Benchmarks continue trade lower in morning deals

Indian equity benchmarks continued trade lower in morning deals, dragged down by index majors Bharti Airtel, Indusind Bank and Tech Mahindra amid weak global market trends. Sentiments remained down-beat as domestic ratings agency Icra said India's current account deficit (CAD) will widen to 5 per cent of the GDP in the September quarter due to higher merchandise trade deficit. The trade deficit has doubled to $28.7 billion for August due to a 36.8 per cent expansion in imports and a 1.2 per cent decline in export earnings. Traders overlooked Commerce and Industry Minister Piyush Goyal’s statement that India's goods and services exports have already crossed $675 billion in the last fiscal year and the country is now aspiring to take international trade to $ 2 trillion by 2030. Meanwhile, the Union Finance Ministry released the sixth monthly instalment of Post Devolution Revenue Deficit (PDRD) grant of Rs 7,183.42 crore to 14 states. The grant has been released as per the recommendations of the 15th Finance Commission.

On the global front, the Asian markets are trading in red as investors took no cheer from strong U.S. economic data and as weaker-than-expected Chinese trade numbers pressed the yuan lower. China's exports growth slowed in August, as surging inflation crimped overseas demand and fresh COVID curbs and heatwaves disrupted production, reviving downside risks for the economy. According to official customs data, exports were up 7.1% in August on a year earlier, slowing from an 18.0% gain seen in July.

The BSE Sensex is currently trading at 58895.40, down by 301.59 points or 0.51% after trading in a range of 58722.89 and 58970.68. 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 0.29%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Telecom up by 0.71%, Basic Materials up by 0.57%, FMCG up by 0.40%, Consumer Durables up by 0.18% and PSU up by 0.17%, while TECK down by 0.66%, IT down by 0.64%, Bankex down by 0.59%, Auto down by 0.57% and Metal down by 0.51% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 2.62%, Nestle up by 0.92%, Asian Paints up by 0.50%, Bajaj Finserv up by 0.30% and Hindustan Unilever up by 0.29%. On the flip side, Bharti Airtel down by 1.54%, Indusind Bank down by 1.49%, Tech Mahindra down by 1.33%, HCL Technologies down by 1.32% and Reliance Industries down by 0.91% were the top losers.

Meanwhile, Domestic ratings agency Icra in its note has said that India's current account deficit (CAD) will widen to 5 per cent of the Gross domestic product (GDP) in the September quarter of current fiscal (Q2FY23) due to higher merchandise trade deficit. The trade deficit has doubled to USD 28.7 billion for August due to a 36.8 per cent expansion in imports and a 1.2 per cent decline in export earnings.

It mentioned ‘The current account deficit (CAD) is projected to widen to an all-time high of USD 41-43 billion in Q2 FY23 from the USD 30 billion expected in Q1 FY23. It is expected to widen to 5 per cent of GDP in Q2 FY23, the second highest level since Q3FY12.’ It stated for the first two months of the quarter, the monthly average trade deficit has trended higher at USD 29.3 billion as against USD 23.5 billion in the June quarter, driven by strong domestic demand which led to a surge in the imports while exports remained subdued amid international slowdown fears.

Further, CAD will moderate to 2.7 per cent of GDP in the second half of the fiscal, benefitting from lower commodity prices and seasonally stronger exports, it said, adding that a potential recession in major economies may dampen growth in merchandise and services exports in H2 FY23 as well. Moreover it said, overall, the CAD is projected to widen to an all-time high of USD 120 billion (3.5 per cent of GDP) in FY23 from USD 38.7 billion (1.2 per cent of GDP) in FY22. It added that the gap will be lower than the 4.8 per cent witnessed in FY13.

The CNX Nifty is currently trading at 17581.10, down by 74.50 points or 0.42% after trading in a range of 17484.30 and 17593.80. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Shree Cement up by 4.19%, Ultratech Cement up by 3.02%, Coal India up by 1.42%, Nestle up by 0.94% and UPL up by 0.53%. On the flip side, Bharti Airtel down by 1.54%, Indusind Bank down by 1.52%, Tata Motors down by 1.47%, Tech Mahindra down by 1.38% and Bajaj Auto down by 1.31% were the top losers.

All the Asian markets are trading in red; Hang Seng decreased 332.35 points or 1.73% to 18,870.38, Taiwan Weighted dropped 232.03 points or 1.58% to 14,445.17, Straits Times trembled 19.66 points or 0.61% to 3,204.52, Nikkei 225 slipped 298.67 points or 1.08% to 27,327.84, KOSPI fell 37.39 points or 1.55% to 2,372.63, Shanghai Composite declined 0.48 points or 0.01% to 3,242.97 and Jakarta Composite lost 44.04 points or 0.61% to 7,189.12.