Domestic markets trim opening losses; trade lower in early deals

Indian equity benchmarks continued their bearish trend on Thursday with gap-down opening following a global sell-off. But, soon markets trimmed most of their losses and are trading lower with cut of around 0.30% each in early deals. However, broader indices are outperforming larger peers with gains of around half a percent each. Initially, some cautiousness prevailed in the markets on foreign fund outflows. Foreign institutional investors (FIIs) have net sold shares worth Rs 461.04 crore on September 21, as per provisional data available on the NSE. Though, markets took some support as global rating agency S&P said even though the US and the Euro zone are headed to recession, India is unlikely to face the impact given the not so coupled nature of its economy with the global economy. More optimism came in as rating agency Crisil said reflecting further improvement in asset quality of banks, their gross non-performing assets (GNPAs) are expected to decline to 5.0 per cent by March 2023. Meanwhile, the Securities and Exchange Board of India (Sebi) is working on a new payment system for the secondary market, which could prevent brokers from accessing their client funds.

Global cues remained lackluster with all the Asian markets trading lower following the broadly negative cues from Wall Street overnight, after the US Fed raised interest rates by another three-quarter of a percentage point to their highest level since early 2008 and signaled further aggressive rate hikes for the remainder of the year. Back home, sugar industry stocks were in focus as the Indian Sugar Mills Association (ISMA) requested the government to expedite the sugar export policy, stating that at least eight million tonnes of exports are necessary in the sugar marketing season 2022-23. In stock specific development, Punjab National Bank gained after it raised Rs 658 crore through Basel III compliant additional Tier-1 bonds. On the other hand, SpiceJet plunged as DCGA continues flight ban.

The BSE Sensex is currently trading at 59276.83, down by 179.95 points or 0.30% after trading in a range of 58973.07 and 59380.26. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.46%, while Small cap index was up by 0.72%.

The top gaining sectoral indices on the BSE were FMCG up by 0.80%, Industrials up by 0.79%, Auto up by 0.68%, Capital Goods up by 0.68%, Telecom up by 0.53%, while Oil & Gas down by 0.58%, Energy down by 0.57%, Bankex down by 0.45%, IT down by 0.26%, TECK down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.52%, Hindustan Unilever up by 0.88%, Maruti Suzuki up by 0.78%, Indusind Bank up by 0.77% and Tata Steel up by 0.57%. On the flip side, HDFC down by 1.77%, HDFC Bank down by 1.22%, Bajaj Finserv down by 1.22%, Wipro down by 0.89% and ICICI Bank down by 0.76% were the top losers.

Meanwhile, exhibiting optimism over Indian economy, global rating agency S&P has said even though the US and the Euro zone are headed to recession, India is unlikely to face the impact given the ‘not so coupled’ nature of its economy with the global economy. Paul F Gruenwald, S&P global chief economist and managing director said ‘Indian economy is a lot decoupled from the global economy than we normally think of, given its large domestic demand, even though you (India) are a net importer of energy. But you have enough forex reserves on one hand and your companies have managed to maintain healthy balance sheets’.

He said in fact India was never coupled fully with the global economy and so is relatively independent of global markets, and added that a lot depends on how global fund flows behave if there is a recession in the US and Europe. Their inflation numbers continue to dodge the monetary actions by their central banks as the gap between the US core inflation target and the actual number is three times at 6 per cent.

On Indian growth numbers, Crisil Ratings (which is majority-owned by S&P Global Ratings) chief economist D K Joshi saidthat they hold their recent forecast wherein they ‘expect the economy to grow at 7.3 per cent this fiscal and slow down to 6.5 per cent next fiscal, with more downside risks to both the numbers.’ Besides, Gruenwald said despite these headwinds, India will be doing a lot better than the rest of the world.

The CNX Nifty is currently trading at 17671.55, down by 46.80 points or 0.26% after trading in a range of 17580.40 and 17697.30. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.63%, Adani Ports & SEZ up by 1.63%, Hindustan Unilever up by 1.17%, Shree Cement up by 1.09% and Eicher Motors up by 1.03%. On the flip side, SBI Life Insurance down by 1.81%, HDFC down by 1.76%, Bajaj Finserv down by 1.25%, HDFC Bank down by 1.21% and Cipla down by 1.20% were the top losers.

All the Asian markets are trading in red; Nikkei 225 slipped 211.34 points or 0.77% to 27,101.79, Straits Times weakened 11.31 points or 0.35% to 3,250.48, Hang Seng plunged 332.20 points or 1.80% to 18,112.42, Taiwan Weighted lost 158.61 points or 1.10% to 14,265.91, KOSPI declined 27.77 points or 1.18% to 2,319.44, Jakarta Composite fell 1.97 points or 0.03% to 7,186.34 and Shanghai Composite was down by 9.55 points or 0.31% to 3,107.63.