China Stocks Extend Losses, India Indexes Down In Cautious Trading Ahead of Earnings Season

Arjun Pandit
08 Jan, 2024
Mumbai

Stocks traded sideways on the first day of the second trading week this year amid positive market sentiment.

The Sensex and the Nifty indexes advanced 0.2% in early trading after the statistical agency estimated India's economy to expand at a faster pace of 7.3% in the financial year ending in March.

Investors also looked ahead to the start of the earnings season, and tech-service export providers are scheduled to release earnings on January 11.

Power sector stocks were in focus for the second week in a row after Tata Power announced its plan to build solar and wind turbine-powered plants with a total capacity of 10 GW over the next five years.

In Friday's overseas trading, the U.S. economy added more-than-expected jobs in December.

The eurozone inflation accelerated in the month to 2.9%, and the UK home prices rebounded after falling for seven months in a row to £287,105.

 

Indexes In China Decline; Japan, Korea, and Australia Advance

In Asia, market indexes declined in mainland China by 1% and in Hong Kong by more than 2.4% after tech stocks led the decliners.

Economists estimated that official reports on January 12 are likely to show China's export and import growth slowed in December and inflation declined 0.4% after falling 0.5% in November, indicating persistent deflation.

Investors' hope of the Chinese government providing economic stimulus has so far not materialized, keeping the market index in a downward spiral for the fifth year in a row.

Market indexes in Korea and Japan advanced 0.3% ahead of the Bank of Korea's monetary policy announcement later in the week, and market indexes in Australia advanced 0.1% in choppy trading.

 

U.S. Job Market Added More Jobs than Expected

The U.S. economy added jobs at a faster pace in December, the jobless rate held steady, and wages rose at a faster-than-anticipated pace.

Nonfarm payrolls expanded by 216,000 in December, the U.S. Bureau of Labor Statistics reported Friday.

Economists polled by Ticker.com estimated payroll to expand by 160,000 after the economy added a downwardly revised 173,000 jobs in November.

However, the jobless rate was unchanged at 3.7%.

For the year 2023, the U.S. economy added 2.7 million jobs, the smallest increase since 2019 excluding pandemic-impacted 2020, indicating an average monthly increase of 225,000.

 

Economic Releases This Week

Looking ahead to next week, economic news and corporate earnings are expected to keep investors busy.

In the U.S., investors are awaiting the release of consumer and producer price inflation data in December and an international trade update.

In Europe, investors are looking ahead to the release of Germany’s balance of trade, the final inflation update from France, the inflation data in Switzerland, and Italy’s retail sales and industrial activity update.

In Asia, China is set to release its international trade data, India is scheduled to release its inflation figures, and the Bank of Korea will announce its interest rate decision.

Australia is scheduled to release its international trade data and monthly inflation update next week.

 

India Indexes and Yields

The Sensex index decreased 171.49 points to 71,822.46, and the Nifty index fell 68.80 points to 21,642.0.

On the Mumbai stock exchange, 409 stocks traded at their 52-week highs and 9 stocks traded at their 52-week lows.

The yield on the 10-year Indian government bonds held firm at 7.22%, and the Indian rupee hovered near ₹83.23 against the U.S. dollar.

The gold price decreased by 0.3% to ₹62,385 per ten grams, and silver fell by 0.4% to ₹72,273 per kilo.

Crude oil decreased by 0.9% to ₹6,072 per barrel, and natural gas declined by 1.0% to ₹238.70 per thermal unit.

 

India Stock Movers

Titan Company added 0.4% to ₹3,729.60 after the specialty retailer said total sales increased 22% from a year ago in the December quarter, powered by a 21% rise in jewelry sales.

Tata Steel increased 0.3% to ₹134.05 after the company said steel production increased 6% from the previous quarter and the previous year in the December quarter to 5.32 million tons, or 53.2 lakh tons.

FSN E-commerce Venture, parent of Nykaa, advanced 1.8% to ₹176.45, and the company said net sales value growth in the December quarter for its beauty and personal care division was around 20%.

Godrej Consumer Products dropped 4.6% to ₹1,161.25 after the company offered a weak growth outlook in the December quarter.

Consolidated sales volume is expected to rise in the December quarter in the mid-single-digit range.

Marico declined 4.3% to ₹522.50 after the company estimated consolidated revenue in the December quarter declined in a low single-digit range from a year ago.

Narayana Hrudalaya increased 1.6% to ₹1,237.75 after the company's subsidiary received approval from the insurance regulator to launch a health insurance business in India.

Bank of Baroda declined 3.2% to ₹227.05 after the financial service company said global deposits in the December quarter rose 8.3% from a year ago, powered by a 6.3% rise in domestic deposits.

However, global deposits declined by 0.3% from the previous quarter.