Markets turn green on first trading day of 2023

Nifty50: 18,197 ▲ 92 (+0.5%)
Sensex: 61,167 ▲ 327 (+0.5%)

Namaste, friends!

What time of the year is it, again? Oh, it’s time to make our new year's resolutions! The holiday season is behind us. And we are all set to face a brand new year with resilience, grit and a hot cup of tea. Let’s hope this year brings us more peace of mind, better trading & investment decisions and of course, higher returns.

The first trading day of the new year mirrored our positivity and ended in green, giving us some much-needed hope. A hope for better days to come. Now isn’t that just what we need to start the year with a bang?

• Despite intraday volatility, markets started the year on a positive note. 
• In all, 30 of the Nifty50 stocks closed in the green.
• India’s manufacturing PMI climbed to a 13-month high of 57.8 in December. A number above 50 indicates an expansion of manufacturing activities.

Among the Nifty sectoral indices, Metal (+2.4%) and Media (+1.1%) were the top gainers, while Pharma (-0.3%) was the only loser.

What’s trending

⭐ December was a mixed-bag sales for auto cos

MARUTI (NSE): 8,408 ▲ 13 (+0.1%), TATAMOTORS (NSE): 395 ▲ 7 (+1.8%)

Market leader, Maruti Suzuki’s domestic passenger vehicle (PV) sales for December declined 8.9% year-on-year (YoY) to 1.1 lakh units. The company cited that a shortage of electronic components impacted production. Meanwhile, Tata Motors’ PV sales rose 13.9% YoY supported by its SUV range. SUV maker Mahindra & Mahindra, too, reported a 61% rise in its PV sales. Nonetheless, the auto majors mentioned that they are closely monitoring any impact on the supply side due to rising COVID cases globally.

⭐ MCX stocks tank post contract extension

MCX (NSE): 1,455 ▼ 99 (-6.3%)

Shares of Multi Commodity Exchange of India fell 7% as it extended its software services contract with its current vendor for another six months. This implies that there is a delay in the implementation of its new platform. The new platform was supposed to be provided by TCS, which was appointed as its tech-solutions provider in September 2021. 

⭐ India’s power consumption sees double-digit growth

TATAPOWER (NSE): 212 ▲ 4.3 (+2.0%), ADANIPOWER (NSE): 297 ▼ 1.6 (-0.5%)

Domestic power consumption reached 121.1 billion units in December 2022, a 11% increase compared to December 2021. Experts believe that power consumption and demand could rise further in January due to usage of heating appliances in winter and further improvement in economic activities. 

⭐ Global recession looms ahead 

Nearly a third of the global economy will be in recession this year, the chief of the International Monetary Fund (IMF) has warned. The US, European Union and China economy could also see an economic slowdown. The warning comes in light of the ongoing geopolitical tensions, higher interest rates, rising prices and the new wave of the pandemic.

In Focus

January: Will the market break its jinx?

In the last 20 years, the Nifty 50 index has ended 13 times in red in January. Further, on average, it delivered a -0.9% return in January during this period. Will Nifty crumble again or remain resilient? Let’s look at some key factors that could shape the market direction.

To begin with, the quarterly earnings of companies could play a deciding role in determining market sentiments. Rising interest rates, concern around global slowdown and commodity price inflation could be key factors during the third quarter result. TCS is expected to kick start the earning season by declaring its results on 9 January.

Besides, retail inflation figures for India and US for December 2022 could give cues on the rate hikes ahead. India’s inflation has been cooling off for the last two months and stood at 5.88% in November 2022. Inflation number will be released on 12 January.

Finally, expectations surrounding the union budget could also drive the market sentiments. The annual budget will be presented on 1 February. 

All in all, January 2023 seems to be eventful. But will the market be able to break the ‘January Jinx’? Guess, we will just have to wait and watch!

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Good to know

What is Manufacturing PMI?

Purchasing Managers’ Index or PMI is an economic indicator, which is derived from the monthly surveys of different companies. It helps in determining whether the market conditions, as seen by purchasing managers, are expanding, contracting or staying the same. The PMI is released mainly for the manufacturing and services sector. If PMI is above 50, it shows an expansion of activities compared to the previous month. Where a PMI below 50, indicates a contraction and PMI at 50 indicates no change.

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