Markets trade lower in early deals amid rising crude oil prices

Indian equity benchmarks have extended their previous session’s losses with negative opening on Thursday and are now trading lower by around quarter a percent, tracking weak cues from global markets amid rising crude oil prices. Meanwhile, the session was also proving weak for broader indices which are trading with loss in the range of 0.03-0.27%.  Traders were concerned as the Organization for Economic Cooperation and Development (OECD) pegged India’s FY23 economic growth at 6.9 per cent, the lowest by a major bank or institution, saying the country had been adversely affected by Russia’s invasion of Ukraine. Besides, weakness also prevailed in the markets as foreign institutional investors (FIIs) have net sold Rs 2,484.25 crore worth of shares on June 8, as per provisional data available on the NSE.

On the global front, most of Asian markets are trading lower on Thursday amid renewed worries about rising inflation, slowing growth and the outlook for interest rates. The US markets ended lower on Wednesday as Treasury yields rose above the psychologically important 3% level and oil prices jumped.

Back home, most of paint industry stocks are trading lower after Brent Crude oil hit $124 per barrel, touching its 13-week high. Sugar industry stocks are in focus as ISMA said sugar exports from India, the world's largest producer and second biggest exporter of the sweetener, touched a record 8.6 million tonne till May of the ongoing 2021-22 marketing year ending September.

The BSE Sensex is currently trading at 54755.74, down by 136.75 points or 0.25% after trading in a range of 54507.41 and 54762.95. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.27%, while Small cap index down by 0.03%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.67%, Energy up by 0.56%, Oil & Gas up by 0.35%, Utilities up by 0.09% and Power up by 0.04%, while Realty down by 0.72%, Bankex down by 0.64%, Consumer Durables down by 0.53%, FMCG down by 0.48%, Consumer Discretionary down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 2.23%, Reliance Industries up by 0.75%, Sun Pharma up by 0.41%, Infosys up by 0.25% and NTPC up by 0.19%. On the flip side, Asian Paints down by 1.76%, Bajaj Finance down by 1.12%, Nestle down by 0.97%, Power Grid Corp down by 0.89% and Axis Bank down by 0.83% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has said India’s current account deficit (CAD) will remain at a sustainable level and the normal flows will help RBI to finance it. The country’s current account deficit increased to USD 23 billion, or 2.7 per cent of GDP, in the third quarter of FY 2021-22 from USD 9.9 billion or 1.3 per cent of GDP in the second quarter and USD 2.2 billion (0.3 per cent of GDP) in Q3 of fiscal 2020-21.

The widening of CAD in Q3 FY22 was mainly on account of higher trade deficit. He said there has been a rise in exports and imports. He stated higher exports are the good signs of the economy. Higher imports also augur well and it means that there is capital expenditure and investment which is taking place or is going to take place.

Further, talking about the Indian economy, he said the country is well placed to deal with the challenges emanating from the geopolitical developments. He noted that the recovery is gaining traction and it is reflected in the fact that capacity utilisation has improved. Disbursal of bank credit is also picking up. Rural and urban demand are showing signs of further improvement. Overall macroeconomic numbers broadly look alright.

The CNX Nifty is currently trading at 16314.05, down by 42.20 points or 0.26% after trading in a range of 16243.85 and 16319.65. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 2.28%, ONGC up by 1.71%, Cipla up by 0.84%, Reliance Industries up by 0.76% and Coal India up by 0.56%. On the flip side, Asian Paints down by 1.71%, Tata Consumer Produc down by 1.31%, Grasim Industries down by 1.26%, Bajaj Finance down by 1.10% and Britannia Inds down by 1.01% were the top losers.

Asian markets are trading mostly in red; Hang Seng decreased 91.69 points or 0.42% to 21,922.90, Taiwan Weighted dropped 65.70 points or 0.39% to 16,604.81, Shanghai Composite declined 15.93 points or 0.49% to 3,247.86, KOSPI fell 12.15 points or 0.46% to 2,614.00 and Straits Times was down by 13.18 points or 0.41% to 3,212.62.

On the flip side, Jakarta Composite soared 43.13 points or 0.6% to 7,236.44 and Nikkei 225 was up by 62.76 points or 0.22% to 28,297.05.