Bourses continue volatile trade in late afternoon session

Local equity markets continued their volatile trade in late afternoon session. Selling was witnessed in the Realty and Consumer Durables sectors after the Reserve Bank of India (RBI) hiked repo rate by 35 basis points to 6.25 per cent. Traders ignored report that Reserve Bank projected inflation to come down below the upper threshold level of 6 per cent by March quarter of the current fiscal. RBI Governor Shaktikanta Das said the central bank will keep ‘Arjuna’s eye’ (focus) on the evolving inflation dynamics and will remain ‘nimble and flexible’ to deal with the price situation. Sector wise, agriculture sector remained in limelight after Reserve Bank Governor Shaktikanta Das said the agriculture sector remains resilient, and the rabi sowing has got off to a strong start. However, India is expecting some moderation in kharif production due to uneven rainfall.

On the global front, all Asian markets were trading lower amid Beijing announced it was drastically scaling back its 'zero-COVID'' policies, shifting away from trying to isolate every single case. European markets were trading mostly in green helped by rally healthcare sector stocks.

The BSE Sensex is currently trading at 62,507.56, down by 118.8 points or 0.19% after trading in a range of 62404.74 and 62759.97. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.41%, while Small cap index was down by 0.45%.

The few gaining sectoral indices on the BSE were Capital Goods up by 0.96%, FMCG up by 0.87%, Industrials up by 0.45% and Oil & Gas was up by 0.28%,while Realty down by 1.22%, Consumer Durables down by 1.06%, Utilities down by 0.96%, Metal down by 0.79% and Auto was down by 0.72% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.73%, Larsen & Toubro up by 1.69%, Asian Paints up by 1.65%, Axis Bank up by 1.07% and ITC up by 0.80%. On the flip side, Bajaj Finserv down by 1.93%, Indusind Bank down by 1.78%, NTPC down by 1.65%, HCL Tech down by 1.59% and Sun Pharma down by 1.38% were the top losers.

Meanwhile, Fitch Ratings in its APAC Oil & Gas Outlook 2023 has said that the five-month-old tax on windfall profits made by oil companies will be phased out in 2023 on the back of moderating oil rates. On July 1, 2022, the government had levied a new tax on domestically-produced crude oil as well as on the export of petrol, diesel and jet fuel (ATF) to take away windfall gains accruing to oil companies from a global surge in energy prices following Russian invasion of Ukraine. The tax rates are revised every fortnight based on prevailing international rates. The levy on petrol export has since been abolished.

The rating agency said domestically-produced crude oil, which makes up for 15 per cent of all oil consumed in the country, is priced at international rates. It projected $85 per barrel price for Brent crude oil, down from $100 in 2022. It expected India's petroleum product demand recovery to be supported by a GDP growth estimate of 6.7 per cent. It also expects oil marketing companies (OMCs) marketing margins to recover and partly recoup 2022's losses, given our modestly lower crude-price assumptions.

However, it said refining margins may ease to mid-cycle levels from all-time highs though still remaining healthy, which should support improvement in OMCs' credit metrics. It also said upstream companies will see robust cash flow despite some moderation from very high levels in 2022 and higher domestic gas prices. It added that downstream oil refining and fuel retailing companies will continue to have high capex during FY24 as they invest in expanding refining capacity and retail networks.

The CNX Nifty is currently trading at 18,593.15, down by 49.60 points or 0.27% after trading in a range of 18564.50 and 18668.30. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.15%, Hindustan Unilever up by 1.74%, Larsen & Toubro up by 1.67%, Asian Paints up by 1.56% and Axis Bank up by 1.17%. On the flip side, Bajaj Finserv down by 2.06%, Indusind Bank down by 1.74%, HCL Tech down by 1.65%, NTPC down by 1.57% and Sun Pharma down by 1.54% were the top losers.

All Asian markets were trading lower, Hang Seng decreased 626.36 points or 3.22% to 18,814.82, Nikkei 225 slipped 199.47 points or 0.72% to 27,686.40, Taiwan Weighted dropped 98.87 points or 0.67% to 14,630.01, Jakarta Composite lost 73.82 points or 1.07% to 6,818.75, Straits Times trembled 21.74 points or 0.67% to 3,230.63, Shanghai Composite declined 12.91 points or 0.4% to 3,199.62 and KOSPI was down by 10.35 points or 0.43% to 2,382.81.

European markets were trading mostly in green, UK’s FTSE 100 increased 20.51 points or 0.27% to 7,541.90 and France’s CAC was up by 2.63 points or 0.04% to 6,690.42. On the flip side, Germany’s DAX was down by 14.79 points or 0.1% to 14,328.40.