Sensex, Nifty fall for third straight session

Indian equity benchmarks traded lower for the third consecutive session and ended with losses of around two percent on Friday, led by a fall in global equities amid expectations of strong a rate hike by the US Federal Reserve.  After a gap-down opening, markets continued to reel under pressure, as Foreign fund outflows have dented investor sentiments. According to data available with the BSE, foreign institutional investors offloaded shares worth a net Rs 1,270.68 crore in the domestic market on Thursday. Traders remained cautious as India Ratings has cuts India's FY23 GDP growth forecast to 6.9 per cent from 7 per cent, joining other institutions who have cut their projections to below 7 per cent since the release of the April-June quarter GDP data. Despite private final consumption expenditure (PFCE) and gross fixed capital formation (GFCF) growth coming in better than its expectations in Q1, the agency expects the slowdown in the growth of government final consumption expenditure (GFCE) and worsening of net exports to weigh on the FY23 GDP growth. Some concern also came as Global Rating agency Moody’s said India’s rated infrastructure firms can largely withstand further depreciation in the value of rupee against US dollar due to financial hedges and other mitigants.

Key indices extended their fall to close near intraday lows as International Monetary Fund (IMF) stated that the global economic outlook remains downbeat and some countries are expected to slip into recession in 2023, but it is too early to say if there will be a widespread global recession. The IMF in July revised down global growth to 3.2% in 2022 and 2.9% in 2023. It will release a new outlook next month. Some pessimism also came after the World Bank said the world could be heading towards a global recession in 2023 as central banks across the world simultaneously hike interest rates to combat persistent inflation. Traders overlooked Union Minister for Petroleum and Natural Gas Hardeep Singh Puri’s statement that the country is on the path to becoming a 10 trillion-dollar economy in 2030 and the third largest economy in the world by 2047.

On the global front, Asian markets settled mostly lower on Friday, while European markets were trading mostly in red amidst fresh concerns over a hawkish interest rate decision by the Fed in its review next week. Retail Sales in the U.S. grew 0.3 percent in August versus a 0.4 percent decline in July and expectations of a flat reading. The losses are despite an unexpected jump in China's industrial output.

Back home, aviation industry stocks were in focus as rating agency Icra said domestic air passenger traffic rose 5 per cent to 1.02 crore in August and a fast-paced recovery in the traffic is expected this fiscal on the back of normalcy in flight operations and widening vaccination coverage. Telecom stocks also were in watch as Union Minister for Communications, Electronics and Information Technology, Ashwini Vaishnaw said telecom Sector in the country will witness more reforms in coming years and the industry too will have to do its bit and reciprocate by improving the quality of service significantly.

Finally, the BSE Sensex fell 1093.22 points or 1.82% to 58,840.79 and the CNX Nifty was down by 346.55 points or 1.94% to 17,530.85.

The BSE Sensex touched high and low of 59,720.56 and 58,687.17, respectively. There were 1 stocks advancing against 29 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 2.85%, while Small cap index was down by 2.38%.

The top losing sectoral indices on the BSE were Realty down by 3.53%, IT down by 3.37%, Basic Materials down by 3.05%, TECK down by 3.03% and Auto down by 2.67%, while there were no gaining sectoral indices on the BSE.

The lone gainer on the Sensex was Indusind Bank up by 2.63%. On the flip side, Ultratech Cement down by 4.51%, Tech Mahindra down by 4.45%, Infosys down by 3.69%, Mahindra & Mahindra down by 3.58% and Wipro down by 3.19% were the top losers.

Meanwhile, Union Minister for Communications, Electronics and Information Technology, Ashwini Vaishnaw has said telecom Sector in the country will witness more reforms in coming years and the industry too will have to do its bit and reciprocate by improving the quality of service significantly.

He stated ‘Service quality parameters have to be significantly increased, and the Telecom Department should approach the Telecom Regulatory Authority of India (TRAI) in this regard. Telecom Department should send a new consultation paper to TRAI for significantly increasing the quality-of-service parameters almost making it 3X or 4X of what it is today.’

Further, he said that the journey of 5G is going to be very exciting and noted that many countries took multiple years to reach 40 per cent to 50 per cent coverage adding that the government is targeting a very aggressive timeline and has given a target of 80 per cent coverage in the short time frame.

He added the industry including Telecom Operators and Infrastructure Providers to move full steam ahead on improving quality of services in the country, now that a slew of reforms had been announced and more were lined up. Initiatives cannot be one-sided, and the equation has to be reciprocal.

The CNX Nifty traded in a range of 17,820.05 and 17,497.25. There were 2 stocks advancing against 48 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 2.52% and Cipla up by 1.03%. On the flip side, UPL down by 5.12%, Tata Consumer Product down by 4.73%, Tech Mahindra down by 4.52%, Ultratech Cement down by 4.27% and Infosys down by 3.89% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 68.82 points or 1.12% to 6,089.02 and Germany’s DAX decreased 177.63 points or 1.37% to 12,779.03, while UK’s FTSE 100 increased 8.91 points or 0.12% to 7,290.98.

Asian markets settled mostly lower on Friday, tracking losses in Wall Street overnight. Persisting worries about a global economic slowdown amid hiking rates also pressurising market sentiments. Meanwhile, investors are awaiting Federal Reserve’s meeting next week, where another 75-basis-point rise is widely expected to tame the rising pressure. Although, data showed that US retail sales unexpectedly rebounded in August, while another set showed the number of people filing new claims for unemployment benefits fell to the lowest level in more than three months. Chinese shares declined even as China’s industrial production and retail sales figures for August beats expectations.