Benchmarks remain in red in morning deals

Indian equity benchmarks remained in red in morning deals, amid heavy selling in Power, Utilities and Auto counters, and weak trend in Asian markets. Traders remained cautious with private report stated that after three consecutive quarters of raising more than $10 billion, the total funding in the Indian startup ecosystem fell by 40 percent during Q2 CY22 to reach $6.8 billion. The decline can be attributed to a global slowdown, decrease in tech stock valuations, inflation and geopolitical instability. Some concern also came as exchange data showed foreign institutional investors (FIIs) remained net sellers on Friday, offloading shares worth Rs 109.31 crore. Traders also took a note of Prime Minister Narendra Modi’s statement that real growth was not possible without inclusiveness as he listed out various measures taken by his government during the last eight years to ensure that benefits of growth reach all sections of the society.

On the global front, Asian markets are trading mostly in red, as a cautious undertone prevailed as Treasury yields climbed after the release of upbeat U.S. jobs data. Back home, agriculture industry related stocks remained in focus as he agriculture ministry data showed the area under coverage for paddy declined 24 per cent to 72.24 lakh hectares so far in the ongoing Kharif sowing season, while oilseeds acreage is lower by 20 per cent at 77.80 lakh hectares because of delay in the progress of monsoon rains in some parts of India.

The BSE Sensex is currently trading at 54233.21, down by 248.63 points or 0.46% after trading in a range of 54090.53 and 54291.97. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.14%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Power up by 2.41%, Utilities up by 2.34%, Auto up by 0.60%, FMCG up by 0.59% and Consumer discretionary up by 0.59%, while TECK down by 2.90%, IT down by 2.71%, Telecom down by 0.34% and Capital Goods down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 2.48%, Dr. Reddy's Lab up by 2.13%, NTPC up by 1.18%, Titan Company up by 1.15% and ICICI Bank up by 1.09%. On the flip side, TCS down by 4.47%, Bharti Airtel down by 4.30%, HCL Technologies down by 2.67%, Infosys down by 2.58% and Tech Mahindra down by 2.46% were the top losers.

Meanwhile, Former Securities and Exchange Board of India (SEBI) chief Ajay Tyagi has stressed on the need for developing a low- and medium-rated corporate bond market. The move that will help more number of issuers across the rating spectrum to tap into it as an alternative to bank financing. Apart from the bond market, he focused on two broad areas -- use of technology and ESG investing, which is no longer just a fad or a buzzword.

Although he said the corporate bond market has grown in recent years, its success has remained limited to higher rated papers. As of now, 95 per cent of issuance is concentrated in top 3 rating categories -- AAA, AA+ and AA. Similarly, 97 per cent of trading is in these top three rating categories.

For the development of the bond market, he suggested that the government and regulators should immediately implement measures like backstop facility for purchase of debt securities, credit enhancement mechanism and setting up a Development Financial Institution (DFI) for debt financing of infrastructure. He stated these measures, which have been in the pipeline for quite some time, need to be implemented by the government and regulators without further delay. He also advocated for unifying the regulatory regime for government securities (G-Secs) and corporate bonds -- both for issuance and trading.

The CNX Nifty is currently trading at 16159.75, down by 60.85 points or 0.38% after trading in a range of 16115.50 and 16175.45. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.41%, ONGC up by 2.30%, Dr. Reddy's Lab up by 2.17%, Coal India up by 1.90% and Eicher Motors up by 1.34%. On the flip side, TCS down by 4.51%, Bharti Airtel down by 4.34%, HCL Technologies down by 2.72%, Infosys down by 2.59% and Tech Mahindra down by 2.55% were the top losers.

Asian markets are trading mostly in red; Hang Seng decreased 595.11 points or 2.74% to 21,130.67, Taiwan Weighted dropped 82.97 points or 0.57% to 14,381.56, Shanghai Composite declined 48.85 points or 1.46% to 3,307.23, Jakarta Composite lost 21.68 points or 0.32% to 6,718.54 and KOSPI fell 2.22 points or 0.09% to 2,348.39.

On the flip side, Nikkei 225 surged 328.46 points or 1.24% to 26,845.65.