Indian equities trade lower in early deals; Tata Motors leads losers

Domestic equity markets extended their previous session’s losses with negative start on Friday on weak global cues. Indian equities are trading lower with over half a percent in early deals due at selling in utilities, power, metal, auto and realty counters. Besides, fears of economic growth slowdown coupled with the fresh Covid-19 scare continue weighted down on the market sentiment. Traders took note of a private report that amid a slowdown in demand for Indian goods in developed countries, India can focus on 18 products, such as insecticides, construction material, chemicals, and iron and steel, to boost its exports to developing countries where the country meets only 2.5 per cent of the demand at present. Though, downside remained limited amid foreign fund inflows. Foreign institutional investors (FIIs) have bought shares worth Rs 928.63 crore on December 22, as per provisional data available on the NSE.

Global cues remained lackluster with most of the Asian markets trading lower as rate hike and recession worries rattled investors. Tech stocks led losses after chipmaker Micron Technology unveiled a dismal outlook for the current quarter and new data showing a resilient U.S. economy revived worries about the Federal Reserve's attempts to battle inflation. China market was under pressure with report that the country is likely experiencing 1 million COVID infections and 5,000 virus deaths every day.

Back home, defence industry stocks were in focus as seeking to deepen US-India military ties, the defence chiefs of the two countries have shared their assessments of the regional and global security environment and discussed ways to deepen bilateral cooperation and interoperability. In stock specific development, India Cements declined after trade regulator Competition Commission of India (CCI) conducted search operations in its Chennai office.

The BSE Sensex is currently trading at 60431.32, down by 394.90 points or 0.65% after trading in a range of 60205.56 and 60546.88. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.23%, while Small cap index was down by 1.72%.

The sole gaining sectoral index on the BSE was Healthcare up by 1.00%, while Utilities down by 1.99%, Power down by 1.84%, Metal down by 1.53%, Auto down by 1.53%, Realty down by 1.45% were the top losing indices on BSE.

The few gainers on the Sensex were Sun Pharma up by 1.58%, Nestle up by 0.15% and Reliance Industries up by 0.07%. On the flip side, Tata Motors down by 2.54%, Tata Steel down by 1.91%, SBI down by 1.70%, Infosys down by 1.22% and Power Grid down by 1.21% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) executive director Ajay Kumar Choudhary has termed the launch of digital rupee a historic milestone and said the currency would bring in a lot of operational efficiency in the system and will foster financial inclusion. As per the central bank digital currency (CBDC) tracker, almost 105 countries representing 95 per cent of the world's GDP have taken steps to inculcate digital currency in their ecosystem. He said around 50 countries are at the advanced phase of exploration to launch the digital currency, while 10 countries have fully launched the digital currency.

He also said that digital rupee will add the resilience associated with innovation in the way payments are made, and added that it will also boost innovation in the cross-border payment space. He further said CBDC will give the public the desired experience while ensuring consumer protection but avoiding the damaging social and economic consequences. RBI has already launched the Central Bank Digital Currency CBDC-W and CBDC-R on a pilot basis for the Indian market. CBDC-W and CBDC-R refer to wholesale and retail, respectively. Digital currency is expected to complement rather than to replace the current forms of currency and it would provide an additional avenue to the users as a payment instrument.

He said that the RBI would be taking all steps to ensure that the issuance of CBDC follows a calibrated and nuanced approach with adequate safeguards to tackle any potential difficulties and risks so as to build a system which is inclusive, competitive, and responsive to innovation and tech changes. Clarifying the difference between digital currency and UPI, Choudhary said that like physical currency, digital currency issued by the central bank is the RBI's liability whereas UPI is a means of payment and any transaction through UPI is the respective bank's liability.

The CNX Nifty is currently trading at 17997.95, down by 129.40 points or 0.71% after trading in a range of 17965.65 and 18050.45. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 3.09%, Cipla up by 2.06%, Sun Pharma up by 1.32%, Dr. Reddy's Lab up by 0.56% and Reliance Industries up by 0.34%. On the flip side, Tata Motors down by 2.90%, Adani Ports & SEZ down by 2.70%, Adani Enterprises down by 2.11%, Hindalco down by 2.09% and Tata Steel down by 2.04% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 242.43 points or 0.91% to 26,265.44, Straits Times declined 14.41 points or 0.44% to 3,255.12, Hang Seng lost 100.78 points or 0.51% to 19,578.44, Taiwan Weighted plunged 175.68 points or 1.22% to 14,267.26, KOSPI fell 33.38 points or 1.42% to 2,323.35 and Jakarta Composite was down by 15.68 points or 0.23% to 6,808.75, while Shanghai Composite was up by 0.09 points to 3,054.52.