Markets trade lower in early deals after cautious start

Indian equity benchmarks made cautious start on Monday amid weakness in Asian peers. Markets are trading lower in early deals due to selling in Metal, TECK and IT stocks. Investors await cues from the quarterly earnings season, with TCS all set to unveil its financial results later in the week. Traders were concerned with continued FIIs selling. In June, FPIs sold equity worth Rs 50,145 crore through the stock market, taking the total FPI selling in CY 22 to Rs 2,23,944 crore. Some cautiousness also came in with a private report that about 10 states in India have detected a new sub-variant of Omicron BA.2.75, which may be alarming in nature. However, down side remained capped as traders took some support with  Finance Minister Nirmala Sitharaman's statement that GST collections in June witnessed a 56 per cent year-on-year rise to over Rs 1.44 lakh crore, as she exhorted tax officers to ensure the system is so transparent that even an iota of discretion is not there. The gross GST collection in June is the second-highest collection after April when it was about Rs 1.68 lakh crore.

On the global front, Asian markets are trading mostly despite the broadly positive cues from the Wall Street on Friday, as traders remain concerned about a global recession as major central banks signaled their intent to move ahead with aggressive rate hikes to tame surging inflation. Back home, power stocks were in focus as total outstanding dues owed by electricity distribution companies (discoms) to power producers rose by 4 per cent year-on-year to Rs 1,32,432 crore in June 2022. In stock specific development, Avenue Supermarts (DMart) rose as it reported a standalone revenue of Rs 9,806.89 crore in Q1FY23, up 94.9 per cent from Rs 5,031.75 crore reported in the same quarter last year.

The BSE Sensex is currently trading at 52758.44, down by 149.49 points or 0.28% after trading in a range of 52709.89 and 53067.49. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index added 0.06%, while Small cap index was up by 0.24%.

The top gaining sectoral indices on the BSE were FMCG up by 0.49%, Power up by 0.30%, Utilities up by 0.23%, Bankex up by 0.14%, Realty up by 0.07%, while Metal down by 2.32%, TECK down by 0.82%, IT down by 0.78%, Oil & Gas down by 0.75%, Basic Materials down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.62%, Power Grid up by 0.77%, ITC up by 0.72%, ICICI Bank up by 0.51% and Sun Pharma up by 0.50%. On the flip side, Tata Steel down by 2.44%, TCS down by 1.45%, HDFC down by 1.27%, Mahindra & Mahindra down by 1.20% and Wipro down by 1.10% were the top losers.

Meanwhile, asserting that Indian currency has performed relatively better than others against dollar, Finance Minister Nirmala Sitharaman said the government is watchful and mindful of the impact of falling rupee on the country's imports. Depreciation of rupee makes India's imports costlier, while on the other hand exports become attractive.

She said ‘the Reserve Bank of India is very keenly watching the exchange rate. We are not alone in this world. We are also open as an economy... the rupee against the dollar and other currencies versus the dollar, the rupee has performed relatively better’. Admitting that falling rupee would impact immediately on imports, which will become expensive, she said ‘that is one thing I am very watchful and mindful of because a lot of our industries do depend on some essential goods to be imported upon for their production’.

Emerging market currencies have been falling against the dollar amid geopolitical tensions in the wake of the Russia-Ukraine war, concerns over growth, high global crude prices, sustained inflation and central banks worldwide adopting hawkish monetary policy approach. The rupee hit its all-time low of 79.12 against dollar during the intra-day trade but recovered to close at 78.94 (provisional) against the greenback on July 01.

The CNX Nifty is currently trading at 15697.25, down by 54.80 points or 0.35% after trading in a range of 15680.85 and 15797.45. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 3.73%, Power Grid up by 0.77%, Hero MotoCorp up by 0.75%, Britannia Industries up by 0.75% and ITC up by 0.72%. On the flip side, JSW Steel down by 4.86%, ONGC down by 3.05%, Tata Steel down by 2.40%, Hindalco down by 2.27% and BPCL down by 1.54% were the top losers.

Asian markets are trading mostly lower; Hang Seng slipped 127.30 points or 0.58% to 21,732.49, Taiwan Weighted lost 88.01 points or 0.61% to 14,255.07, KOSPI fell 17.92 points or 0.78% to 2,287.50 and Jakarta Composite was down by 189.91 points or 2.80% to 6,604.42. On the other hand, Nikkei 225 rose 132.21 points or 0.51% to 26,067.83, Straits Times added 26.79 points or 0.87% to 3,122.38 and Shanghai Composite was up by 4.58 points or 0.14% to 3,392.22.