Benchmarks end lower for second consecutive session

Falling for the second day running, Indian equity benchmarks ended with losses of around a percent on Tuesday, ahead of earnings reports from several large-cap companies, with investors also bracing for a likely sharp interest rate hike in the United States this week.  Key gauges made a weak start and stayed in red for whole day, as traders got anxious with Minister of State for Finance Pankaj Chaudhary’s statement that 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. Some concern also came as foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 844.78 crore, data available with NSE suggested.

However, in the afternoon deals, key indices managed to trim some losses, as traders took some support with a private report stating that India is poised to be the fastest-growing major economy in the world and an engine of global growth despite global headwinds.  Some optimism also came with 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. But, markets failed to hold recovery and fell sharply in late afternoon deals, as some pessimism remained among traders with private report that while the monsoon in India is tracking at 11% above normal, the distribution is uneven across the country and could pose a threat to this year’s foodgrain production and may worsen the inflation outlook.

European markets were trading mostly in red as investors braced for a busy week of corporate earnings and a policy meeting of the U.S. Federal Reserve, with economists expecting a 75-bps point hike to combat inflation. Asian markets settled mostly higher on Tuesday following the mostly positive cues from Wall Street, as investors largely stayed cautious ahead of some key earnings updates, US GDP data and the US Federal Reserve's monetary policy announcement on Wednesday. News of new Covid-19 cases in China dropping to the lowest level in more than a week aided market sentiment.

European markets were trading mostly in red as investors braced for a busy week of corporate earnings and a policy meeting of the U.S. Federal Reserve and 75-bps point hike to combat inflation. Asian markets settled mostly higher on Tuesday following the mostly positive cues from Wall Street, as investors largely stayed cautious ahead of some key earnings updates, US GDP data and the US Federal Reserve's monetary policy announcement on Wednesday. News of new Covid-19 cases in China dropping to the lowest level in more than a week aided market sentiment.

Finally, the BSE Sensex fell 497.73 points or 0.89% to 55,268.49 and the CNX Nifty was down by 147.15 points or 0.88% to 16,483.85. 

The BSE Sensex touched high and low of 55,834.38 and 55,203.43, respectively. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell by 1.21%, while Small cap index was down by 1.20%.

The top losing sectoral indices on the BSE were IT down by 2.84%, TECK down by 2.23%, FMCG down by 1.32%, Capital Goods down by 1.28% and Consumer Durables down by 1.22%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Bajaj Finserv up by 5.58%, Bharti Airtel up by 0.83%, Power Grid Corporation up by 0.53%, Bajaj Finance up by 0.46% and ITC up by 0.43%. On the flip side, Infosys down by 3.40%, Axis Bank down by 3.00%, Hindustan Unilever down by 2.84%, Dr. Reddy's Lab down by 2.78% and Wipro down by 2.28% 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 traded in a range of 16,636.10 and 16,463.30. There were 11 stocks advancing against 38 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Bajaj Finserv up by 5.33%, JSW Steel up by 1.76%, Grasim Industries up by 1.10%, Bharti Airtel up by 0.68% and Power Grid Corporation up by 0.63%. On the flip side, Infosys down by 3.51%, Hindustan Unilever down by 3.08%, Axis Bank down by 2.88%, Dr. Reddy's Lab down by 2.74% and Kotak Mahindra Bank down by 2.37% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 40.98 points or 0.66% to 6,196.57 and Germany’s DAX decreased 145.19 points or 1.1% to 13,065.13, while UK’s FTSE 100 increased 26.91 points or 0.37% to 7,333.21.

Asian markets settled mostly higher on Tuesday. Chinese shares gained as real estate developers rallied further on reports that Beijing was planning to set up a fund to aid the troubled industry. Hong Kong shares rose after Chinese tech giant Alibaba Group announced plans to change the status of its Hong Kong-traded shares to make them more accessible to mainland Chinese buyers. However, Japanese shares declined following the mixed cues from Wall Street overnight ahead to a week of Big Tech earnings and a crucial interest rate decision from the United States. The minutes of Bank of Japan's June meeting cited the need to watch the impact of financial and forex market moves on the economy and prices.