Local equities trade near low points of the day

Local equity markets traded near low points of the day in late afternoon trading, as Energy and banking shares along with index heavyweight Kotak Mahindra Bank and Reliance Industries came under selling pressure. As for broader indices, Small cap index remained in red, while BSE Mid cap index continued to trade in green. The overall market breadth was negative as 1836 shares were declining and 1355 were advancing, while 151 shares were unchanged on the BSE. Traders remained concerned even after credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the growth in Indian export basket during 1HFY22 showed a healthy mix of both labour-intensive items and high-value manufactured items. On the global front, Asian markets were trading mixed despite new record closes on Wall Street overnight. European markets were trading lower as Apple’s suppliers fell after the iPhone maker’s downbeat holiday-quarter forecast, while investors remained nervous about the monetary policy outlook.

The BSE Sensex is currently trading at 59218.89, down by 765.81 points or 1.28% after trading in a range of 59104.58 and 60132.81. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.12%, while Small cap index was down by 0.67%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.95%, Auto up by 0.43%, Basic Materials up by 0.37%, Metal up by 0.23% and Consumer Durables was up by 0.15%, while Energy down by 2.65%, Bankex down by 1.71%, Power down by 1.36%, Utilities down by 1.17% and IT was down by 0.90% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 5.77%, Ultratech Cement up by 2.66%, Maruti Suzuki up by 1.65%, Tata Steel up by 0.97% and Power Grid up by 0.89%. On the flip side, Kotak Mahindra Bank down by 3.74%, Reliance Industries down by 3.54%, Indusind Bank down by 3.23%, NTPC down by 2.65% and Axis Bank down by 2.40% were the top losers.

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the growth in Indian export basket during 1HFY22 showed a healthy mix of both labour-intensive items and high-value manufactured items.

However, the rating agency expressed worries that it will not be easy to maintain the current export growth momentum, as the stimulus-induced demand in developed economies might normalise in 2022 and it could tilt back in favour of services. Also, the political backlash against globalisation, which became pronounced 2012/2013 onwards, but has taken a backseat lately due to the COVID-19 pandemic, may resurface.

According to the report, a mix of policy support and a carefully crafted strategy which continuously explores the emerging opportunities of exports of manufactured products in developed and emerging markets can be a way forward. As the population in developed markets is aging, they need a different mix of goods and services than hitherto produced and exported by emerging economies to developed economies. Therefore, the way forward for India’s exports is to not only to complement the existing export basket with a new product mix but also focus more on emerging market opportunities.

The CNX Nifty is currently trading at 17643.15, down by 214.10 points or 1.20% after trading in a range of 17613.10 and 17915.85. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 7.16%, Ultratech Cement up by 2.63%, Cipla up by 2.51%, Shree Cement up by 2.11% and Maruti Suzuki up by 1.71%. On the flip side, Kotak Mahindra Bank down by 3.83%, Reliance Industries down by 3.56%, Indusind Bank down by 3.19%, NTPC down by 2.55% and Larsen & Toubro down by 2.53% were the top losers.

Asian markets were trading mixed, Nikkei 225 surged 72.60 points or 0.25% to 28,892.69, Jakarta Composite soared 67.27 points or 1.03% to 6,591.35, Shanghai Composite gained 28.92 points or 0.82% to 3,547.34 and Straits Times was up by 5.51 points or 0.17% to 3,209.33. On the flip side, KOSPI fell 38.87 points or 1.29% to 2,970.68, Taiwan Weighted dropped 54.22 points or 0.32% to 16,987.41 and Hang Seng was down by 178.49 points or 0.7% to 25,377.24.

European markets were trading lower, UK’s FTSE 100 decreased 25.55 points or 0.35% to 7,223.92, France’s CAC decreased 23.69 points or 0.35% to 6,780.53 and Germany’s DAX was down by112.70 points or 0.72% to 15,583.63.