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Selling pressure continues in Indian markets
Apr-16-2024

A selling pressure continued in Indian equity markets, with both Sensex and Nifty trading near their intraday low points, as geopolitical tensions persisted and robust U.S. consumer spending data for March added to concerns about the outlook for interest rates. There was some cautiousness over the Street, amid a private report stating that interest rate cuts in India are off the table in fiscal year 2024/25 given the change in the Federal Reserve's policy path and strong growth in the South Asian nation. Adding some concerns among traders, the Indian government has announced an increase in windfall tax on petroleum crude from Rs 6,800 to Rs 9,600 per metric ton. This change will come into effect on April 16, as part of the government's fortnightly revision of the tax. However, diesel and aviation turbine fuel will remain unaffected and will continue to have a zero windfall tax rate. Traders failed to get any relief from the Reserve Bank of India’s (RBI) latest data on ‘Overseas Direct Investment’ showing that India’s outward foreign direct investment (OFDI) commitments rose 48.68% to $3919.84 million in March 2024 as against $2636.42 million in March 2023. Sequentially, FDI commitments were also up from $3,671.94 million in February 2024. 

On the global front, Asian markets were trading lower, even after China's gross domestic product gained 5.3 percent on year in the first quarter of 2024, exceeding expectations for an increase of 4.8 percent and up from 5.2 percent in the previous three months. On a seasonally adjusted quarterly basis, GDP was up 1.6 percent - accelerating from 1.0 percent in the three months prior. Back home, airline industry stocks were in watch as the Directorate General of Civil Aviation (DGCA) in its latest data has said domestic airlines carried 133.68 lakh passengers in March 2024, an increase of nearly 3.7 per cent on an annual basis. In March 2023, domestic air traffic stood at 128.93 lakh and the count stood at 126.48 lakh in February this year.

The BSE Sensex is currently trading at 72856.91, down by 542.87 points or 0.74% after trading in a range of 72814.15 and 73135.43. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell by 0.10%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.74%, Energy up by 0.42%, Consumer Durables up by 0.33%, FMCG up by 0.33% and Healthcare up by 0.09%, while IT down by 1.80%, TECK down by 1.67%, Realty down by 0.94%, Bankex down by 0.67% and Metal down by 0.62% were the top losing indices on BSE.

The top gainers on the Sensex were Titan up by 0.86%, Hindustan Unilever up by 0.84%, HDFC Bank up by 0.47%, Nestle up by 0.42% and Maruti Suzuki up by 0.06%. On the flip side, Infosys down by 2.79%, Bajaj Finserv down by 2.66%, Indusind Bank down by 2.58%, Tech Mahindra down by 2.01% and Bajaj Finance down by 1.87% were the top losers.

Meanwhile, Engineering Export Promotion Council (EEPC) has said that India's engineering exports edged up to $109 billion in 2023-24 from $107.04 billion in the previous financial year, thus registering a growth of 2.13 per cent, despite a slowdown in some of the major global markets amid geo-political tensions. It said FY24 closed on a strong note, with engineering exports rising 10.66 per cent year-on-year to $11.28 billion in March 2024 as against $10.19 billion in the same month last year.

EEPC said India's engineering exports are competitive globally and expected to gain further market share in the coming years, with the country entering into more FTAs. It expects the value of shipments from the sector to rise to $300 billion by 2030 and generate a significant number of jobs and foreign exchange earnings in the process. Notably, it said the engineering sector is the largest contributor to India's overall exports, with a share of 24 per cent, and also contributes approximately 40 per cent of the country's total manufacturing exports. 

EEPC India Chairman Arun Kumar Garodia has said that the monthly, as well as cumulative numbers, clearly show that the Indian engineering sector is quite competitive globally and consistently achieving success in penetrating new markets. He further said that free trade agreements (FTAs) with the UAE and Australia have allowed the exporting community to deepen their foothold in key markets. With more FTAs in the pipeline, engineering exports would certainly increase its share in the global market in coming years.

The CNX Nifty is currently trading at 22120.65, down by 151.85 points or 0.68% after trading in a range of 22103.85 and 22213.75. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 3.37%, ONGC up by 1.63%, Titan up by 0.93%, Divi's Lab up by 0.84% and Hindustan Unilever up by 0.82%. On the flip side, LTIMindtree down by 3.12%, Infosys down by 2.80%, Indusind Bank down by 2.59%, Bajaj Finserv down by 2.59% and Bajaj Auto down by 2.26% were the top losers.

All Asian markets were trading lower; Hang Seng declined 358.17 points or 2.16% to 16,242.29, Taiwan Weighted lost 547.81 points or 2.75% to 19,901.96, Jakarta Composite plunged 111.05 points or 1.52% to 7,175.83, Straits Times fell 43.13 points or 1.35% to 3,140.48, Shanghai Composite weakened 49.74 points or 1.63% to 3,007.64, KOSPI dropped 60.80 points or 2.33% to 2,609.63 and Nikkei 225 slipped 761.6 points or 1.98% to 38,471.20.
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