Domestic equity indices remain in red in late morning deals

Domestic equity indices remained lower and were trading with cut of around half percent in late morning deals on account of selling in IT, TECK and Metal stocks. Weak cues from global markets, after raising interest rate by 50 basis points, the Federal Reserve said that more increases are likely in the coming months, also dampened sentiments. There was cautiousness in the markets as former governor of the Reserve Bank of India Raghuram Rajan said the next year will be difficult for the Indian economy as also for the rest of the world and the country failed to generate reforms needed for growth. He said policies should be formulated keeping in mind the lower middle class which suffered the most due to the coronavirus pandemic.

On the global front, Asian markets were trading mostly in red on renewed concerns over the outlook for interest rates after the US Federal Reserve raised interest rates by 50 basis points and signaled further rate hikes ahead. Back home, in stock specific development, Indian Railway Catering and Tourism Corporation (IRCTC) dipped after the government fixed floor price at Rs 680 per share for its stake sale in the tour and travel related services company via offer for sale (OFS).

The BSE Sensex is currently trading at 62355.95, down by 321.96 points or 0.51% after trading in a range of 62322.94 and 62624.81. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index was down by 0.02%, while Small cap index up by 0.33%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.68%, Energy up by 0.28%, Auto up by 0.09%, PSU up by 0.06% and Industrials up by 0.02%, while IT down by 1.21%, TECK down by 1.19%, Metal down by 0.97%, Consumer Durables down by 0.65% and FMCG down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 0.80%, Bajaj Finserv up by 0.36%, Mahindra & Mahindra up by 0.35%, Larsen & Toubro up by 0.22% and NTPC up by 0.20%. On the flip side, Tech Mahindra down by 2.26%, Infosys down by 1.85%, Titan Co down by 1.27%, HCL down by 1.26% and Hindustan Unilever down by 1.24% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that falling exports and high crude prices are set to push up current account deficit (CAD) in the second quarter (Q2FY23) to a 37-quarter high of 4.4 per cent of GDP at $36 billion as against $9.7 billion or 1.3 per cent in the year-ago period. As a percentage of GDP, the previous high was in the first quarter of 2013-14 when CAD had scaled to 4.7 per cent, but in absolute terms the previous high was in the third quarter of 2012-13 when it touched $31.8 billion. In the first quarter of this fiscal (Q1FY23), the deficit was $23.9 billion or 2.8 per cent.

Global headwinds facing merchandise exports had the shipments contracting by close to 20 per cent in October 2022, first time since February 2021 and the agency expects merchandise exports to slip to an eight-quarter low of $88.2 billion in Q3FY23 which would be 17.4 per cent lower than Q3FY22. On the other side, falling commodity prices will help the country lower its import bill in the third quarter (Q3), even though crude prices were still 19.9 per cent in October-November.

The agency expects merchandise imports to decelerate to a three-quarter low of $171.9 billion in Q3, but will still be up 2.9 percent on-year. Overall, merchandise trade deficit will rise to a fresh high of $83.7 billion in Q3, which is 38.9 per cent higher than Q3FY22. Further, the agency expects the rupee to average 81.8 against the USD, up 9.1 per cent in Q3, further putting pressure on CAD.

The CNX Nifty is currently trading at 18570.40, down by 89.90 points or 0.48% after trading in a range of 18558.90 and 18652.90. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were SBI Life up by 1.49%, Hero MotoCorp up by 1.09%, Tata Motors up by 1.06%, Bajaj Finance up by 0.75% and Britannia up by 0.65%. On the flip side, Tech Mahindra down by 2.26%, Infosys down by 1.84%, Titan down by 1.35%, HCL down by 1.30% and Coal India down by 1.21% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 114.34 points or 0.41% to 28,041.87, Straits Times trembled 14.76 points or 0.45% to 3,263.81, Shanghai Composite declined 13.28 points or 0.42% to 3,163.25, KOSPI fell 30.86 points or 1.29% to 2,368.39, Jakarta Composite lost 30.99 points or 0.46% to 6,770.76 and Hang Seng decreased 266.86 points or 1.36% to 19,406.59. However, Taiwan Weighted strengthened 1.45 points or 0.01% to 14,740.81.