Markets trade with cut of over half percent

Domestic equity markets magnified their losses and were trading with cut of over half a percent in late morning deals on the back of selling by funds and retail investors. Meanwhile, the session was also proving weak for broader indices which were trading with losses in the range of 0.50-0.75%. Weak cues from global markets dampened domestic sentiments. A depreciating rupee, which slipped 6.50 paise to trade at 81.71 against the US dollar, made traders more nervous. Sentiments remained weak as Moody's Investors Service said that a combination of weak growth in advanced economies, persistent inflationary pressures, the Russia-Ukraine conflict, tight financial conditions, and a subdued growth outlook for China will create a difficult environment for emerging markets (EM) in 2023. On the sectoral front, most of the sectoral indices on the BSE were holding in red, with only exceptions of Consumer discretionary and Basic Materials counters. Stocks from Consumer Durables, Auto, Capital Goods, IT and Realty counters were the prominent losers.

On the global front, Asian markets were trading mostly in red as hawkish comments from a top U.S. Federal Reserve official and signs of continued labor market tightness led some investors to worry about more aggressive interest rate hikes in the United States. Back home, in stock specific development, TCPL Packaging hit a record high on healthy business outlook. FSN E-Commerce Ventures jumped after Canada Pension Plan Investment Board bought over 1.70 crore shares of the company for Rs.299 crore.

The BSE Sensex is currently trading at 61425.21, down by 325.39 points or 0.53% after trading in a range of 61357.70 and 61929.88. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.73%, while Small cap index down by 0.53%.

The only gaining sectoral indices on the BSE were Consumer discretionary up by 0.05% and Basic Materials up by 0.02%, while Consumer Durables down by 1.11%, Auto down by 0.89%, Capital Goods down by 0.81%, IT down by 0.77% and Realty down by 0.75% were the top losing indices on BSE.

The only gainers on the Sensex were Kotak Mahindra Bank up by 1.07%, Axis Bank up by 0.48% and Bajaj Finance up by 0.12%. On the flip side, Mahindra & Mahindra down by 2.26%, Titan Co down by 1.25%, Bharti Airtel down by 1.07%, Tech Mahindra down by 1.02% and ICICI Bank down by 0.90% were the top losers.

Meanwhile, Credit Rating Agency ICRA in its latest report has said that the domestic jewellery industry, which recorded healthy sales during the festival period, is expected to witness 12 per cent growth during this financial year (FY23) compared to the previous fiscal.

According to the report, the domestic jewellery industry is estimated to have registered a healthy growth of 60 per cent in the second quarter of FY23 as against pre-Covid levels (Q2 FY20), which exceeded Icra's expectations of an 8 per cent YoY contraction and was driven by urban demand recovery following range-bound prices. However, on a Year-on-Year (YoY) basis, the demand recorded a contraction of 2 per cent in the quarter owing to a high base in the second quarter of FY22, which had grown by 70 per cent YoY, due to pent-up demand after the lifting of the pandemic-induced restrictions last year.

Going forward, it said while some contraction is expected in the current quarter, the industry growth in FY23 is likely to be 12 per cent YoY, driven by robust growth in the first quarter of FY23 and steady wedding and festive demand. While the jewellery sector has recorded healthy sales in the Dussehra and Diwali season, factors like high domestic inflation, cautious consumer sentiments towards discretionary spending, and weak rural economic recovery due to erratic monsoons are likely to continue to constrain demand growth in the near term. Nevertheless, the demand outlook for the sector in the medium to long term remains favourable.

The CNX Nifty is currently trading at 18240.00, down by 103.90 points or 0.57% after trading in a range of 18220.95 and 18394.60. There were 4 stocks advancing against 46 stocks declining on the index.

The only gainers on Nifty were Kotak Mahindra Bank up by 1.13%, Axis Bank up by 0.41%, Tata Motors up by 0.21% and Divi's Lab up by 0.13%. On the flip side, Mahindra & Mahindra down by 2.32%, ONGC down by 1.57%, Titan Co down by 1.25%, Bajaj Auto down by 1.22% and Britannia down by 1.19% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 1.85 points or 0.06% to 3,113.58, Taiwan Weighted dropped 35.97 points or 0.25% to 14,499.26, Straits Times trembled 15.22 points or 0.46% to 3,270.82 and Nikkei 225 slipped 33.26 points or 0.12% to 27,897.31. However, Hang Seng increased 44.76 points or 0.25% to 18,090.42, KOSPI rose 3.32 points or 0.14% to 2,446.22 and Jakarta Composite soared 38.07 points or 0.54% to 7,083.06.