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Domestic indices trade in red in early deals
Oct-03-2023

Indian equity benchmarks started the new month on pessimistic note after a long weekend holiday, tracking weakness in global peers. Domestic indices are trading deeply in red with cut of over half a percent each in early deals led by selling pressure in auto and metal stocks. Foreign fund outflows also dented sentiments.  Traders were concerned as a finance ministry report said the government’s total gross debt increased by 2.2 per cent quarter-on-quarter to Rs 159.53 lakh crore in April-June this fiscal. Also, a FIEO report has said India's labour-intensive export sectors such as apparels, marine products, plastics, and gems and jewellery are showing a ‘troubling pattern’ as the country is experiencing a decline in global market share across these segments during the last five years.

However, indices are moving in narrow range as downside remained capped with positive economic data. The government data showed that the growth of eight key infrastructure sectors rose to a 14-month high of 12.1% in August 2023 against 4.2% a year ago, mainly due to expansion in production of coal, crude oil, and natural gas. Gross GST collection rose 10% to over Rs 1.62 lakh crore in September, crossing the Rs 1.6 lakh crore mark for the fourth time during current financial year. Besides, investors are eyeing S&P Global Manufacturing PMI data to be out later in the day for more cues. 

Most of the Asian markets are trading lower in thin trade amid strength of the US dollar against major currencies in the region and a surge in treasury yields to its highest level in almost sixteen years. Traders also await key monthly US employment data later in the week for cues on the outlook for interest rates. China remains closed for National Day and South Korea is closed for an extended Chuseok Festival. Back home, auto stocks reacting to their monthly sales numbers. Eicher Motors slipped as its September sales came 4% lower on a monthly basis. However, Mahindra & Mahindra rose on reporting 20% sales growth in September.

The BSE Sensex is currently trading at 65444.53, down by 383.88 points or 0.58% after trading in a range of 65399.82 and 65813.50. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.19%, while Small cap index was up by 0.29%.

The sole gaining sectoral index on the BSE was FMCG up by 0.04%, while Metal down by 1.11%, Energy down by 1.01%, Oil & Gas down by 0.94%, Auto down by 0.91% and Power down by 0.69% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 0.97%, Asian Paints up by 0.94%, Hindustan Unilever up by 0.88%, Wipro up by 0.43% and Axis Bank up by 0.40%. On the flip side, Maruti Suzuki down by 2.14%, Tata Motors down by 1.26%, JSW Steel down by 1.14%, SBI down by 1.09% and Tata Steel down by 1.09% were the top losers.

Meanwhile, expressing optimism over the India’s economic condition, Chief Economic Advisor (CEA) V Anantha Nageswaran has said that the country’s economy is poised to grow at an average of 6.5 per cent annually between 2023 and 2030. He said the global economy is going to witness a period of uncertainty, and India has to plug into the global supply chain and make itself attractive for the China-plus one strategy. The economy had 9.1 per cent growth in FY22 and 7.2 per cent in FY23. He asserted that India has made progress in the last eight years as it has now become the fifth largest economy from the 10th rank globally in 2014, and within the end of this decade, it will become the third largest economy in the world.

He said ‘Why I am talking about 6.5 per cent and not 7.5-8 per cent? It is because we are not experiencing the kind of global growth that we experienced between 2003 and 2008’. He noted global economy is going to go through a period of uncertainty. Geo-political fragmentation, geo-economic inefficiencies, and reversal of globalisation, and all these factors are currently underway. He said ‘Whereas between 2003 and 2008, globalisation was in its heyday. Interest rates were low or were being lowered globally… now interest rates either are rising or going to remain at a high level. We are realistic about our growth prospect, which is still going to be one of the world’s highest growth rates at 6.5 per cent in real terms and 11 per cent in nominal terms’.

He also emphasised the importance of increasing the share of manufacturing in Gross Domestic Product (GDP), and the country’s contribution to global manufacturing. Another important contributor to improving the economic growth rate is the country’s willingness and ability to take care of micro, small and medium enterprises (MSMEs). He said the private sector must think in terms of long run and large scale and invest in R&D to improve the country’s manufacturing share to GDP, and added that manufacturing employs low and semi-skilled workers. He stressed the role of the state governments in easing land use conversion laws and facilitating land acquisitions. According to him, farming is still going to be an important activity for a large country with a huge population like India, tech companies can contribute to it.

The CNX Nifty is currently trading at 19511.15, down by 127.15 points or 0.65% after trading in a range of 19498.10 and 19623.20. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 0.88%, Ultratech Cement up by 0.78%, Asian Paints up by 0.76%, Adani Ports & SEZ up by 0.59% and Mahindra & Mahindra up by 0.55%. On the flip side, ONGC down by 3.54%, Eicher Motors down by 3.04%, Hindalco down by 2.70%, Maruti Suzuki down by 2.08% and Tata Motors down by 1.34% were the top losers.

Asian markets are trading mostly in red; Hang Seng plunged 536.81 points or 3.01% to 17,272.85, Nikkei 225 slipped 472.61 points or 1.49% to 31,287.27, Taiwan Weighted lost 33.43 points or 0.2% to 16,523.88 and Straits Times fell 26.33 points or 0.82% to 3,182.53, while Jakarta Composite was up by 6.42 points or 0.09% to 6,967.88.
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