Bourses continue to show sluggish trend in morning deals

Indian equity benchmarks continued to show a sluggish trend in morning session, with losses of around two percent, as investors globally fretted over escalating tensions between Russia and the West over Ukraine. The mood on the street remained cautious with report that India’s industrial production fell to a 10-month low of 0.4 per cent in December 2021, with contraction in manufacturing. The Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 stood at 138.0 for the month of December 2021. The Index of Industrial Production (IIP) had grown by 2.2 per cent in December 2020. Some concern also came as data from depositories indicated that foreign portfolio investors (FPIs) have withdrawn a net Rs 14,935 crore from the Indian market in the first half of February. FPIs have been net sellers for the fourth consecutive month. As per data, FPIs took out Rs 10,080 crore from equities, Rs 4,830 crore from the debt segment and Rs 24 crore from hybrid instruments. Traders remained on sidelines ahead of CPI inflation and WPI inflation data scheduled for Feb 14.

On the global front, Asian markets were trading mostly in red as tensions rise over Russia’s military buildup near Ukraine and the US warning an invasion may be imminent. This comes amid high inflation and the prospect of aggressive Federal Reserve interest-rate hikes to tame it. Back home, on the sectoral front, stocks related to agricultural sector remained in focus with the commerce ministry’s statement that exports of agricultural and processed food products through Agricultural and Processed Food Products Export Development Authority (APEDA) are expected to exceed the target of $23.7 billion in the current fiscal (FY22).

The BSE Sensex is currently trading at 57031.89, down by 1121.03 points or 1.93% after trading in a range of 56612.07 and 57140.46. 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 2.18%, while Small cap index was down by 2.38%.

The top losing sectoral indices on the BSE were Metal down by 3.02%, Bankex down by 2.82%, Telecom down by 2.55%, Industrials down by 2.54% and Basic Materials down by 2.54%, while there were no gaining sectoral indices on the BSE.

The lone gainer on the Sensex was TCS up by 2.33%. On the flip side, ITC down by 4.22%, HDFC down by 3.86%, Indusind Bank down by 3.49%, Tata Steel down by 3.47% and ICICI Bank down by 3.38% were the top losers.

Meanwhile, SBI Research in its latest report has said that given the record government borrowing plan of Rs 14.3 lakh crore for FY23, the Reserve Bank of India (RBI), which already holds as much as 17 per cent of the Rs 80.8 lakh crore outstanding government bonds, will have to find buyers for at least Rs 2 lakh crore, as banks typically opt for short-term debt of under 10-years.

The Budget 2023 has pegged the Centre's gross borrowing at a record Rs 14.3 lakh crore. Together with the states, the gross borrowing will be Rs 23.3 lakh crore and the net will be Rs 17.8 lakh crore for the next financial year. The Budget seeks to pay back Rs 3.1 lakh crore next fiscal, up from Rs 2.7 lakh crore this fiscal. With Rs 80.8 lakh crore outstanding government bonds, the RBI is the second-largest holder of them after financial institutions.

According to a report, the government securities maturing by 2061 are worth Rs 80.8 lakh crore as of the end of January. Of this, 37.8 per cent are held by banks, 24.2 per cent by insurers, which means 62 per cent of them are held by them, and the monetary authority holds as much as 17 per cent. It mentioned that as against this, the foreign ownership of G-secs are a paltry 1.9 per cent. This is the lowest among its peers as in Brazil, it is a high 44.5 per cent, 41.1 per cent in Mexico, 35 per cent in South Africa and 10.5 per cent in China. It also pointed out that had the government allowed the G-Secs inclusion into international bond indices, as widely expected, this will have seen at least Rs 1.5 lakh crore/ $15-20 billion of additional ownership by foreigners, helping the RBI manage the borrowing programme easily.

The CNX Nifty is currently trading at 17038.70, down by 336.05 points or 1.93% after trading in a range of 16916.55 and 17099.50. There were 2 stocks advancing against 48 stocks declining on the index.

The few gainers on Nifty were TCS up by 2.33% and ONGC up by 2.26%. On the flip side, JSW Steel down by 5.10%, HDFC Life Insurance down by 4.27%, ITC down by 4.17%, HDFC down by 3.76% and Tata Steel down by 3.47% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 563.55 points or 2.03% to 27,132.53, Taiwan Weighted dropped 333.51 points or 1.82% to 17,977.43, Hang Seng decreased 312.45 points or 1.25% to 24,594.21, Jakarta Composite lost 91.27 points or 1.34% to 6,724.34, KOSPI fell 35.42 points or 1.29% to 2,712.29 and Shanghai Composite declined 21.72 points or 0.63% to 3,441.23.

On the flip side, Straits Times advanced 0.49 points or 0.01% to 3,429.44.