Local equities continue to sink in red in morning session

Local equities continued their weak trade in the morning session on account of selling in frontline counters. The markets have drifted below the psychological 55,500 (Sensex) and 16,550 (Nifty) levels. Sentiments got undermined with Minister of State for Finance Pankaj Chaudhary’s statement that the Central government's total liabilities are seen rising to Rs 155.33 lakh crore in FY23. This would represent an increase of 12 percent over the FY22 figure of Rs 138.88 lakh crore. The Centre is set to borrow a record Rs 14.95 lakh crore on a gross basis from the market through the issuance of bonds in FY23. Traders overlooked Commerce Minister Piyush Goyal’s statement that with strong gross domestic product (GDP) growth, the country is on the path to become a $30 trillion economy in the next 30 years. He added that the country is currently $3-3.5 trillion economy and soon will achieve $5 trillion.

On the global front, Asian markets are trading mostly in green as investors braced for another sharp interest rate hike by the Federal Reserve to cool inflation. Back home, select diamond industry’s stocks were in focus as Crisil Ratings’ report stated that India's diamond industry is likely to witness 15-20 per cent decline in revenue in this financial year due to falling demand and rising prices of rough gemstone globally.

The BSE Sensex is currently trading at 55392.05, down by 374.17 points or 0.67% after trading in a range of 55343.97 and 55834.38. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.58%, while Small cap index was down by 0.58%.

The top gaining sectoral indices on the BSE were Power up by 0.30%, Utilities up by 0.29% and Energy up by 0.01%, while IT down by 2.21%, TECK down by 1.90%, FMCG down by 1.04%, Capital Goods down by 0.92% and Bankex down by 0.90% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.29%, Power Grid Corporation up by 1.42%, Reliance Industries up by 0.67%, Mahindra & Mahindra up by 0.65% and Sun Pharma up by 0.63%. On the flip side, Infosys down by 2.63%, Dr. Reddy's Lab down by 2.57%, Nestle down by 2.56%, Axis Bank down by 1.95% and Hindustan Unilever down by 1.92% were the top losers.

Meanwhile, Minister of State for Defence Ajay Bhatt has said that India has received around Rs 494 crore of foreign direct investment (FDI) in the defence sector since revising the policy relating to it in September 2020. In the last few years, the government has taken a series of measures to boost domestic defence manufacturing.

In 2020, the government announced increasing the foreign direct investment (FDI) limit from 49 per cent to 74 per cent under the automatic route and up to 100 per cent through the government route in the defence sector. Besides, Bhatt said in order to promote 'Make in India' in the defence sector, the government has issued 584 defence licenses to 358 private companies for setting up of manufacturing units, including 107 licenses for weapon manufacturing.

India is one of the largest importers of arms globally. According to estimates, the Indian armed forces are projected to spend around $130 billion in capital procurement in the next five years. The government now wants to reduce dependence on imported military platforms and has decided to support domestic defence manufacturing.

The CNX Nifty is currently trading at 16515.75, down by 115.25 points or 0.69% after trading in a range of 16505.60 and 16636.10. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.22%, Power Grid Corporation up by 1.32%, ONGC up by 1.00%, Mahindra & Mahindra up by 0.83% and Reliance Industries up by 0.62%. On the flip side, Infosys down by 2.73%, Dr. Reddy's Lab down by 2.69%, Nestle down by 2.57%, Hindustan Unilever down by 2.19% and Axis Bank down by 1.99% were the top losers.

Asian markets are trading mostly in green; Hang Seng increased 297.28 points or 1.45% to 20,860.22, Shanghai Composite gained 19.43 points or 0.6% to 3,269.82, Jakarta Composite soared 19.25 points or 0.28% to 6,877.66, Straits Times advanced 8.58 points or 0.27% to 3,189.05 and KOSPI rose 8.17 points or 0.34% to 2,411.86.

On the flip side, Nikkei 225 slipped 61.86 points or 0.22% to 27,637.39 and Taiwan Weighted dropped 163.55 points or 1.09% to 14,772.78.