Benchmarks continue to trade lower in morning deals

Indian equity benchmarks continued to trade lower in morning deals, due to weakness in IT, TECK, Consumer Durables and Realty amid a weak trend in global markets. Sentiments remained down beat as Former Reserve Bank of India Governor D Subbarao said the concern today was that the low interest rates and the enormous liquidity available in the system could potentially disrupt financial stability. He added that the challenge for central banks and for the Reserve Bank of India was to juggle between maintain price stability, supporting growth and employment, preserving financial stability and all this in a globalised world. Meanwhile, the Reserve Bank of India (RBI) Governor Shaktikanta Das has urged banks and NBFCs to continue the process of augmentation of capital and building up of appropriate buffers to meet future uncertainties. On the global front, Asian markets were trading mixed after red-hot U.S. inflation data and hawkish comments from a Federal Reserve official fuelled bets on U.S. interest rates being hiked more aggressively, and sent U.S. Treasury yields jumping.

The BSE Sensex is currently trading at 58058.96, down by 867.07 points or 1.47% after trading in a range of 57914.10 and 58447.15. There were 1 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.21%, while Small cap index was down by 1.19%.

The top losing sectoral indices on the BSE were IT down by 2.33%, TECK down by 2.14%, Consumer Durables down by 1.95%, Realty down by 1.84% and Capital Goods down by 1.49%, while there were no gaining sectoral indices on the BSE.

The lone gainer on the Sensex was Maruti Suzuki up by 0.58%. On the flip side, Infosys down by 2.72%, Tech Mahindra down by 2.60%, Bajaj Finance down by 2.40%, Nestle down by 2.20% and Wipro down by 2.14% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) has said that reduction in impact of Covid-19's third wave, as well as accelerated re-opening activities, will boost textile demand in next financial year (FY23). It cited that reduction in logistics issues for export demand will aid in keeping healthy demand. It mentioned domestic demand for all the textile sub-sectors has continued to improve from 2QFY22, after a slight dip in 1QFY22. The increased demand momentum along with the supply chain issues has increased the realizations.

Demand for cotton remained all-time high in 2HFY21, leading to reduced opening stock for the new cotton season. The rise in prices of cotton has led spinners to accumulate the stock. Furthermore, it said that demand for MMF (man-made fibre) has continued to increase, mainly due to the rise in cotton prices, leading to a shift of demand from cotton to MMF, to an extent. The demand momentum sustained for home textiles in the domestic market because of improved consumer spending.

In addition, it cited that textile exporters in the cotton yarn segment continued to witness an improvement during 7MFY22 with volumes exceeding 47 per cent YoY over FY21. It expects export volumes to remain higher for FY22 over FY20 and FY21, on back of an increasing demand for Indian yarn. The export of fabric and apparel also recovered to the Pre-Covid levels during 8MFY22 and is likely to sustain with the opening up of economies and the adoption of 'China Plus One' strategy by importing countries.

The CNX Nifty is currently trading at 17347.25, down by 258.60 points or 1.47% after trading in a range of 17304.80 and 17454.75. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corporation up by 0.83%, Maruti Suzuki up by 0.45%, BPCL up by 0.42%, Hindalco up by 0.24% and ONGC up by 0.03%. On the flip side, Grasim Industries down by 3.44%, Infosys down by 2.81%, Tech Mahindra down by 2.71%, Nestle down by 2.48% and Britannia Industries down by 2.43% were the top losers.

Asian markets were trading mixed; Hang Seng increased 19.30 points or 0.08% to 24,943.65, Shanghai Composite gained 11.80 points or 0.34% to 3,497.71 and Straits Times advanced 7.70 points or 0.22% to 3,435.70.

On the flip side, KOSPI fell 19.66 points or 0.71% to 2,752.27, Jakarta Composite lost 23.04 points or 0.34% to 6,800.60 and Taiwan Weighted dropped 80.21 points or 0.44% to 18,257.84.