Indian markets trade lower in early deals

Indian equity benchmarks made cautious start on Wednesday tracking weakness in global markets. Markets soon turned volatile and struggling for direction ahead of F&O expiry tomorrow. Now, markets are trading lower with cut of around 0.30% each in early deals due to selling in Power, Utilities and TECK stocks. Some cautiousness came in as Standard and Poor’s (S&P) said credit profiles could deteriorate for up to $114 billion of debt in the books of Indian companies tackling rising interest rates and inflation. Traders took note of report that the Sebi has imposed prudential limits on investments by portfolio managers in their own associates or related parties. Though, downside remained capped as Commerce Secretary BVR Subrahmanyam said India's merchandise exports are likely to be around $470-480 billion in the current fiscal against $420 billion in 2021-22. Some support came in as SBI Ecowrap report stated that India's GDP is expected to be much higher in Q1FY23 and growth is expected around 15.7 per cent with a large possibility of an upward bias because several indicators have shown good progress in the Indian economy.

Most of the Asian markets are trading lower following the broadly negative cues from global markets overnight, as traders remain concerned over an economic slowdown and the outlook for interest rates. They remain cautious ahead of the US Fed Chair Jerome Powell's speech at the central bank's annual Jackson Hole economic symposium in Wyoming on Friday, where central bankers across the globe will update their views on inflation and policy outlook.

Back home, aviation industry stocks were in focus as Jyotiraditya Scindia, Union Minister for Civil Aviation said growth opportunities for airlines are tremendous as passenger volume will double from 200 million currently to 400 million over the next seven to 10 years. In stock specific development, ONGC advanced after oil prices surged nearly 4 percent overnight on talk of OPEC+ output cut to support prices. NDTV jumped after the Adani group said it would buy a majority stake in the television news network.

The BSE Sensex is currently trading at 58843.02, down by 188.28 points or 0.32% after trading in a range of 58760.09 and 59113.66. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.07%, while Small cap index was up by 0.57%.

The few gaining sectoral indices on the BSE were Realty up by 1.28%, Telecom up by 0.18%, Healthcare up by 0.10%, while Power down by 1.29%, Utilities down by 1.27%, TECK down by 0.52%, Capital Goods down by 0.49%, Oil & Gas down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.31%, Sun Pharma up by 0.57%, ITC up by 0.54%, NTPC up by 0.47% and Reliance Industries up by 0.32%. On the flip side, Asian Paints down by 1.57%, Titan Company down by 1.30%, Hindustan Unilever down by 1.22%, Larsen & Toubro down by 1.07% and Bharti Airtel down by 1.03% were the top losers.

Meanwhile, ICRA in its latest report has projected India’s Gross Domestic Product (GDP) growth at 13.0% for first quarter (April-June) of current fiscal year (FY23) a sharp jump from the 4.1% in Q4 FY22. It has also projected the year-on-year (YoY) growth of the gross value added (GVA) at basic prices (at constant 2011-12 prices) in Q1 FY23 at 12.6%, a jump from 3.9% recorded in Q4 FY22. Aditi Nayar, Chief Economist, ICRA said ‘the anticipated double-digit GDP expansion in Q1 FY23 benefits from the low base of the second wave of Covid 19 in India in Q1 FY22 as well as the robust recovery in the contact-intensive sectors following the widening vaccination coverage.

As per the report, the sectoral growth in Q1 FY23 to be driven by the services sector (+17-19%; +5.5% in Q4 FY2022), followed by the industry (+9-11%; +1.3%). However, the GVA growth in agriculture, forestry and fishing is projected to decline to around 1.0% in Q1 FY2023 from 4.1% in Q4 FY2022, on account of the adverse impact of the heat wave in several parts of the country, which suppressed wheat output.

The recovery in travel-related services has been upbeat since the onset of FY2023, benefitting from pent-up demand related to corporate travel and increasing confidence for availing leisure services amid the decline in trajectory of Covid-19 infections. Moreover, within transportation, the railway and road sub-sectors are expected to post a healthy recovery in Q1 FY2023, as indicated by the healthy YoY growth in rail freight and GST e-way bills. In addition, other services, which include education, healthcare, recreation, and personal services, are likely to have seen a sharp base effect-led jump in this quarter.

The agency said the Government of India’s (GoI’s) capex, infrastructure/construction output and new project announcements showed encouraging trends in Q1 FY23, along with a robust order book position of construction and capital goods companies and the resilience in housing sales, as evinced by stamp duty collections. However, project completions, states’ capex and capital goods’ output were subdued, suggesting that the recovery in investment demand remained uneven.

The CNX Nifty is currently trading at 17519.00, down by 58.50 points or 0.33% after trading in a range of 17499.25 and 17605.40. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.57%, Indusind Bank up by 1.30%, Apollo Hospital up by 0.74%, ITC up by 0.49% and Sun Pharma up by 0.47%. On the flip side, Divi's Lab down by 1.57%, Asian Paints down by 1.49%, Eicher Motors down by 1.41%, Adani Ports & SEZ down by 1.24% and Titan Company down by 1.17% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 153.70 points or 0.54% to 28,299.05, Straits Times fell 1.22 points or 0.04% to 3,244.99, Hang Seng declined 260.23 points or 1.33% to 19,243.02, Taiwan Weighted lost 19.95 points or 0.13% to 15,075.94, Jakarta Composite weakened 3.14 points or 0.04% to 7,160.13 and Shanghai Composite was down by 45.11 points or 1.38% to 3,231.11, while KOSPI was up by 2.24 points or 0.09% to 2,437.58.