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Bears hold tight grip on Indian markets
Oct-04-2023

Bears were holding a tight grip over Indian equity markets with both Sensex and Nifty trading near their intraday low points, impacted by negative cues from other Asian markets after the August U.S. job openings survey signaled a tight labor market, keeping the risks tiled toward another Fed rate hike. Heavy selling at Realty and Metal counters also kept indices in deep red. Sentiments were downbeat as Credit rating agency ICRA in its latest report said that states' borrowing cost jumped 10 basis points (bps) to 7.56 per cent at the first weekly debt auction of the third quarter on October 3, 2023 and is the highest in the past 23 weeks. The street paid no heed towards the Reserve Bank of India’s (RBI) monthly data report on ‘India’s International Trade in services’ showing that India's services exports surged 8.4% year-on-year to $28,719 million in August 2023, while imports of services during August 2023 fell 0.8% to $15,103 million.

On the global front, Asian markets were trading in red, even after the World Bank said South Asia is set to log growth higher than any other developing country region in the world this year. In the latest South Asia Development Update, the World Bank forecast South Asia to expand 5.8 percent in 2023. However, this would be slower than its pre-pandemic pace and also not sufficient to achieve its development goals.

The BSE Sensex is currently trading at 64959.06, down by 553.04 points or 0.84% after trading in a range of 64930.57 and 65332.52. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 1.51%, while Small cap index was down by 0.92%.

The top losing sectoral indices on the BSE were Realty down by 2.46%, Metal down by 1.91%, PSU down by 1.86%, Healthcare down by 1.79% and Telecom down by 1.60%, while there were no gaining sectoral indices on the BSE.

The few gainers on the Sensex were Nestle up by 1.38%, HDFC Bank up by 0.84%, Hindustan Unilever up by 0.78% and Asian Paints up by 0.09%. On the flip side, Axis Bank down by 3.63%, Ultratech Cement down by 2.73%, SBI down by 2.60%, Indusind Bank down by 2.56% and Sun Pharma down by 2.40% were the top losers.

Meanwhile, credit rating agency ICRA in its latest report has said that states' borrowing cost jumped 10 basis points (bps) to 7.56 per cent at the first weekly debt auction of the third quarter on October 3, 2023 and is the highest in the past 23 weeks. Fourteen states raised Rs 22,500 crore through the issuance of state government securities in line with the indicated amount for this weekly auction for the third quarter calendar.

According to the report, the auctions saw a steep increase in the cut-offs across tenors leading to the weighted average cost jumping to a 23-week high of 7.56 per cent. The higher pricing of the borrowing is despite a steep decline in the weighted average tenor to 13 years from 17 years. Moreover, it said the spread between the cut-off of 10-year state bonds and the new 10-year G-Secs (7.18 GS 2033) yield rose mildly to 33 bps from 32 bps last week.

It further said on an annualised basis to the week, the states have drawn down 15.4 per cent more than what they had drawn in the same period last fiscal at Rs 19,500 crore. With the latest auction, states have cumulatively raised Rs 3,80,500 crore from the debt market so far this fiscal, which is 28.6 per cent more than what they had raised in the same period last fiscal.

The CNX Nifty is currently trading at 19369.55, down by 159.20 points or 0.82% after trading in a range of 19355.05 and 19457.80. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 2.85%, Nestle up by 1.57%, Eicher Motors up by 1.26%, Hindustan Unilever up by 0.88% and HDFC Bank up by 0.84%. On the flip side, Axis Bank down by 3.82%, Ultratech Cement down by 2.73%, SBI down by 2.55%, Indusind Bank down by 2.46% and Sun Pharma down by 2.34% were the top losers.

Asian markets were trading in red; Nikkei 225 slipped 711.06 points or 2.33% to 30,526.88, Hang Seng declined 215.72 points or 1.26% to 17,115.50, Taiwan Weighted lost 180.96 points or 1.11% to 16,273.38, Jakarta Composite plunged 76.89 points or 1.12% to 6,864.00, KOSPI dropped 59.38 points or 2.47% to 2,405.69 and Straits Times fell 55.35 points or 1.76% to 3,137.00.
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