Markets trade lower in early deals amid disappointing GDP numbers

Indian equity benchmarks made gap-down opening on Thursday tracking weakness in global peers. Though, domestic indices trimmed some of their losses but continued to trade in red in early deals with cut of over 0.80% each. The disappointing gross domestic product (GDP) numbers weighted down on investors’ sentiment. India's gross domestic product (GDP) rose 13.5% year-on-year (y-o-y) in the April-June period. Though, it is the fastest annual expansion in a year, it was lower than the predictions made by the Reserve Bank of India (RBI; 16.2 per cent) and other market participants. Traders were concerned as the data of the Department for Promotion of Industry and Internal Trade (DPIIT) showed that Foreign Direct Investment (FDI) equity inflows into India contracted by 6% to $16.59 billion during the April-June quarter this fiscal. Adding more pessimism, the output of India’s eight infrastructure industries decelerated to a six-month low of 4.5% y-o-y in July as compared to a double-digit growth in June. However, markets managed to cut some of their losses taking support with Finance Secretary T V Somanathan’s statement that the government is confident that India’s real gross domestic product (GDP) growth will exceed 7 per cent in 2022-23 (FY23). This will make it the world’s fastest-growing major economy.

On the global front, most of the Asian markets are trading lower following the broadly negative cues from Wall Street overnight, reflecting lingering concerns about higher interest rates and the impact on the global economy as traders digested some hawkish comments from US Fed officials. The renewed COVID-19 induced curbs in China also weighed on market sentiment. Back home, stocks from oil & gas, aviation sectors were in limelight as the government hiked the windfall profit tax on the export of diesel to Rs 13.5 per litre and that on jet fuel exports to Rs 9 per litre. The levy on domestically-produced crude oil too has been increased by Rs 300 per tonne to Rs 13,300. In stock specific developments, Ashok Leyland hit 52-week high after the automaker bagged mega order for 1,400 school buses in UAE. On the other hand, Biocon hit 52-week low after the pharma major received 11 observations from the US heath regulator.

The BSE Sensex is currently trading at 59011.09, down by 525.98 points or 0.88% after trading in a range of 58638.46 and 59154.83. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.37%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Telecom up by 1.31%, Realty up by 0.70%, Industrials up by 0.45%, Auto up by 0.42%, Consumer Discretionary up by 0.29%, while Energy down by 1.45%, Oil & Gas down by 1.44%, IT down by 1.39%, TECK down by 1.22%, Metal down by 1.01% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 3.14%, Asian Paints up by 1.28%, Bharti Airtel up by 1.18%, SBI up by 1.13% and Titan Company up by 0.95%. On the flip side, TCS down by 2.01%, Infosys down by 1.81%, Reliance Industries down by 1.51%, HDFC down by 1.46% and Tech Mahindra down by 1.29% were the top losers.

Meanwhile, with better performance by the agriculture and services sectors, the National Statistical Office (NSO) under Ministry of Statistics and Programme Implementation in its latest data has showed that India's economy grew by 13.5 per cent in the April-June period (first quarter) (Q1) of this fiscal (FY23) -- the fastest in the last four quarters. India remained the fastest growing major economy as China registered economic growth of 0.4 per cent in the April-June 2022 quarter. The Indian economy grew by 20.1 per cent in April-June 2021-22. Though, the first quarter growth at 13.5 per cent is less than the RBI's projection of 16.2 per cent released earlier this month.

As per the data, real GDP or Gross Domestic Product (GDP) at Constant (2011-12) Prices in Q1 2022-23 is estimated to attain a level of Rs 36.85 lakh crore, as against Rs 32.46 lakh crore in Q1 2021-22, showing a growth of 13.5 per cent as compared to 20.1 per cent in Q1 2021-22. The data showed Gross Value Added (GVA) grew by 12.7 per cent to Rs 34.41 lakh crore in April-June this year. The GVA growth in the farm sector is 4.5 per cent in the first quarter compared to 2.2 per cent a year ago. The electricity, gas, water supply and other utility services segment grew by 14.7 per cent in the quarter compared to 13.8 per cent a year ago. Financial, real estate and professional services grew by 9.2 per cent in the first quarter over 2.3 per cent earlier. Public administration, defence and other services posted 26.3 per cent growth against 6.2 per cent in the first quarter of last fiscal.

However, the GVA growth in the manufacturing sector decelerated sharply to 4.8 per cent during the quarter from 49 per cent during the year-ago period. GVA growth in mining is 6.5 per cent in the quarter compared to 18 per cent. The GVA in the construction sector also decelerated to 16.8 per cent in the quarter from 71.3 per cent. GVA growth in the services sector -- trade, hotel, transport, communication and services related to broadcasting -- was 25.7 per cent during the first quarter against 34.3 per cent. Meanwhile, the NSO stated that the Nominal GDP or GDP at Current Prices in Q1 2022-23 is estimated at Rs 64.95 lakh crore against Rs 51.27 lakh crore in Q1 2021-22, showing a growth of 26.7 per cent compared to 32.4 per cent a year ago.

The CNX Nifty is currently trading at 17615.55, down by 143.75 points or 0.81% after trading in a range of 17485.55 and 17649.65. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.87%, Tata Consumer Products up by 1.46%, Asian Paints up by 1.16%, Bharti Airtel up by 1.14% and SBI up by 1.09%. On the flip side, Hindalco down by 2.56%, ONGC down by 2.53%, TCS down by 2.13%, SBI Life Insurance down by 1.90% and Infosys down by 1.84% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 461.90 points or 1.64% to 27,629.63, Hang Seng lost 302.15 points or 1.51% to 19,652.24, Taiwan Weighted plunged 314.18 points or 2.08% to 14,781.26 and KOSPI was down by 45.05 points or 1.82% to 2,427.00. On the other hand, Straits Times rose 0.45 points or 0.01% to 3,222.12, Jakarta Composite added 5.47 points or 0.08% to 7,184.06 and Shanghai Composite was up by 7.73 points or 0.24% to 3,209.87.