Benchmarks continue to trade in red in morning deals

Indian equity benchmarks continued to trade in red in morning deals, amid weak global cues. Traders remained cautious as India Ratings said falling exports and high crude prices are set to push up current account deficit (CAD) in the second quarter to a 37-quarter high of 4.4 per cent of GDP at USD 36 billion as against USD 9.7 billion or 1.3 per cent in the year-ago period. Traders overlooked Union minister Piyush Goyal’s statement that huge opportunities are there in the textiles segment and the country would achieve $100 billion export target from the sector by 2030. He said that free trade agreements will further help boost textile exports. Meanwhile, the Parliament has passed the Energy Conservation (Amendment) Bill, 2022 that aims to mandate the use of green energy and enables the government to set up a carbon trading scheme. The Bill also allows the government to specify the minimum amount of non-fossil sources to be used by designated energy consumers.

On the global front, Asian markets are trading mostly in red after commentary from the US Federal Reserve suggested that the high interest rate regime might last longer than expected. Back home, stocks related to textile sector remained in watch as Icra in its latest report has said that even as macro headwinds impact performance of textile players across segments in the second quarter of 2022-23, the companies are expected to witness a healthy turnover in this financial year (FY23). However, it said the margins are expected to moderate amidst cost pressures.

The BSE Sensex is currently trading at 62439.85, down by 238.06 points or 0.38% after trading in a range of 62322.94 and 62624.81. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.05%, while Small cap index was up by 0.24%.

The top gaining sectoral indices on the BSE were Realty up by 0.49%, Oil & Gas up by 0.38%, Energy up by 0.16%, Auto up by 0.15% and PSU up by 0.10%, while TECK down by 1.18%, IT down by 1.17%, Metal down by 0.83%, Consumer Durables down by 0.64% and FMCG down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 0.77%, NTPC up by 0.47%, Indusind Bank up by 0.46%, Mahindra & Mahindra up by 0.45% and HDFC Bank up by 0.37%. On the flip side, Tech Mahindra down by 1.79%, Infosys down by 1.74%, HCL Technologies  down by 1.20%, TCS down by 1.10% and Titan Company down by 0.96% were the top losers.

Meanwhile, Icra in its latest report has said that even as macro headwinds impact performance of textile players across segments in the second quarter of 2022-23, the companies are expected to witness a healthy turnover in this financial year (FY23). However, it said the margins are expected to moderate amidst cost pressures.

Icra Assistant Vice-President and Sector Head, Corporate Sector Ratings, Sahil Udani said in the second quarter of FY23, revenue and margins dipped for the Indian spinners amidst macro headwinds, while for the apparel segment the revenue and margins remained flat, with recessionary conditions in key markets.

Further, he added most textile players reported a decline in inventory levels in the second quarter of FY23 after cotton stocks from the previous harvest season started to reduce and cotton prices saw a sharp volatility, resulting in players becoming cautious on buying.

The CNX Nifty is currently trading at 18589.50, down by 70.80 points or 0.38% after trading in a range of 18558.90 and 18652.90. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were SBI Life Insurance up by 1.26%, Hero MotoCorp up by 0.97%, Bajaj Finance up by 0.82%, Tata Motors up by 0.69% and NTPC up by 0.67%. On the flip side, Tech Mahindra down by 1.79%, Infosys down by 1.76%, HCL Technologies down by 1.24%, TCS down by 1.20% and Tata Consumer Product down by 1.04% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted dropped 18.42 points or 0.12% to 14,720.94, Nikkei 225 slipped 110.22 points or 0.39% to 28,045.99, Straits Times trembled 12.75 points or 0.39% to 3,265.82, Shanghai Composite declined 8.80 points or 0.28% to 3,167.73, KOSPI fell 29.76 points or 1.24% to 2,369.49, Jakarta Composite lost 30.99 points or 0.46% to 6,770.76 and Hang Seng decreased 224.30 points or 1.14% to 19,449.15.