Weak trade continues over Dalal Street in late morning session

Weak trade continued over the Dalal Street in late morning session, with both Sensex and Nifty trading in red, on the back of negative cues from other Asian markets. Sentiments remained negative with a private report stating that India's headline retail inflation rate is expected to be 7 percent in June, largely unchanged from 7.04 percent in May, with a sharp pick-up in vegetable prices likely nullifying the impact of the decline in prices of other food items.

On the sectoral front, banks stocks were in focus, amid a private report stating that with increases in lending rates, high credit growth, and lower credit costs, banks are likely to report a significant rise in net interest income (NII) and profits year-on-year (YoY) in the quarter ended June 2022 (Q1FY23). Sequentially, however, they may show flat growth in NII and a drop in the bottom line over the March 2022 quarter (Q4FY22) because treasury profits took a hit due to yields hardening.

On the global front, Asian markets were trading mostly in red, after the value of core machine orders in Japan was down a seasonally adjusted 5.6 percent on month in May, the Cabinet Office said on Monday - coming in at 908.8 billion yen. That just missed expectations for a decline of 5.5 percent following the 10.8 percent spike in April. On a yearly basis, core machine orders climbed 7.4 percent - beating forecasts for 5.8 percent and down from 19.0 percent in the previous month.

The BSE Sensex is currently trading at 54167.40, down by 314.44 points or 0.58% after trading in a range of 54090.53 and 54291.97. There were 13 stocks advancing against 16 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.04%, while Small cap index was up by 0.40%.

The top gaining sectoral indices on the BSE were Power up by 1.94%, Utilities up by 1.90%, Oil & Gas up by 0.74%, Energy up by 0.55% and FMCG up by 0.54%, while TECK down by 3.10%, IT down by 2.83%, Telecom down by 0.92%, Capital Goods down by 0.67% and Industrials down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 2.81%, Mahindra & Mahindra up by 2.19%, Hindustan Unilever up by 0.91%, Titan Co up by 0.87% and Asian Paints up by 0.84%. On the flip side, Bharti Airtel down by 4.78%, TCS down by 4.25%, HCL Tech. down by 3.33%, Infosys down by 2.91% and Tech Mahindra down by 2.29% were the top losers.

Meanwhile, Additional Secretary in the Department of Defence Production (DDP), Sanjay Jaju, has said that India exported defence items and technology worth a record Rs 13,000 crore in 2021-22, an impressive 54.1 per cent rise over the previous year.  He said ‘the exports in 2021-22 were almost eight times of what they were about five years back’.

He said the country's defence exports are chiefly to the US, the Philippines and other countries in the South-East Asia, the Middle-East and Africa.  He noted that India's defence exports were worth Rs 8,434 crore in 2020-21, Rs 9,115 crore in 2019-20 and Rs 2,059 crore in 2015-16. He said ‘there has been good progress. Of course, two years of COVID-19 was a bit of a setback. But this year, we have been able to record this number (of Rs 13,000 crore).’

He said the defence ministry will reward a private sector organisation and another from the public sector that performed the best in defence exports. Generally, he said, private sector companies dominate the defence exports market with a share of almost 90 per cent. He added that last year, Indian public sector companies also did well contributing 30 per cent to the country's defence exports.

The CNX Nifty is currently trading at 16136.10, down by 84.50 points or 0.52% after trading in a range of 16115.50 and 16175.45. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.00%, Dr. Reddy's Lab up by 2.75%, Mahindra & Mahindra up by 2.12%, Divi's Lab up by 1.32% and Coal India up by 1.05%. On the flip side, Bharti Airtel down by 4.77%, TCS down by 4.28%, HCL Tech. down by 3.29%, Infosys down by 2.96% and BPCL down by 2.54% were the top losers.

Asian markets were 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.