Weak trade continues over Dalal Street

Weak trade continued over the Dalal Street in late morning session with both Sensex and Nifty trading in red, on the back of negative cues from other Asian markets. Domestic sentiments remained pessimistic, as fresh estimates by the World Bank showed that about 56 million Indians may have plunged into extreme poverty in 2020 as a result of the pandemic, increasing the global tally by 71 million and making it the worst year for poverty reduction since World War II. Adding more worries among traders, a private report stated that India's rupee will trade near its record low against the mighty greenback beyond this year, buffeted by rising oil prices and an aggressive U.S. Federal Reserve rate-hiking campaign.

The street overlooked reports that the Department of Expenditure, Ministry of Finance, has released the 7th monthly instalment of Post Devolution Revenue Deficit (PDRD) grant of Rs 7,183.42 crore to 14 states. With the release of seventh instalment for the month of October, 2022, the total amount of Revenue Deficit Grants released to the states in current fiscal has gone up to Rs 50,282.92 crore.

On the global front, Asian markets were trading mostly in red, as South Korea posted a current account deficit of $3.05 billion in August. That follows the downwardly revised $0.79 billion surplus in July (originally $1.09 billion). The goods account saw a $4.45 billion deficit, down from the $6.03 billion surplus a year earlier.

The BSE Sensex is currently trading at 57974.17, down by 247.93 points or 0.43% after trading in a range of 57911.07 and 58231.20. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.67%, while Small cap index was down by 0.09%.

The only gaining sectoral indices on the BSE were Consumer Durables up by 1.90%, Telecom up by 0.45% and Auto up by 0.05%, while Metal down by 1.15%, FMCG down by 0.95%, Bankex down by 0.87%, PSU down by 0.84% and Oil & Gas down by 0.81% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Co up by 5.02%, Maruti Suzuki up by 1.01%, Bharti Airtel up by 0.55%, Reliance Industries up by 0.42% and Power Grid up by 0.34%. On the flip side, Ultratech Cement down by 1.77%, SBI down by 1.74%, Axis Bank down by 1.26%, TCS down by 1.24% and ITC down by 1.23% were the top losers.

Meanwhile, ratings agency ICRA in its latest report has said that the domestic road logistics sector is expected to continue its growth momentum in FY2023 supported by the accelerated pace of business activities, following a healthy growth in FY2022. ICRA maintains its growth estimates of 7-9 per cent in FY23 over FY22. It noted that the ability of the organised players to command a price premium in light of the fuel price inflation scenario, while retaining cost reduction initiatives will support operating profitability in FY2023.

However, the report stated that the margin movement will continue to depend on customer demand attitudes, diesel price fluctuations, and the industry's competitive intensity. As a result of the anticipated debt-financed capital expenditures for vehicle replacement required prior to the commencement of the scrappage policy and the rising interest rate environment, it is anticipated that debt coverage metrics will marginally weaken in FY2023 relative to FY2022 levels. It pointed out that the introduction of the National Logistics Policy (NLP) aimed at promoting the seamless movement of goods, overcome transport-related challenges, encouraging digitization along with the significant reduction in time and cost, is targeted to reduce the logistics costs from 13-14 per cent of GDP to single digits.

According to the report, this augurs well for the road logistics sector, as it shall reduce the overdependence on road through better integration of different modes of transport and in turn improve demand identification, thereby enabling better availability of trucks. However, it said the implementation remains the key, given the coordination of multiple agencies, stakeholders, and physical entities involved. The logistics sector's quarterly revenues increased by 5.8 per cent in Q1 FY2023 compared to Q4 FY2022, thanks to solid and sustained demand from the manufacturing sector. The revenue remains close to multi-year high quarterly revenues, supported by a sustained recovery in industrial activities.

The CNX Nifty is currently trading at 17259.50, down by 72.30 points or 0.42% after trading in a range of 17239.00 and 17334.65. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Titan Co up by 5.09%, Bajaj Auto up by 1.69%, Hero MotoCorp up by 1.32%, Maruti Suzuki up by 1.04% and UPL up by 0.57%. On the flip side, Ultratech Cement down by 1.86%, SBI down by 1.80%, Adani Ports & SEZ down by 1.66%, JSW Steel down by 1.56% and BPCL down by 1.54% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 187.13 points or 0.69% to 27,124.17, Taiwan Weighted dropped 193.88 points or 1.40% to 13,698.17, Jakarta Composite lost 46.10 points or 0.65% to 7,030.52, KOSPI fell 4.49 points or 0.2% to 2,233.37 and Hang Seng decreased 277.23 points or 1.54% to 17,734.92. On the flip side, Straits Times advanced 3.23 points or 0.1% to 3,154.79.