Benchmarks remain in red in morning deals

Indian equity benchmarks continued to trade in red in morning deals, tracking weakness in Telecom, Realty and Banking stocks amid weakness across global markets. Traders remained cautious as rating agency Crisil's research wing in its latest report stated that India Inc is likely to report a three per cent year-on-year fall in profits for the July-September period (Q2FY23). This fall in profitability will be the fourth straight quarter of the decline in profits for the listed companies. Profitability is seen declining 300 basis points (bps) due to elevated commodity prices. Some concern also came with SBI Research in its latest 'Ecowrap' report said that the unseasonal rains in different parts of India, particularly in cereal-producing states, could have a 'significantly large impact' on cereal and vegetable prices. It also said India's retail inflation surged to 7.41 per cent in September, remaining above the Reserve Bank of India's mandated range of 2-6 per cent for the third straight quarter - nine straight months - largely due to a rise in food prices. Besides, sustained foreign capital outflows also weighed on investor sentiments. As per exchange data, foreign institutional investors (FIIs) remained net sellers in the Indian capital market on Wednesday as they sold shares worth Rs 542.36 crore.

On the global front, Asian market are trading mostly in red as investors weighed the risks of global recession amid hawkish Federal Reserve rhetoric and uncertainty about the Bank of England’s commitment to stabilising markets. Back home, banking stocks remained in watch as Moody's Investors Service said the Reserve Bank of India's slew of rate hikes this year to combat surging inflation will help lift banks' net interest margins, but the increase will be limited as funding costs will rise faster than loan rates.

The BSE Sensex is currently trading at 57327.73, down by 298.18 points or 0.52% after trading in a range of 57268.54 and 57568.14. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.53%, while Small cap index was down by 0.29%.

The few gaining sectoral indices on the BSE were Healthcare up by 0.39%, Metal up by 0.20%, while Telecom down by 0.91%, Realty down by 0.83%, Bankex down by 0.78%, Oil & Gas down by 0.73% and Consumer Durables down by 0.68% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 2.66%, Sun Pharma up by 1.03%, Dr. Reddy's Lab up by 0.94%, NTPC up by 0.45% and Mahindra & Mahindra up by 0.22%. On the flip side, Wipro down by 5.53%, Larsen & Toubro down by 1.09%, Bajaj Finserv down by 1.05%, HDFC Bank down by 1.00% and SBI down by 0.96% were the top losers.

Meanwhile, the PHD Chamber of Commerce and Industry (PHDCCI) has said going by the current trend, it is expecting the Indian economy to grow at 6-7 per cent during current fiscal year (FY23). Chamber's new president Saket Dalmia said production has bounced back and there is a big demand in the country. The statement comes a day after the International Monetary Fund (IMF) cut its economic growth forecast for India to 6.8 per cent in 2022. The Reserve Bank of India too has cut the economic growth projection for FY23 to 7 per cent from 7.2 per cent estimated earlier on account of extended geopolitical tensions and aggressive monetary policy tightening globally.

Further,  Dalmia also said the chamber has identified 75 potential products such as agriculture and chemicals to promote their exports in 75 countries like the US and Europe to help India achieve trade the target of USD 750 billion by 2027. He said the US, Canada, Germany, France, the UK, Japan, the UAE, and China, among others would be the major focused markets to boost exports of these goods. The other products include textiles, auto, and pharmaceutical items.

Besides, he also said cost of capital is a key challenge for the MSME sector and the chamber has requested the RBI and the government to look into the issues. He added cost and access to capital is a big challenge and banks have 'not done anything or not enough at this front.

The CNX Nifty is currently trading at 17023.95, down by 99.65 points or 0.58% after trading in a range of 17019.35 and 17112.35. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were HCL Technologies up by 2.53%, Hindalco up by 1.54%, Dr. Reddy's Lab up by 1.06%, Sun Pharma up by 1.05% and Coal India up by 0.90%. On the flip side, Wipro down by 5.69%, ONGC down by 2.44%, SBI Life Insurance down by 1.46%, Adani Ports &SEZ down by 1.41% and HDFC Life Insurance down by 1.25% were the top losers.

Asian market are trading mostly in red; Taiwan Weighted dropped 204.03 points or 1.56% to 12,877.21, Hang Seng decreased 166.88 points or 1% to 16,534.15, Nikkei 225 slipped 122.36 points or 0.46% to 26,274.47, Straits Times trembled 35.82 points or 1.16% to 3,047.37 and KOSPI fell 26.40 points or 1.2% to 2,176.07.

On the flip side, Shanghai Composite gained 4.92 points or 0.16% to 3,030.43 and Jakarta Composite soared 10.73 points or 0.16% to 6,919.94.