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Domestic indices trade deeply in red in early deals
Oct-04-2023

Indian equity benchmarks extended previous session’s southward journey with gap-down opening on Wednesday following overnight losses on Wall Street as well as weakness in Asian counterparts amid soaring US Treasuries. Domestic indices are trading deeply in red with cut of over 0.60% each in early deals. Persistent foreign fund outflows dented domestic sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FII) offloaded shares worth Rs 2,034.14 crore on October 3. Traders are also concerned as the World Bank increased its retail inflation forecast for India for 2023-24 to 5.9 per cent from the 5.2 per cent estimate made in April.

On the global front, Asian markets are trading in red after better-than-expected US jobs data, strong US dollar and spiking treasury yields at its highest level in 16 years continued to raise concerns the US Fed will hold interest rates higher for longer than previously anticipated to tame the stubborn inflation. China remains closed for the week for the National Day holiday.

Back home, Railways stocks are in focus as data released by the ministry of railways showed that after months of sluggish growth, movement of goods through Indian Railways recorded a growth of 6.67 per cent in September, with 123.53 million tonnes (mt) of volumes achieved. In stock specific development, Nestle traded higher as it plans to consider a stock-split on October 19.

The BSE Sensex is currently trading at 65090.27, down by 421.83 points or 0.64% after trading in a range of 64978.97 and 65332.52. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.72%, while Small cap index was down by 0.15%.

The sole gaining sectoral indices on the BSE was FMCG up by 0.12%, while Power down by 1.34%, Utilities down by 1.28%, Auto down by 1.10%, Metal down by 1.10% and Bankex down by 0.92% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 2.11%, Hindustan Unilever up by 0.83%, HDFC Bank up by 0.43%, Asian Paints up by 0.35% and Bajaj Finance up by 0.28%. On the flip side, NTPC down by 2.53%, Axis Bank down by 2.01%, Indusind Bank down by 1.90%, Maruti Suzuki down by 1.78% and Ultratech Cement down by 1.73% were the top losers.

Meanwhile, with the help of good investment and domestic demand, the World Bank in its latest ‘India Development Update’ report has said that the Indian economy, which accounts for the bulk of South Asia region, is projected to grow at 6.3 per cent in FY2023-24 and 6.4 per cent in FY2024-25. It added India continues to show resilience against the backdrop of a challenging global environment. On inflation front, it is expected to decrease gradually as food prices normalize and government measures help increase the supply of key commodities.

The World Bank said South Asia is expected to grow 5.8 per cent this year - higher than any other developing country region in the world, but slower than its pre-pandemic pace and not fast enough to meet its development goals. Relative to the spring forecast, growth in 2023 has been upgraded by 0.2 percentage points due to stronger-than-expected data in India.

Although India’s post-pandemic economic rebound is now fading, it said growth is expected to remain stronger than in other large emerging market and developing economies (EMDEs). The report said ‘the dampening effect of monetary policy tightening on domestic demand, particularly investment, will likely peak in the coming year. The effects of slowing global demand and rising interest rates will be mitigated by India’s low external debt and the healthy balance sheets of its financial and corporate sectors’.

Growth of merchandise exports is expected to slow as a result of weak foreign demand growth, although this will be offset by robust services exports. The World Bank said, in India, robust output growth in the first half of 2023 was supported by a strong expansion of investment and, on a sectoral level, continued strength of services. Government infrastructure projects have supported momentum in the construction sector, which has grown at year-over-year rates of around 10 per cent in recent quarters.

The CNX Nifty is currently trading at 19394.20, down by 134.55 points or 0.69% after trading in a range of 19375.40 and 19457.80. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Nestle up by 1.79%, Hindustan Unilever up by 1.00%, BPCL up by 0.72%, Adani Enterprises up by 0.49% and Asian Paints up by 0.44%. On the flip side, NTPC down by 2.57%, Axis Bank down by 2.00%, Indusind Bank down by 1.94%, Maruti Suzuki down by 1.85% and Ultratech Cement down by 1.76% were the top losers.

Asian markets are trading in red; Nikkei 225 slipped 682.82 points or 2.23% to 30,555.12, Taiwan Weighted lost 187.73 points or 1.15% to 16,266.61, Hang Seng declined 180.81 points or 1.05% to 17,150.41, Jakarta Composite plunged 76.61 points or 1.12% to 6,864.28, KOSPI dropped 56.18 points or 2.33% to 2,408.89 and Straits Times fell 45.17 points or 1.44% to 3,147.18.
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