Markets trade lower in early deals

Indian equity benchmarks made slightly negative start on Thursday tracking mixed Asian cues. Markets are trading lower with cut of over 0.35 percent each in early deals due to selling in IT, TECK and Capital Goods stocks. Rising crude oil prices and geopolitical tensions also weighed on the market sentiment. Some cautiousness came in as domestic rating agency CRISIL estimated FY23 real GDP growth at 7.8 per cent as compared with the 8.5 per cent projected in the Economic Survey. Though, downside remained capped as Commerce and Industry Minister Piyush Goyal said India is on track to achieve the $400-billion export target in the current fiscal and is negotiating trade agreements with countries like the UAE, the EU and Canada. Additionally, asserting that the Union Budget lays the foundation for the country’s long-term growth in the next 25 years, NITI Aayog Vice-Chairman Rajiv Kumar said the government is taking all possible measures to ignite private investments, which will be the best bet to pull the economy out of the shadows of the coronavirus pandemic.

Asian markets are trading mixed following the broadly positive cues overnight from Wall Street, as traders are cautious ahead of the monetary policy announcements from the Bank of England and the European Central Bank for clues about rates. Besides, the services sector in Japan dropped into contraction territory in January, the latest survey from Jibun Bank revealed on Thursday with a services PMI score of 47.6. The markets in Taiwan, China and Hong Kong remain closed for the Lunar New Year holidays.

Back home, tyre industry stocks were in focus as the Competition Commission of India (CCI) said Supreme Court dismissed a petition filed by tyre companies wherein they had challenged the regulator's order imposing penalties on them for anti-competitive practices. In scrip specific development, Shares of Bharat Dynamics (BDL) hit a new 52 week high after the company signed a contract worth Rs 3,131.82 crore with the Indian Army. The contract is for manufacture and supply of Konkurs - M AntiTank Guided Missiles to the Indian Army, and will be executed in three years.

The BSE Sensex is currently trading at 59324.29, down by 234.04 points or 0.39% after trading in a range of 59275.61 and 59557.87. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.32%, while Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were Auto up by 0.47%, FMCG up by 0.13%, Basic Materials up by 0.07%, Metal up by 0.05%, Realty up by 0.04%, while IT down by 0.88%, TECK down by 0.79%, Capital Goods down by 0.61%, Power down by 0.51%, Industrials down by 0.29% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.19%, Asian Paints up by 1.05%, SBI up by 0.49%, ITC up by 0.39% and Tata Steel up by 0.30%. On the flip side, NTPC down by 2.13%, HDFC down by 1.76%, Infosys down by 1.33%, Larsen & Toubro down by 1.08% and Bajaj Finance down by 1.08% were the top losers.

Meanwhile, domestic rating agency CRISIL has estimated FY23 real GDP growth at 7.8 per cent as compared with the 8.5 per cent projected in the Economic Survey. It said ‘All said, risks to India's economic outlook are still skewed towards the downside’. It also said Finance Minister Nirmala Sitharaman's Budget proposals focused on loosening the purse strings by boosting capital expenditure and going slow on fiscal consolidation are aimed in the right direction. The agency said global growth is expected to slow this year as major economies see a withdrawal of monetary and fiscal stimulus. It will have a direct bearing on India's growth prospects as exports have been a key demand driver of domestic growth during the pandemic.

It said energy prices, especially that of crude oil, are likely to continue firming up, partly owing to geopolitical issues and Brent crude will average up to $85 a barrel as against $70.44 in 2021, which will curtail growth, stoke inflation and widen the current account deficit. Additionally, even if global supply chain disruptions are expected to ease, critical raw material shortages such as those of chips could take time to tide over. The agency expects the nominal growth to come at 12-13 per cent, higher than the 11.1 per cent Budget Estimate, and the headline inflation to average 5.2 per cent. It said the Budget makes way for the 35 per cent increase in capital expenditure by tightening the belt around revenue expenditure, and the government has refrained from giving any direct consumption support in the Budget. It added that frontloading infrastructure spending could bring about faster growth.

The agency said the commitment to the Mahatma Gandhi National Rural Employment Guarantee Act has been reduced to Rs 73,000 crore for FY23 from the Rs 98,000 crore in FY22 and Rs 1.11 lakh crore in FY21, as part of the expenditure cuts. It said ‘extending this job guarantee scheme could have acted as a bridge for boosting short-term incomes and consumption in the rural areas before growth becomes broad-based and the investment cycle kicks off’. On the revenue side, the agency commended the pairing of divestment targets to a realistic level but warned that tightening of financial conditions amid monetary policy normalisation could further add challenges on this front.

The CNX Nifty is currently trading at 17713.55, down by 66.45 points or 0.37% after trading in a range of 17702.00 and 17781.15. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Tata Consumer Products up by 2.13%, Maruti Suzuki up by 1.35%, Asian Paints up by 1.01%, Tata Motors up by 0.68% and Titan Company up by 0.62%. On the flip side, NTPC down by 2.48%, HDFC down by 1.82%, Infosys down by 1.35%, SBI Life Insurance down by 1.17% and Bajaj Finance down by 1.09% were the top losers.

Asian markets are trading mixed; Straits Times jumped 69.44 points or 2.14% to 3,319.03 and KOSPI rose 59.93 points or 2.25% to 2,723.27. On the other hand, Nikkei 225 slipped 289.90 points or 1.05% to 27,243.70 and Jakarta Composite was down by 44.69 points or 0.67% to 6,662.96.