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Sensex, Nifty trade lower in early deals amid geopolitical worries
Apr-16-2024

Indian equity benchmarks extended their previous session’s losses with gap-down opening on Tuesday following the broad sell-off on Wall Street overnight as well as lackluster trade in Asian counterparts today, as bond yields spiked after a report showed a much stronger than expected U.S. retail sales growth in March. The data led to renewed concerns the US Fed will hold off on lowering interest rates in June. Traders also remained concerned about geopolitical tensions in the middle-east. Sensex and Nifty are trading lower with cut of around 0.40% each in early deals amid selling in IT, Teck and Banking stocks. Foreign fund outflows also dented sentiments. Foreign institutional investors (FIIs) net sold shares worth Rs 3,268 crore on April 15, provisional data from the NSE showed. 

Traders were concerned with report that India’s merchandise exports dipped marginally in March to $41.69 billion, and by 3.11 per cent during the last fiscal year to $437.06 billion mainly due to continued geopolitical turmoil, and depressed global trade. Imports, too, declined in March as well during the entire 2023-24. Trade deficit narrowed 17.74 per cent in March to $15.6 billion and came down 9.33 per cent to $240.17 billion in FY24. However, broader indices -- BSE Mid & Small cap -- are outperforming larger peers with decent gains as some support came in after the India Meteorological Department (IMD) said India is likely to experience above-normal cumulative rainfall in the 2024 monsoon season with La Nina conditions likely to set in by August-September. 

On the sectoral front, oil & gas industry stocks remained in focus as the Indian government has announced an increase in windfall tax on petroleum crude from 6,800 rupees to 9,600 rupees per metric ton. This change will come into effect on April 16, as part of the government's fortnightly revision of the tax. In stock specific development, Jio Financial Services jumped after it entered into a joint venture with U.S.-based BlackRock for wealth management and broking business in India.

The BSE Sensex is currently trading at 73041.78, down by 358.00 points or 0.49% after trading in a range of 72814.15 and 73135.43. There were 7 stocks advancing against 22 stocks declining, while 1 stock reamin unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.12%, while Small cap index was up by 0.57%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.25%, Energy up by 0.97%, PSU up by 0.42%, Consumer Durables up by 0.40% and Auto up by 0.38%, while Realty down by 1.05%, IT down by 0.89%, TECK down by 0.82%, Bankex down by 0.72% and Telecom down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 0.90%, Maruti Suzuki up by 0.67%, Mahindra & Mahindra up by 0.54%, Tata Steel up by 0.44% and Titan Company up by 0.28%. On the flip side, Indusind Bank down by 2.00%, Bajaj Finserv down by 1.65%, Bajaj Finance down by 1.55%, Infosys down by 1.42% and Larsen & Toubro down by 1.10% were the top losers.

Meanwhile, amidst prevailing moderate El Nino conditions over the equatorial Pacific region, the India Meteorological Department (IMD) has predicted an above-normal rainfall season across the country during the southwest monsoon. El Nino and La Nina are climate patterns in the Pacific Ocean that can affect weather worldwide. According to IMD’s forecast, the seasonal June to September rainfall is expected to be above normal, with quantitative estimates indicating it could reach 106 per cent of the Long Period Average (LPA). The LPA for the period 1971-2020 stands at 87 cm.

Presently, neutral Indian Ocean Dipole (IOD) conditions prevail over the Indian Ocean. Nonetheless, IMD’s latest climate model forecasts hint at the likelihood of positive IOD conditions emerging during the later part of the southwest monsoon season, adding another dimension to the monsoon dynamics. IMD said that the northern hemisphere snow cover extent during the last three months (January to March 2024) has been below normal. Such deviations from the norm in snow cover extent could influence weather patterns, including the forthcoming monsoon season.

The forecast of above-normal rainfall raises prospects for agricultural productivity and water reserves across the country. However, it also underscores the importance of preparedness measures to mitigate potential risks associated with flooding and landslides, particularly in vulnerable regions. IMD emphasizes the need for stakeholders to closely monitor evolving climate patterns and undertake proactive measures to ensure the safety and well-being of communities, as well as to optimize agricultural planning and water resource management strategies.

The CNX Nifty is currently trading at 22182.55, down by 89.95 points or 0.40% after trading in a range of 22103.85 and 22209.75. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.02%, Hero MotoCorp up by 1.16%, Nestle up by 1.05%, Coal India up by 0.94% and Eicher Motors up by 0.84%. On the flip side, LTIMindtree down by 2.76%, Indusind Bank down by 1.93%, Bajaj Finserv down by 1.51%, Bajaj Finance down by 1.43% and Infosys down by 1.36% were the top losers.

All Asian markets are trading lower; Nikkei 225 slipped 845.23 points or 2.2% to 38,387.57, Taiwan Weighted plunged 524.37 points or 2.63% to 19,925.40, Hang Seng declined 318.6 points or 1.96% to 16,281.86, Jakarta Composite lost 134.81 points or 1.88% to 7,152.07, KOSPI dropped 63.61 points or 2.44% to 2,606.82, Shanghai Composite fell 43.54 points or 1.44% to 3,013.84 and Straits Times was down by 39.47 points or 1.26% to 3,144.14.
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