Benchmarks trade marginally lower in morning deals

Indian equity benchmarks erased most of their initial losses to trade marginally lower in morning deals, tracking weakness across global markets as concerns persisted about steep hikes in pandemic-era interest rates. Some concern also came as the latest data released by the Reserve Bank of India (RBI) showed India’s foreign exchange reserves declined $4.6 billion to $596 billion for the week ended June 10. The fall in total reserves was mainly because of a decline in foreign currency assets worth $4.5 billion. However, most of losses got trimmed as traders found some solace as Member of the economic advisory council to the prime minister -- Sanjeev Sanyal stated that the country's internal market is in a good position and its macroeconomic stability is in a comfortable zone despite the ravage by the pandemic. He said that there has been an unprecedented crisis during the two-year-long pandemic and the Indian economy has emerged stronger after that. Traders also took a note of Chief Economic Advisor (CEA) V Anantha Nageswaran’s statement that the government is committed to ensuring that capital expenditure (Capex) will continue to support the economic growth momentum regained after the third COVID-19 wave.

On the global front, Asian markets are trading mostly in red on concerns over high inflation and aggressive interest-rate hikes by major central banks. Federal Reserve Governor Christopher Waller said he would support another 75-basis-point rate increase at the central bank's July meeting. Back home, the textile industry stocks remained in watch as Cotton Association of India (CAI) reduced its estimate for the cotton crop output for the current season beginning October 2021 to 315.32 lakh bales of 170 kg each, 8.31 lakh bales lower from its previous projection. Coal industry stocks remained in limelight as the total domestic coal production in 2022-23, as of May 31, 2022, is 137.85 MT, which is 28.6 per cent more as compared to the production of 104.83 MT in the same period of last year.

The BSE Sensex is currently trading at 51314.14, down by 46.28 points or 0.09% after trading in a range of 51062.93 and 51614.11. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.22%, while Small cap index was down by 1.98%.

The few gaining sectoral indices on the BSE were FMCG up by 0.82% and Consumer Durables up by 0.04%, while Metal down by 4.36%, Oil & Gas down by 2.59%, Energy down by 2.38%, Basic Materials down by 2.31% and Capital Goods down by 1.94% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 3.21%, HDFC up by 2.77%, HDFC Bank up by 1.50%, Ultratech Cement up by 1.37% and Nestle up by 1.23%. On the flip side, Tata Steel down by 4.63%, Larsen & Toubro down by 1.83%, Reliance Industries down by 1.43%, Tech Mahindra down by 1.26% and Indusind Bank down by 1.21% were the top losers.

Meanwhile, Member of the economic advisory council to the prime minister -- Sanjeev Sanyal has said that the country's internal market is in a good position and its macroeconomic stability is in a comfortable zone despite the ravage by the pandemic. He said that there has been an unprecedented crisis during the two-year-long pandemic and the Indian economy has emerged stronger after that.

He mentioned ‘The policies adopted during the last two years have made the Indian economy emerge stronger. The internal market is in a good position, banking system is much better now compared to the crisis before. The macroeconomic stability is in a comfortable zone.’ Further, he said that the supply side, which went into complete disarray, has improved now and the benefit of getting resources after the introduction of GST has now began to kick in.

Besides, he said India is sitting on huge foreign exchange reserves which can be used when the country needed to. He stated ‘We need to deal with an uncertain future. The uncertainty is so much it has becomes difficult to frame policies at times’. He also said ‘Earlier it was a Newtonian (mechanistic) world ... Equilibrium was a term not related to any economic connotation’. He said India had rightly moved to a market-based economy in 1991 with aspirations to access some optimal equilibrium. But there is no such equilibrium in economies.

The CNX Nifty is currently trading at 15272.00, down by 21.50 points or 0.14% after trading in a range of 15191.10 and 15363.10. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 3.34%, HDFC up by 2.81%, Eicher Motors up by 1.62%, HDFC Bank up by 1.52% and Nestle up by 1.49%. On the flip side, ONGC down by 4.67%, Tata Steel down by 4.60%, Hindalco down by 4.32%, UPL down by 3.21% and JSW Steel down by 2.44% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 318.02 points or 1.22% to 25,644.98, Taiwan Weighted dropped 163.54 points or 1.05% to 15,477.72, KOSPI fell 61.43 points or 2.52% to 2,379.50 and Jakarta Composite lost 48.13 points or 0.69% to 6,888.84.

On the flip side, Shanghai Composite gained 0.90 points or 0.03% to 3,317.69, Straits Times advanced 2.26 points or 0.07% to 3,100.35 and Hang Seng increased 34.16 points or 0.16% to 21,109.16.