Markets remain weak in late morning deals

Indian equity markets continued to trade weak in late morning deals as caution set in ahead of another likely 75-basis-point rate hike by the U.S. Federal Reserve. Depreciation in Indian rupee against dollar weighed down sentiments. Rupee weakened by 12 paise to 82.71 against the dollar at the Inter-bank Foreign Exchange market on account of increased demand for the American currency from importers and banks. Further, Sentiments also remained weak as a private report stated that market borrowing cost for the states remained high with the average yield hitting 7.83 per cent at the auctions held on Tuesday, which is a paltry 1 basis points lower than the last auction of state securities.

On the global front, Asian markets were trading mixed following the broadly negative cues from US markets overnight, as traders remained cautious and are consolidating their position ahead of the US Fed's monetary policy announcement later in the day. Back home, in stock specific development, Karnataka Bank was locked in the 20 per cent upper circuit after the bank posted a record quarterly net profit of Rs 411 crore for the quarter ended September 2022 (Q2FY22). The net profit grew by 228 per cent compared to the net profit of Rs 125 crore in Q2FY22.

The BSE Sensex is currently trading at 60,985.22, down by 136.13 points or 0.22% after trading in a range of 60,927.54 and 61,209.65. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.14%, while Small cap index up by 0.42%.

The top gaining sectoral indices on the BSE were Metal up by 1.19%, Healthcare up by 0.99%, Oil & Gas up by 0.41%, Energy up by 0.34% and Commodities up by 0.28%. On the flip side, Telecommunication down by 0.97%, Auto down by 0.89%, TECK down by 0.88%, Utilities down by 0.69% and Power down by 0.69%. were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharmaceutical Industries up by 2.78%, ITC up by 1.60%, Tata Steel up by 0.74%, Dr.Reddy's Laboratories up by 0.69% and Hdfc Bank up by 0.60%, while Bharti Airtel down by 2.82%, Maruti Suzuki India down by 2.09%, Hindustan Unilever down by 1.31%, Nestle India down by 1.29% and Infosys down by 1.29% were the top losers.

Meanwhile, credit rating agency ICRA in its latest report has said that market borrowing cost for the states remained high with the average yield hitting 7.83 per cent at the auctions held on November 1, 2022, which is a paltry 1 basis points lower than the last auction of state securities. Seven states raised Rs 10,700 crore at Tuesday's auction of state government securities (SGS), which is just about half of the Rs 20,800 crore indicated for the week.

According to the report, the weighted average cut-off slipped to 7.83 per cent from 7.84 per cent last week, despite the rise in weighted average tenor to 15 years from 13. However, the yield on 10-year G-secs declined by 4 basis points (bps) to 7.40 per cent while the weighted average cut-off for 10-year state bonds slipped only by 1 bps to 7.82 per cent. Accordingly, the spread between the weighted average cut-off of 10-year state bonds and the 10-year G-sec yield rose to 42 bps from 39 bps.

The report stated that the reason for the massive fall in the draw-down is because big borrowers like Haryana, Karnataka, Maharashtra, Tamil Nadu, Uttar Pradesh and Sikkim did not participate in auctions even though they had indicated a combined borrowing of Rs 10,200 crore for this week. Additionally, Andhra and Rajasthan borrowed Rs 1,100 crore less than indicated. In contrast, Madhya Pradesh raised Rs 1,000 crore more than indicated and so did Punjab drawing down Rs 200 crore more than indicated in the quarterly auction calendar. Kerala issued 23-year bonds at a cut-off of 7.80 per cent, lower than the cut-off of 7.82 per cent for the 10-year bond from Assam and Rajasthan. Overall, the cumulative draw-down so far this fiscal stood at Rs 3.6 lakh crore by 24 states, down 6 per cent from the year-ago period.

 The CNX Nifty is currently trading at 18,107.65, down by 37.75 points or 0.21% after trading in a range of 18,091.90 and 18,178.75. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.37%, Hindalco Industries up by 2.33%, Sun Pharmaceutical Industries up by 2.24%, ITC up by 1.65% and Coal India up by 1.32%. On the flip side, Bharti Airtel down by 2.60%, Apollo Hospitals Enterprise down by 2.44%, Eicher Motors down by 2.14%, Maruti Suzuki India down by 2.06% and Hindustan Unilever down by 2.41% were the top losers.

Asian markets are trading mixed; Taiwan Weighted strengthened 62.96 points or 0.48% to 13,100.17, Hang Seng increased 371.33 points or 2.4% to 15,826.60, KOSPI rose 4.61 points or 0.2% to 2,339.83 and Shanghai Composite gained 45.89 points or 1.55% to 3,015.09.  However, Nikkei 225 slipped 13.58 points or 0.05% to 27,665.34, Jakarta Composite lost 30.58 points or 0.43% to 7,021.72 and Straits Times trembled 2.67 points or 0.09% to 3,127.83.