Benchmarks end lower on global sell-off

Indian benchmark indices ended the Monday’s trade deep in red terrain with frontline gauges settling below their crucial 58,000 (Sensex) and 17,350 (Nifty) levels, amid global sell off. Sentiments remained dampened since beginning as key gauges made a gap-down start. Investors’ sentiments took a hit as the Reserve Bank of India (RBI) data showed that the country's foreign exchange reserves fell $6.687 billion to $564.053 billion in the week ended August 19. In the previous week ended August 12, the reserves declined $2.238 billion to $570.74 billion. Traders were worried as Reserve Bank of India (RBI) Deputy Governor Michael Debabrata Patra has said that in the near-term, inflation trajectory continues to be ‘heavily contingent’ upon the evolving geopolitical developments, international commodity prices and global financial sector developments.

Sentiments also got hurt with the Ministry of Statistics and Programme Implementation in its latest report for July 2022 has said that as many as 386 infrastructure projects, each entailing an investment of Rs 150 crore or more, have been hit by cost overruns of more than Rs 4.7 lakh crore. According to the Ministry, which monitors infrastructure projects of Rs 150 crore and above, out of 1,505 projects, 386 reported cost overruns and as many as 661 projects were delayed. Some concern also came as exchange data showed foreign institutional investors (FIIs) were net sellers in the capital market as they offloaded shares worth Rs 51.12 crore on Friday. Market participants paid no heed towards Finance Minister Nirmala Sitharaman’s statement that the Indian economy will grow at 7.4 per cent in this fiscal (FY23) and continue at the same level in the next fiscal as well. She added the International Monetary Fund and the World Bank have projected India’s growth to be the fastest for the next two fiscal years, and their estimates are in sync with that of the Reserve Bank of India as well.

On the global front, Asian markets settled mostly lower on Monday after the head of the U.S. Federal Reserve indicated high interest rates will continue for some time to curb inflation. Fed Chair Jerome Powell on Friday pledged that the central bank will use all tools forcefully to attack inflation, dashing hopes the central bank would soften its rate hike stance to support growth. European markets were trading lower as traders priced in a 75-basis point Fed rate hike in September, taking the rate to a range of 3.75- 4 percent by the end of the year.

Finally, the BSE Sensex fell 861.25 points or 1.46% to 57,972.62 and the CNX Nifty was down by 246.00 points or 1.40% to 17,312.90.

The BSE Sensex touched high and low of 58,208.30 and 57,367.47, 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 0.80%, while Small cap index was down by 0.57%.

The few gaining sectoral indices on the BSE were FMCG up by 0.35%, Oil & Gas up by 0.19% and Energy up by 0.08%, while IT down by 3.34%, TECK down by 3.14%, Bankex down by 1.87%, Metal down by 1.69% and Realty down by 1.30% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.30%, Asian Paints up by 0.61%, Nestle up by 0.52%, ITC up by 0.24% and Mahindra & Mahindra up by 0.20%. On the flip side, Tech Mahindra down by 4.57%, Infosys down by 3.93%, Wipro down by 3.06%, HCL Technologies down by 2.98% and TCS down by 2.73% were the top losers.

Meanwhile, Ahead of release of Q1FY23 GDP figures, Union Finance Minister Nirmala Sitharaman has said the Indian economy will grow at 7.4 per cent in this fiscal (FY23) and continue at the same level in the next fiscal as well. She added the International Monetary Fund and the World Bank have projected India’s growth to be the fastest for the next two fiscal years, and their estimates are in sync with that of the Reserve Bank of India as well.

She highlighted that the global situation continues to be challenging and it is not the right time to throw caution to the winds as yet. She said the export sector will face difficulties as the global growth slows down and the government will work with such entities facing the headwinds.

Meanwhile, underlining that there is a need for a rigorous debate on freebies, she said that political parties making pre-poll promises should make budgetary provisions for taking care of the expenditures and not push the burden on to other entities. She said power discoms and generating companies have been seen to bear the brunt of such freebies as they get paid in part or in some cases not at all, despite having no role to play in the announcements.

The CNX Nifty traded in a range of 17,380.15 and 17,166.20. There were 12 stocks advancing against 38 stocks declining on the index.   

The top gainers on Nifty were Britannia Industries up by 1.67%, Maruti Suzuki up by 1.31%, Nestle up by 0.94%, Coal India up by 0.63% and Asian Paints up by 0.62%. On the flip side, Tech Mahindra down by 4.56%, Infosys down by 3.82%, Wipro down by 2.89%, Kotak Mahindra Bank down by 2.74% and HCL Technologies down by 2.73% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 52.43 points or 0.7% to 7,427.31, France’s CAC decreased 99.97 points or 1.59% to 6,174.29 and Germany’s DAX decreased 158.33 points or 1.22% to 12,813.14.

Asian markets settled mostly lower on Monday tracking weakness in US stocks, while US dollar index touched a 20-year high after US Federal Reserve Chairman Jerome Powell indicated high interest rates would continue for some time to curb inflation. Powell’s hawkish comments have raised chances of another 75-basis points interest rate hike for the third straight month in its upcoming September 20 - 21 policy meeting, taking the rate to a range of 3.75 - 4 percent by the end of the year. Although, Chinese shares gained as the Chinese currency yuan weakened against the US dollar. Official Chinese data showed that profits of China industrial firms had fallen by 1.1 percent from January to July, from a year earlier.