Indian equity markets trim some of losses in late afternoon session

Indian equity markets trimmed some of their losses but continued to trade deep in red in late afternoon session. Traders were getting some encouragement  with Finance Minister Nirmala Sitharaman’s statement the rupee has held back very well when compared to other currencies against the US Dollar. She added that the Reserve Bank and the Finance Ministry are keeping a very close watch over the developments. Some support also came in as the government said India is on track to attract $100 billion foreign direct investment (FDI) in the current fiscal on account of economic reforms and ease of doing business. However, traders remained cautious as S&P Global Ratings projected India's Gross domestic product (GDP) growth at 7.3 percent in the current fiscal (FY23) with downside risks and said inflation is likely to remain above RBI's upper tolerance threshold of 6 percent till the end of 2022.

On the global front, Asian markets were trading lower on concerns that high inflation and aggressive policy tightening could trigger a global economic recession. However, European markets were trading mostly higher despite concern for the global growth outlook has been increasing as inflation remains high and central banks resort to aggressive interest rate hikes to try to tame rising prices. Back home, on the BSE sectoral front, traders were seen piling up position in IT, TECK and Basic Materials, while selling was witnessed in Metal, Realty, Utilities, Power and Auto.

The BSE Sensex is currently trading at 57539.47, down by 559.45 points or 0.96% after trading in a range of 57038.24 and 57708.38. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.14%, while Small cap index down by 2.75%.

The gaining sectoral indices on the BSE were IT up by 1.16%, TECK up by 1.00%, Consumer Disc up by 0.04% and Basic Materials up by 0.01%, while Metal down by 3.64%, Realty down by 3.47%, Utilities down by 3.20%, Power down by 3.18% and Auto down by 3.18% were the losing indices on BSE.

The top gainers on the Sensex were HCL up by 2.41%, Infosys up by 2.34%, Asian Paints up by 1.99%, TCS up by 1.23% and Wipro up by 1.06%. On the flip side, Maruti Suzuki down by 4.51%, Tata Steel down by 3.60%, ITC down by 3.23%, NTPC down by 2.90% and Mahindra & Mahindra down by 2.84% were the top losers.

Meanwhile, S&P Global Ratings has projected India's Gross domestic product (GDP) growth at 7.3 percent in the current fiscal (FY23) with downside risks and said inflation is likely to remain above RBI's upper tolerance threshold of 6 percent till the end of 2022. In its Economic Outlook for the Asia Pacific, it said India's growth next year will get support from domestic demand recovery after the coronavirus pandemic.

On inflation, S&P Global Ratings pegged the average rate in the current fiscal at 6.8 percent and projected it to fall to 5 percent in the next fiscal beginning April 2023. India's headline Consumer Price Inflation (CPI) is likely to remain outside the Reserve Bank of India's (RBI) upper tolerance limit of 6 percent until the end of 2022. That's amid substantial weather-induced wheat and rice price increases as well as sticky core inflation. And food inflation may rise again.

It further said retail or consumer price inflation has remained above RBI's upper tolerance threshold of 6 percent for the eighth month in a row and was at 7 percent in August. Wholesale price inflation remained in double digits for the 17th straight month and was at 12.41 percent in August. According to S&P Global Ratings, elevated core inflation would drive up policy rates further in India, and projected policy interest rates to be 5.90 percent by the end of this fiscal. 

The CNX Nifty is currently trading at 17136.60, down by 190.75 points or 1.10% after trading in a range of 16978.30 and 17196.40. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Infosys up by 2.34%, HCL Tech. up by 2.28%, Asian Paints up by 2.03%, Divi's Lab up by 1.64% and TCS up by 1.26%. On the flip side, Tata Motors down by 5.11%, Hindalco down by 4.49%, Maruti Suzuki down by 4.45%, Eicher Motors down by 4.10% and Adani Ports &Special down by 4.04% were the top losers.

All Asian markets were trading lower; Shanghai Composite declined 37.14 points or 1.20% to 3,051.23, Hang Seng decreased 78.13 points or 0.44% to 17,855.14, Nikkei 225 slipped 722.28 points or 2.66% to 26,431.55, Taiwan Weighted dropped 340.19 points or 2.41% to 13,778.19, KOSPI fell 69.06 points or 3.02% to 2,220.94, Straits Times trembled 52.59 points or 1.63% to 3,174.51 and Jakarta Composite was down by 51.08 points or 0.71% to 7,127.50.

European markets were trading mostly higher, France’s CAC rose 16.3 points or 0.31% to 5,801.04 and Germany’s DAX was up by 21.44 points or 0.18% to 12,305.59, while UK’s FTSE 100 decreased 3.51 points or 0.04% to 7,013.1.