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Weak trade continues over Dalal Street
Oct-03-2023

Weak trade continued over the Dalal Street in early afternoon deals with both Sensex and Nifty trading in red, as India's manufacturing sector growth eased in the month of September. According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) eased to 57.5 in September 2023 from 58.6 in August 2023. Besides, weak cues from other Asian markets along with heavy selling at Auto and Oil & Gas counters also kept indices lower. Traders were cautious, amid reports that FPIs have turned net sellers and pulled out of over Rs 14,767 crore from Indian equities in September, primarily due to dollar appreciation, steady rise in the US bond yields, and a spike in crude oil prices.

On the global front, Asian markets were trading mostly lower, after the monetary base in Japan jumped 5.6 percent on year in September, coming in at 669.860 trillion yen. That shattered expectations for an increase of 1.6 percent following the upwardly revised 1.2 percent increase in August (originally 1.1 percent).

The BSE Sensex is currently trading at 65538.33, down by 290.08 points or 0.44% after trading in a range of 65344.59 and 65813.50. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.08%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.78%, Capital Goods up by 0.53%, Industrials up by 0.35%, Healthcare up by 0.04% and Realty up by 0.02%, while Auto down by 1.19%, Oil & Gas down by 1.05%, Energy down by 0.93%, Metal down by 0.90% and Power down by 0.72% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Tech. up by 1.41%, Asian Paints up by 1.27%, Hindustan Unilever up by 1.18%, Titan Co up by 1.12% and Bajaj Finserv up by 0.71%. On the flip side, Maruti Suzuki down by 2.36%, Tata Motors down by 1.52%, NTPC down by 1.42%, JSW Steel down by 1.19% and Sun Pharma down by 1.10% were the top losers.

Meanwhile, apex exporters body Federation of Indian Export Organisations (FIEO) in its latest report has said that 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. It also said that a note of caution is warranted regarding a distinct spike in export growth of roughly $40 billion as this particular surge is likely attributed to a rerouting of crude oil trade routes via India to Europe. It said this phenomenon may not be sustainable in the coming years.

FIEO has stated that the most ‘pressing concern’ regarding the negative export growth is the ‘poor’ performance of labour-intensive sectors. In a country like India, these sectors hold immense significance not only for their job creation potential but also for their substantial contribution to net high-value addition. Addressing this challenge requires a proactive approach that delves into the underlying factors contributing to the loss of market share. It calls for a comprehensive analysis of the dynamics at play, ranging from maintaining the competitive advantage, reducing the production costs and increasing efficiency to quality and innovation.

Elaborating on the importance of promoting traditional sectors, it said that the exports of mobile phones, which amounts to $10 billion, has a net value addition of about $1-2 billion. On the other hand, $10 billion worth of exports of traditional sectors would have a net value addition of over $9 billion. In woven garments, despite a global trade growth rate of about 2 per cent, India's export growth has consistently been below 1 per cent for years, while Bangladesh and Vietnam growing at 6 per cent and 4 per cent, respectively, impacting India's share.

The CNX Nifty is currently trading at 19532.60, down by 105.70 points or 0.54% after trading in a range of 19479.65 and 19623.20. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were HCL Tech. up by 1.50%, Asian Paints up by 1.28%, Titan Co up by 1.21%, Hindustan Unilever up by 1.21% and Bajaj Finserv up by 0.75%. On the flip side, ONGC down by 3.78%, Eicher Motors down by 3.21%, Hindalco down by 2.88%, Maruti Suzuki down by 2.46% and Dr. Reddy's Lab down by 2.00% were the top losers.

Asian markets were trading mostly lower; Hang Seng declined 521.27 points or 2.93% to 17,288.39, Taiwan Weighted lost 102.97 points or 0.62% to 16,454.34, Straits Times fell 24.41 points or 0.76% to 3,184.45 and Nikkei 225 slipped 571.5 points or 1.8% to 31,188.38. However, Jakarta Composite gained 5.48 points or 0.08% to 6,966.94. 
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