Domestic indices trade lower with over 0.60% cut in early deals

Indian equity benchmarks made gap-down opening on Wednesday tracking weakness in global counterparts. Soon, markets trimmed some of their losses but continued their trade in red with cut of over 0.60% each in early deals. Investor are eyeing the Reserve Bank's rate-setting panel to start its 3-day deliberations today amid expectations of yet another rate hike of 50 basis points to check high inflation, in line with similar actions taken by other major central banks, including the US Fed. Traders were concerned as the fourth round of the Quarterly Employment Survey (QES) released by the Labour Ministry showed that employment generation in nine non-farm sectors slowed down in the March quarter of FY22, possibly under the impact of Omicron variant of Covid-19, with additional job creation dipping to 350,000 during the quarter, from 390,000 in the preceding December quarter of the financial year. However, traders managed to trim some of their losses taking support with the income tax department’s statement that the net direct tax collection has increased 23 per cent to Rs 7.04 lakh crore so far this fiscal. Adding more optimism, Economic affairs secretary Ajay Seth dismissed the concerns over depletion of forex reserve as overblown and said India has fairly large reserve to tide over the current situation.

Global cues remained lackluster with all the Asian markets trading lower following the mixed to negative cues from global markets overnight, as traders were cautious and remained worried that efforts by central banks around the world to curb inflation may trigger a global recession. Uncertainty due to the ongoing conflict in Ukraine is also weighing on market sentiment. Back home, steel industry stocks were in limelight as the commerce ministry recommended imposition of anti-dumping duty on Chinese steel tubes and pipes for five years to guard domestic players from cheap imports from the neighbouring country. In stock specific development, 63 Moons Tech edged up in a weak market. The company will provide next-generation technology solutions to Italy-based Spuma SRL as it targets pan-European markets.

The BSE Sensex is currently trading at 56753.78, down by 353.74 points or 0.62% after trading in a range of 56498.72 and 56819.49. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.44%, while Small cap index was down by 0.38%.

The few gaining sectoral indices on the BSE were Auto up by 0.25%, Telecom up by 0.25%, Healthcare up by 0.01%, while Oil & Gas down by 1.20%, Energy down by 1.17%, Metal down by 1.00%, Bankex down by 0.75%, Power down by 0.75% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.02%, Mahindra & Mahindra up by 0.77%, Power Grid up by 0.44%, Dr. Reddy's Lab up by 0.41% and Wipro up by 0.14%. On the flip side, Indusind Bank down by 2.37%, NTPC down by 1.95%, HDFC down by 1.61%, Axis Bank down by 1.60% and Reliance Industries down by 1.48% were the top losers.

Meanwhile, with a drop in oil and commodity prices, investment in the Indian capital markets through participatory notes rose to Rs 84,810 crore at the end of August, after three consecutive monthly declines. Participatory notes (P-notes) are issued by registered FPIs to overseas investors who wish to be a part of the Indian stock market without registering themselves directly. They, however, need to go through a due diligence process.

According to Securities and Exchange Board of India (SEBI) data, the value of P-note investments in Indian markets -- equity, debt, and hybrid securities -- stood at Rs 84,810 crore in August compared to Rs 75,725 crore in July-end. In comparison, investment through the route was Rs 80,092 crore in June-end, Rs 86,706 crore in May-end and Rs 90,580 crore at the end of April.

Of the total Rs 84,810 crore invested through the route till August 2022, Rs 75,389 crore was invested in equities, Rs 9,330 crore in debt, and Rs 91 crore in hybrid securities. In comparison, Rs 66,050 crore was invested in equities and Rs 9,592 crore in debt during July this year.

The CNX Nifty is currently trading at 16899.15, down by 108.25 points or 0.64% after trading in a range of 16825.40 and 16919.45. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 1.08%, Mahindra & Mahindra up by 0.82%, Dr. Reddy's Lab up by 0.58%, Britannia Industries up by 0.31% and Tata Motors up by 0.26%. On the flip side, Indusind Bank down by 2.24%, SBI Life Insurance down by 2.06%, NTPC down by 2.01%, HDFC Life Insurance down by 1.88% and ONGC down by 1.69% were the top losers.

All the Asian markets are trading in red; Nikkei 225 slipped 539.31 points or 2.03% to 26,032.56, Straits Times declined 39.80 points or 1.26% to 3,125.70, Hang Seng plunged 427.65 points or 2.39% to 17,432.66, Taiwan Weighted dropped 257.62 points or 1.86% to 13,568.97, KOSPI lost 61.92 points or 2.78% to 2,161.94, Jakarta Composite fell 0.43 points or 0.01% to 7,112.02 and Shanghai Composite was down by 23.22 points or 0.75% to 3,070.64.