Benchmarks slip into red in morning deals

Indian equity benchmarks erased initial gains and slipped into red in morning deals, dragged by losses in Capital Goods, FMCG and Oil & Gas stocks. Traders turned cautious as a labour bureau statement said retail inflation for farm and rural workers rose to 6.87 per cent and 6.99 per cent, respectively, in November on annual basis. However, losses remain capped as some support came with a finance ministry report said that the government remains committed towards strong macroeconomic fundamentals and financial stability despite global headwinds. The report added despite hurdles, the Indian economy has performed reasonably well as compared to other major economies and shown its resilience amidst the global slowdown and global uncertainties. Meanwhile, investors await the release of MPC meeting minutes of the RBI later in the day for directional cues.

On the global front, Asian markets are trading mixed as traders are indulging in bargain hunting after the recent heavy sell-off on recession fears. Some traders are reluctant to get back into the markets amid lingering concerns of aggressive interest rate hikes continuing in to the next year. Back home, textile industry stocks remained in watch as the Cotton Association of India (CAI) reduced the cotton crop estimate by 4.25 lakh bales to 339.75 lakh bales for the 2022-23 season, beginning from October 2022, as the production in Haryana, Andhra Pradesh and Karnataka is expected to decline.

The BSE Sensex is currently trading at 61590.29, down by 112.00 points or 0.18% after trading in a range of 61574.83 and 62006.46. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.15%, while Small cap index was up by 0.15%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.78%, Realty up by 0.43%, IT up by 0.24%, Metal up by 0.14% and Consumer Durables up by 0.12%, while Capital Goods down by 0.45%, FMCG down by 0.39%, Oil & Gas down by 0.35%, Power down by 0.29%, Utilities down by 0.26% were the losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 0.95%, Wipro up by 0.53%, Tech Mahindra up by 0.52%, Sun Pharma up by 0.50% and Axis Bank up by 0.32%. On the flip side, HDFC down by 0.61%, Bharti Airtel down by 0.55%, Larsen & Toubro down by 0.52%, ITC down by 0.51% and Indusind Bank down by 0.51% were the top losers.

Meanwhile, the finance ministry in its report, on Half Yearly Review of the Trends in Receipts and Expenditure in relation to the Budget at the end of the first half of FY23, has said that government remains committed towards strong macroeconomic fundamentals and financial stability despite global headwinds.  The current global economy is navigating through incredibly rough waters attributed to global uncertainties, the unfolding of conflict in Ukraine, the reaction of financial and commodity markets to the changing scenarios and tight monetary policy, etc.

It mentioned ‘However, despite hurdles, the Indian economy has performed reasonably well as compared to other major economies and shown its resilience amidst the global slowdown and global uncertainties.’ It stated the budget 2022-23 was presented against the backdrop of recovery from the unprecedented Covid-19 crisis and clues of global uncertainties on account of the war in Ukraine.

Further, it stated the fiscal policy led by favourable macroeconomic fundamentals ensured a higher pace of capital expenditure compared to last year to push for rapid infrastructure development, considering the multiplier effect of capital expenditure on the overall economy. The government has increased the allocation to capital expenditure by 35 per cent to Rs 7.5 lakh crore in 2022-23 as compared to Rs 5.5 lakh crore in the previous year. This is 2.9 per cent of GDP, the highest ever.

The CNX Nifty is currently trading at 18351.55, down by 33.75 points or 0.18% after trading in a range of 18347.00 and 18473.35. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 1.96%, Apollo Hospital up by 1.38%, HCL Technologies up by 0.95%, HDFC Life Insurance up by 0.86% and Sun Pharma up by 0.72%. On the flip side, Britannia Industries down by 1.06%, Adani Enterprises down by 0.74%, Hero MotoCorp down by 0.73%, Bharti Airtel down by 0.67% and ONGC down by 0.65% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 205.42 points or 0.77% to 26,362.61, Straits Times trembled 6.45 points or 0.2% to 3,247.52, KOSPI fell 4.01 points or 0.17% to 2,329.28 and Shanghai Composite declined 3.16 points or 0.1% to 3,070.61.

On the flip side, Hang Seng increased 17.84 points or 0.09% to 19,112.64, Jakarta Composite soared 19.25 points or 0.28% to 6,787.57 and Taiwan Weighted strengthened 53.19 points or 0.38% to 14,223.22.