Indian markets make gap-down opening ahead of F&O expiry

Indian equity indices made gap-down opening of F&O series expiry session amid weak global cues. Domestic markets are trading lower with over half a percent cut in early deals amid foreign fund outflows. Foreign institutional investors (FIIs) have net-offloaded shares worth Rs 872.59 crore on December 28, as per provisional data available on the NSE. Selling in most of the sector indices, led by Realty, Auto and Utilities, also added pressure on the local equities. Some cautiousness came in with RBI Monetary Policy Committee (MPC) Member Ashima Goyal’s statement that the government should not go in for an 'aggressive fiscal consolidation' in the upcoming budget as global risks have not abated.

Global cues remained lackluster with all the Asian markets trading lower following the broadly negative cues from Wall Street overnight, amid ongoing concerns over the deteriorating health of the global economy and the possibility of higher interest rates leading to a recession. The post opening surge in Covid-19 cases in China is also dampening market sentiment.

Back home, aviation industry stocks were trading lower despite Union Minister Jyotiraditya Scindia’s statement that the country's civil aviation sector is witnessing a very strong V-shaped recovery with encouraging domestic passenger numbers, and the growth will continue in the coming years. In stock specific developments, Tata Steel gained after raising its stake in Tata Steel Advanced Materials. JSW Energy advanced after completing acquisition of 700 MW Ind-Barath Energy (Utkal) for Rs 1,047.60 crore through insolvency proceedings.

The BSE Sensex is currently trading at 60529.53, down by 380.75 points or 0.63% after trading in a range of 60527.09 and 60685.13. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.92%, while Small cap index was down by 0.43%.

The only gaining sectoral index on the BSE was Healthcare up by 0.17%, while Realty down by 1.31%, Auto down by 0.96%, Utilities down by 0.92%, Power down by 0.91%, Oil & Gas down by 0.74% were the top losing indices on BSE.

The few gainers on the Sensex were Tata Steel up by 0.68%, Sun Pharma up by 0.62% and Bharti Airtel up by 0.35%. On the flip side, Tata Motors down by 1.29%, Bajaj Finance down by 1.20%, Bajaj Finserv down by 0.96%, Ultratech Cement down by 0.95% and Maruti Suzuki down by 0.95% were the top losers.

Meanwhile, RBI Monetary Policy Committee (MPC) Member Ashima Goyal said the government should not go in for an 'aggressive fiscal consolidation' in the upcoming budget as global risks have not abated. She further said subsidies are expected to come down as food and energy inflation moderates. WPI inflation in food articles in November was 1.07 per cent against 8.33 per cent in the previous month. In the 'fuel and power' basket, inflation was 17.35 per cent last month.

She said ‘Given fears of a global slowdown, this is not the time for aggressive consolidation. Sticking to small pre-announced steps on the path will minimise growth sacrifice, while moderating demand and the current account deficit, thus lowering the risk premium that keeps spreads high and raises the cost of government and private borrowing’.

According to Goyal, the strategy includes prioritising investment while giving essential support for the vulnerable. She said ‘Better composition of government expenditure and other supply-side action has enabled excellent monetary-fiscal coordination that has strengthened Indian macros’. While noting that debt ratios came down sharply last year under higher growth, she said institutions and incentives have to be strengthened to help sustainably implement the strategy including in states. According to Goyal, supply-side action also contributed and inflation is already within the tolerance band, without hurting the nascent growth recovery. She asserted ‘India has handled the shocks better than most major economies’.

The CNX Nifty is currently trading at 18010.80, down by 111.70 points or 0.62% after trading in a range of 18009.80 and 18061.00. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 0.79%, Tata Steel up by 0.73%, UPL up by 0.57%, Sun Pharma up by 0.54% and ONGC up by 0.49%. On the flip side, Tata Motors down by 1.27%, Bajaj Auto down by 1.22%, Ultratech Cement down by 1.12%, Tata Consumer Products down by 1.11% and Bajaj Finance down by 1.08% were the top losers.

All the Asian markets are trading in red; Nikkei 225 slipped 303.45 points or 1.15% to 26,037.05, Straits Times lost 29.51 points or 0.90% to 3,237.46, Hang Seng plunged 216.71 points or 1.09% to 19,682.20, Taiwan Weighted fell 132.67 points or 0.94% to 14,040.43, KOSPI declined 39.23 points or 1.72% to 2,241.22, Jakarta Composite weakened 9.88 points or 0.14% to 6,840.64 and Shanghai Composite was down by 9.60 points or 0.31% to 3,077.80.