Key gauges continue lacklustre trade in morning deals

Indian equity benchmarks continued lacklustre trade in morning deals amid mixed global cues and unabated foreign capital outflows. Foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 4,502.25 crore on June 14, data available with NSE suggested. Traders overlooked Chief Economic Adviser (CEA) V Anantha Nageswaran’s statement the country would become a $5 trillion economy by 2026-27 and $10 trillion by 2033-34. He said India is relatively better placed than other emerging economies. He added ‘on the face of it, looks optimistic, even ambitious, but if we get to $5 trillion by 2026-27’. Sectorally, insurance industry stocks remained in focus as regulator Irdai reduced the solvency margin requirement for general insurers providing crop insurance, a decision expected to unlock Rs 1,400 crore of funds for them to undertake more business. On the global front, Asian markets are trading mixed as investors await the Fed's interest-rate decision later in the day and the messaging around future guidance on rates for directional cues.

The BSE Sensex is currently trading at 52709.34, up by 15.77 points or 0.03% after trading in a range of 52538.51 and 52819.79. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.42%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Auto up by 1.13%, Consumer Disc up by 0.67%, Utilities up by 0.61%, Industrials up by 0.56% and Power up by 0.45%, while Metal down by 0.85%, FMCG down by 0.29%, Telecom down by 0.29%, Energy down by 0.24% and Oil & Gas down by 0.16% were the losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.61%, Mahindra & Mahindra up by 1.67%, Maruti Suzuki up by 1.19%, Bajaj Finance up by 1.17% and SBI up by 1.02%. On the flip side, Tata Steel down by 3.47%, Hindustan Unilever down by 1.30%, NTPC down by 0.73%, Indusind Bank down by 0.56% and HDFC down by 0.52% were the top losers.

Meanwhile, Fitch Ratings in its update to Global Economic Outlook has said the Reserve Bank of India (RBI) may raise interest rates further to 5.9 per cent by December 2022, on deteriorating inflation outlook. It stated India’s economy faces a worsening external environment, elevated commodity prices, and tighter global monetary policy. Last month in an unscheduled policy announcement, the Reserve Bank of India (RBI) raised rates by 40 basis points to 4.4 per cent, and subsequently to 4.9 per cent last week.

The RBI has forecast inflation to be 6.7 per cent by the end of current fiscal. The retail inflation for May came in at 7.04 per cent, while wholesale price-based inflation spiked to a record 15.88 per cent. It mentioned that inflation has risen to an eight-year high and broadens across more CPI categories, posing a severe challenge to consumers. In the past three months, food inflation has increased by an average of 7.3 per cent year-on-year, while healthcare bills are rising at a similar pace.

Further, it said the April-June quarter growth is likely to improve on a rebound in consumption as COVID-19 cases subsided towards end-March. Besides, it stated ‘GDP grew by 4.1 per cent year-on-year in 1Q22 (January-March) compared to our March forecast of 4.8 per cent. We now expect the economy to grow by 7.8 per cent this year (2022-2023), revised down from our previous forecast of 8.5 per cent.

The CNX Nifty is currently trading at 15733.95, up by 1.85 points or 0.01% after trading in a range of 15683.30 and 15780.15. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.41%, Tata Motors up by 1.76%, Mahindra & Mahindra up by 1.59%, Grasim Industries up by 1.33% and Bajaj Finance up by 1.18%. On the flip side, Tata Steel down by 3.54%, BPCL down by 1.99%, Hindustan Unilever down by 1.26%, Apollo Hospital down by 1.03% and HDFC down by 0.87% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 294.60 points or 1.11% to 26,335.26, Jakarta Composite lost 72.92 points or 1.03% to 6,976.96, KOSPI fell 54.63 points or 2.19% to 2,438.34 and Taiwan Weighted dropped 22.91 points or 0.14% to 16,024.46.

On the flip side, Straits Times advanced 19.00 points or 0.61% to 3,127.89, Shanghai Composite gained 46.21 points or 1.41% to 3,335.12 and Hang Seng increased 299.12 points or 1.42% to 21,367.11.