Sensex, Nifty trade flat with negative bias

Indian equity benchmarks were trading flat with a negative bias in late morning session, impacted by negative cues from other Asian markets. Traders were worried, amid a private report stating that India’s current account deficit (CAD) may hit a nine-year high in the June quarter of FY23 with the net exports ratio touching 5.3 per cent of gross domestic product (GDP) in the first quarter.

Some concerns also came after another report stated that though investments as a percentage of gross domestic product (GDP) rose year-on-year in the first quarter of 2022-23 (Q1FY23), they are still below the 30 per cent mark that is required to put the economy on a sustained growth path. The street overlooked Reserve Bank data showing that India's services exports increased by 20.2 per cent year-on-year to USD 23.26 billion in July.

On the global front, Asian markets were trading mostly in red, as consumer prices in South Korea were up 5.7 percent on year in August. That was shy of expectations for an increase of 6.1 percent and was down from the 24-year high of 6.3 percent in July. On a monthly basis, consumer prices fell 0.1 percent versus forecasts for an increase of 0.3 percent and down from the 0.5 percent gain in the previous month.

The BSE Sensex is currently trading at 58759.88, down by 6.71 points or 0.01% after trading in a range of 58558.64 and 59108.66. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.38%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.17%, Realty up by 1.06%, Industrials up by 0.93%, Telecom up by 0.79% and Utilities up by 0.63%, while Metal down by 0.71%, Basic Materials down by 0.30%, IT down by 0.22%, TECK down by 0.21% and Energy down by 0.09% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.24%, Larsen & Toubro up by 1.19%, NTPC up by 1.06%, ITC up by 0.88% and Bajaj Finance up by 0.81%. On the flip side, Indusind Bank down by 1.18%, Infosys down by 0.71%, Tata Steel down by 0.61%, ICICI Bank down by 0.56% and Hindustan Unilever down by 0.50% were the top losers.

Meanwhile, the Centre for Monitoring Indian Economy (CMIE) in its latest data has showed that India's unemployment rate surged to a one-year high of 8.3 per cent in August 2022 as employment sequentially fell by 2 million to 394.6 million. During July 2022, the unemployment rate was at 6.8 per cent and the employment was 397 million.

CMIE managing director Mahesh Vyas said the urban unemployment rate is usually higher at about 8 per cent than the rural unemployment rate, which is usually around 7 per cent. In August the urban unemployment rate shot up to 9.6 per cent and rural unemployment rate also increased to 7.7 per cent. He further stated that erratic rainfall affected sowing activities and this is one of the reasons for the increase in unemployment in rural India. The unemployment rate in rural India rose from 6.1 per cent in July to 7.7 per cent in August. More importantly, the employment rate fell from 37.6 per cent to 37.3 per cent.

Vyas said ‘going forward, the rural unemployment rate may come down as delayed monsoon will increase agricultural activities towards the end of the monsoon season. However, it is not clear how the urban unemployment rate will play out in the coming months. Currently, it is quite elevated’.

The CNX Nifty is currently trading at 17537.45, down by 5.35 points or 0.03% after trading in a range of 17476.45 and 17643.85. There were 24 stocks advancing against 25 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were HDFC Life Insurance up by 1.40%, Apollo Hospital Ent. up by 1.36%, Larsen & Toubro up by 1.21%, Mahindra & Mahindra up by 1.15% and NTPC up by 1.06%. On the flip side, Shree Cement down by 1.81%, Hindalco down by 1.80%, ONGC down by 1.67%, BPCL down by 1.33% and Indusind Bank down by 1.02% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 245.87 points or 1.25% to 19,351.44, Taiwan Weighted dropped 128.82 points or 0.87% to 14,673.04, Straits Times trembled 13.22 points or 0.41% to 3,210.86 and Nikkei 225 slipped 10.63 points or 0.04% to 27,650.84. On the flip side, KOSPI rose 5.41 points or 0.22% to 2,421.02, Shanghai Composite gained 8.92 points or 0.28% to 3,193.90 and Jakarta Composite soared 22.18 points or 0.31% to 7,175.28.