

According to data released by the Ministry of Statistics and Programme Implementation, India’s industrial growth, as measured by the Index of Industrial Production (IIP), improved to 7.1 per cent in November. The statistics ministry believes that India’s gross domestic product (GDP) would grow by 7 per cent in 2022-2023. According to a government statement, India has reduced its windfall tax on crude oil and the export of aviation turbine fuel (ATF) from ₹2,100 per tonne to ₹1,900 per tonne. Oil prices jumped as the outlook for the global economy improved.

China reported yearly data that was lacklustre but surpassed expectations, and there was optimism that the change in the corona virus-related policy in China would strengthen fuel demand. The Indian benchmark indices BSE Sensex and Nifty 50 ended the fortnight with losses of 0.21 and 0.41 per cent, respectively, after declining in the last few sessions of the fortnight. Broader indices underperformed the main indices by falling more than 1 per cent and experiencing a significant sell-off.

The BSE Metals sector surged 3.53 per cent during this fortnight, continuing its trend of being the best-performing sector. Significant export bookings and speculation that Indian steel mills are considering price increases in response to stronger global cues drove up the shares of metal companies with Tata Steel, Vedanta and Hindalco Industries among the sector’s Top Gainers. Power stocks came back into the spotlight as demand increased significantly over the harsh winter. The BSE Power index was on a strong upswing with gains of almost 3 per cent due to the upbeat outlook for the industry. 

Significant export bookings and speculation that Indian steel mills are considering price increases in response to stronger global cues drove up the shares of metal companies 

The BSE Fast Moving Consumer Goods (FMCG) sector had the worst performance among all sectors due to the sharp declines in FMCG stocks as businesses experienced margin pressurefrom inflation and currency challenges. The information technology and oil and gas sectors enjoyed modest gains, whereas healthcare and automotive stocks were some of the market draggers. While DIIs were net buyers over the past two weeks, FIIs have turned to being net sellers. The FII outflow was recorded at ₹12,066.67 crore whereas DII inflow was recorded at ₹13,425.80 crore in the past 15 days.