Benchmarks continue to trade in red in noon session

Benchmarks continued to trade lower in afternoon session amid selling by funds and retail investors due to lower-than-expected gross domestic product (GDP) data. Among macro-economic data, 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. Some anxiety also came with Reserve Bank data showed India Inc's foreign direct investment in July declined over 50 per cent to $1.11 billion in July 2022. However, downfall remain capped as Collections from Goods and Services Tax (GST) rose 28 per cent to Rs 1.43 lakh crore in August. GST collection has remained over the Rs 1.4 lakh crore mark for the sixth straight month in August. On the global front, Asian markets were trading mostly lower as investor sentiments got dampened with the hawkish outlook on US interest rate.

The BSE Sensex is currently trading at 59007.64, down by 529.43 points or 0.89% after trading in a range of 58638.46 and 59309.79. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.45%, while Small cap index was up by 0.50%.

The top gaining sectoral indices on the BSE were Telecom up by 1.70%, Realty up by 1.18%, Auto up by 0.62%, Industrials up by 0.51% and Consumer Discretionary was up by 0.48%, while IT down by 1.73%, Energy down by 1.53%, TECK down by 1.45%, Oil & Gas down by 1.44% and Metal was down by 1.06% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 3.50%, Asian Paints up by 1.81%, Bharti Airtel up by 1.60%, SBI up by 1.29% and Titan Co was up by 1.15%. On the flip side, TCS down by 2.28%, Infosys down by 2.19%, Hindustan Unilever down by 2.03%, Reliance Industries down by 1.97% and Tech Mahindra was down by 1.77% were the top losers.

Meanwhile, Moody's Investors Service has slashed India's Gross domestic product (GDP) growth projection for 2022 to 7.7 per cent, saying that rising interest rates, uneven monsoon, and slowing global growth will dampen economic momentum on a sequential basis. Moody's had in May projected India's GDP to expand by 8.8 per cent this year. The economy grew by 8.3 per cent in 2021 and contracted by 6.7 per cent in 2020, the year when the pandemic struck the country.

In its update to Global Macro Outlook 2022-23, Moody's said India's central bank is likely to remain hawkish this year and maintain a reasonably tight policy stance in 2023 to prevent domestic inflationary pressures from building further. It expects inflationary pressures to weaken in the second half (July-December) of the year and further in 2023. It said a quicker let-up in global commodity prices would provide significant upside to growth. In addition, economic growth would be stronger than we are projecting in 2023 if the private-sector capex cycle were to gain steam.

Moody's said high-frequency data for the Indian economy shows strong and broad-based underlying momentum in the first four months of fiscal year 2022-23 (April-July). As per official GDP estimates, the Indian economy expanded 13.5 per cent in April-June 2022-23, higher than 4.10 per cent growth clocked in previous March quarter. Moody's said services and manufacturing sectors have seen robust upswings in economic activity, according to hard and survey data, such as PMI, capacity utilization, mobility, tax filing and collection, business earnings and credit indicators.

However, the report said inflation remains a challenge with the RBI having to balance growth and inflation, while also containing the impact of imported inflation from the year-to-date depreciation of the Indian rupee against the US dollar of around 7 per cent. India's economic growth before the COVID-19 shock had materially slowed because of the impact of corporate-sector deleveraging on business investment. With the deleveraging complete, corporate-sector investment is showing early signs of a pickup, which could provide support to a continued business cycle expansion through several quarters, supported by investment-friendly government policies and the rapid digitization of the economy.

The CNX Nifty is currently trading at 17609.35, down by 149.95 points or 0.84% after trading in a range of 17485.55 and 17695.60. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 3.48%, Tata Consumer Products up by 2.26%, Asian Paints up by 1.77%, Bharti Airtel up by 1.60% and Grasim Industries was up by 1.31%. On the flip side, ONGC down by 2.74%, Hindalco down by 2.62%, TCS down by 2.34%, Infosys down by 2.15% and SBI Life Insurance was down by 2.07% were the top losers.

Asian markets were trading mostly lower; Hang Seng decreased 344.14 points or 1.72% to 19,610.25, Nikkei 225 slipped 430.06 points or 1.53% to 27,661.47, Taiwan Weighted dropped 293.58 points or 1.94% to 14,801.86, KOSPI fell 56.44 points or 2.28% to 2,415.61 and Shanghai Composite was down by 7.90 points or 0.25% to 3,194.24.

On the flip side, Straits Times advanced 0.35 points or 0.01% to 3,222.02 and Jakarta Composite was up by 3.66 points or 0.05% to 7,182.25.