Sluggish trend continues on street

Indian equity benchmarks continued their lackluster trade in afternoon session, amid negative signals from other Asian markets, with Sensex and Nifty trading below 55,700 and 16,600, respectively. Broader indices also weakened further denting investors' sentiment, with the midcap and smallcap indices down 0.23 percent and 0.17 percent, respectively. Sentiments were dampened as India's foreign exchange (forex) reserves slumped by $7.541 billion to $572.712 billion for the week ended July 15, the lowest level in 20 months, as the Reserve Bank of India (RBI) likely used its war chest to defend the rupee, which recently dipped below 80 against a dollar. This is the second consecutive week of the sharp drop in the country's forex reserves. Additional pressure came with a private report stating that the consumer IT spending in the Asia-Pacific region, already taking the brunt in the ongoing tight market conditions, is set to further slide in 2023, depending on the severity of the economic slowdown. The risk of recession worldwide has continued to rise amid increasing inflation and the expectation of a tightening monetary policy.

On the global front, Asian markets were trading mostly in red as in upcoming Federal Reserve meet, US central bank is widely expected to hike borrowing costs by 75 basis points. Back home, in scrip specific development, Active Clothing Company hit new 52-week high on signing agreement with Shima Seiki Mfg, and Navin Fluorine International traded jubilantly on reporting 33% rise in Q1 consolidated net profit.

The BSE Sensex is currently trading at 55664.55, down by 407.68 points or 0.73% after trading in a range of 55537.08 and 56018.09. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.23%, while Small cap index was down by 0.17%.

The top gaining sectoral indices on the BSE were Metal up by 0.87%, Capital Goods up by 0.60%, Industrials up by 0.28%, Utilities up by 0.22% and Power was up by 0.11%, while Energy down by 1.49%, Auto down by 1.30%, Oil & Gas down by 1.05%, Realty down by 0.89% and Healthcare was down by 0.73% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.46%, Indusind Bank up by 1.24%, Bharti Airtel up by 0.97%, Asian Paints up by 0.88% and Larsen & Toubro was up by 0.73%. On the flip side, Reliance Industries down by 3.16%, Ultratech Cement down by 2.50%, Mahindra & Mahindra down by 2.45%, Kotak Mahindra Bank down by 1.94% and Maruti Suzuki was down by 1.62% were the top losers.

Meanwhile, The Department of Telecom (DoT) has floated a consultation paper on the revamp of telecom rules mainly to keep pace with the change in technology like 5G, simplify laws and promote investments. The new rules will not be applicable with retrospective effect to cause any adverse impact on the relevant entity.

According to the consultation paper, a new law on telecommunication needs to aim at establishing an enabling future-ready framework for the development of telecommunication sector and deployment of new technologies. Such a law needs to consolidate the existing laws governing telecommunication sector, while keeping in view global best practices. The government has proposed that the new framework should be drafted in a plain and simple language so that any citizen is able to understand the rules. The proposed law is envisaged to provide adequate provisions to ensure regulatory certainty and promote investment. This would mean continuity of licenses and authorizations under the old regime. 

The paper further said to minimize policy disruption, such a law needs to provide for continuation of rules, guidelines, administrative orders issued under the existing regime until superseded by new rules.  Furthermore, a new law needs to ensure that the terms and conditions will not be modified with retrospective effect to the detriment of the relevant entity. The proposal has come at a time when the country is gearing up to start a spectrum auction for rolling out 5G services.

The CNX Nifty is currently trading at 16599.45, down by 120.00 points or 0.72% after trading in a range of 16564.25 and 16706.05. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.47%, Asian Paints up by 0.90%, Indusind Bank up by 0.88%, Bharti Airtel up by 0.86% and Hindalco was up by 0.85%. On the flip side, Reliance Industries down by 3.19%, ONGC down by 2.87%, Mahindra & Mahindra down by 2.63%, Ultratech Cement down by 2.49% and Grasim Industries was down by 2.44% were the top losers.

Asian market were trading mostly in red; Jakarta Composite lost 14.56 points or 0.21% to 6,872.40, Taiwan Weighted dropped 13.03 points or 0.09% to 14,936.33, Nikkei 225 slipped 215.41 points or 0.77% to 27,699.25, Hang Seng decreased 49.08 points or 0.24% to 20,560.06 and Shanghai Composite was down by 14.17 points or 0.43% to 3,255.80.

On the flip side, Straits Times advanced 3.15 points or 0.1% to 3,184.49 and KOSPI was up by 14.17 points or 0.59% to 2,407.31.