Domestic indices trade lower in early deals

Indian equity benchmarks made gap-down opening on Wednesday tracking lackluster global cues coupled with surge in crude oil prices overnight. Markets are trading lower with over half a percent cut in early deals as continued selling in FIIs weighted on market sentiments. Foreign institutional investors (FIIs) sold shares worth a net Rs 1,244.44 crore on June 28. Some cautiousness came in with a private report that after a gap, the prices of select varieties of pulses have started rising for the past few days due to a delay in the onset of the southwest monsoon over major growing regions of Madhya Pradesh, Maharashtra, and Gujarat. Meanwhile, a Niti Aayog report has underlined the need for technological improvisation and other incentives to promote electric two-wheeler in the country.

On the global front, most of the Asian markets are trading lower following the broadly negative cues overnight from Wall Street, after weak US consumer confidence data stoked fear among investors about the risk that higher interest rates and persistent inflation could trigger a recession. Meanwhile, the value of retail sales in Japan was up 3.6 percent on year in May, the Ministry of Economy, Trade and Industry said - coming in at 12.388 trillion yen.

Back home, sugar stocks were in focus with a private report that India is considering allowing mills to ship out stocks of raw sugar that have piled up in ports and warehouses. In stock specific movement, J&K Bank rose as it board approved the proposal to raise up to Rs 2,000 crore, via a mix of debt and equity, in the current fiscal 2022-23.

The BSE Sensex is currently trading at 52766.77, down by 410.68 points or 0.77% after trading in a range of 52612.68 and 52777.11. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.16%, while Small cap index was down by 0.41%.

The top losing sectoral indices on the BSE were Consumer Durables down by 1.37%, Bankex down by 1.22%, Realty down by 1.00%, FMCG down by 0.97%, PSU down by 0.82%, while there was no loser on the BSE sectoral front.

The few gainers on the Sensex were Dr. Reddy's Lab up by 0.38%, Tata Steel up by 0.34%, Nestle up by 0.28% and Ultratech Cement up by 0.20%. On the flip side, Indusind Bank down by 3.29%, Bajaj Finserv down by 2.40%, Hindustan Unilever down by 2.37%, Titan Company down by 1.96% and Bajaj Finance down by 1.84% were the top losers.

Meanwhile, rating agency ICRA in its latest report titled ‘State Government Finances- Weekly SDL’ has said that market borrowings by 18 state governments/Union Territory (UT) stood at Rs 1,102 billion in Q1 FY2023, nearly 42% lower than the indicated Rs 1,902 billion. On a Y-o-Y basis, the borrowings in Q1 FY2023 were 23.7% lower than Rs 1,446 billion in Q1FY2022.

ICRA said this reflected a comfortable cash flow position of the state governments led by a highly back-ended release of the tax devolution to the states in FY2022 as well as the changes in the borrowing permission for FY2023 granted by the Government of India (GoI) to the state governments.

In the last auction of Q1 FY2023, nine states raised Rs 195 billion through state development loans (SDLs) on June 28, 2022, nearly 4% higher than the indicated amount of Rs 188 billion for the week. Andhra Pradesh (AP) and Telangana together borrowed additional Rs 30 billion and Assam, Haryana and Madhya Pradesh (MP) raised Rs 70 billion SDLs even though they had not indicated to participate in weekly auction.

The CNX Nifty is currently trading at 15741.95, down by 108.25 points or 0.68% after trading in a range of 15687.80 and 15744.85. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 0.75%, Shree Cement up by 0.53%, Nestle up by 0.41%, Ultratech Cement up by 0.35% and Bajaj Auto up by 0.25%. On the flip side, Indusind Bank down by 2.92%, Hindustan Unilever down by 2.31%, Bajaj Finserv down by 1.98%, Titan Company down by 1.89% and Divi's Lab down by 1.72% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 plunged 321.59 points or 1.19% to 26,727.88, Hang Seng slipped 358.01 points or 1.60% to 22,060.96, Taiwan Weighted declined 171.90 points or 1.11% to 15,268.02, KOSPI lost 39.00 points or 1.61% to 2,383.09, Jakarta Composite fell 16.22 points or 0.23% to 6,980.24 and Shanghai Composite was down by 26.16 points or 0.77% to 3,383.05. On the other hand, Straits Times rose 11.47 points or 0.37% to 3,151.68.