Markets trade marginally lower in late morning deals

Indian equity markets were trading marginally in red in late morning deals amid concerns over the US Federal Reserve’s call for another interest rate hike to tackle inflation. Bajaj Finance was the top laggard on Sensex and Nifty, down by around 7 per cent, after the company reported that assets under management (AUM) grew by 27 per cent year-on-year (YoY), lower than market expectations, to Rs 2.30 trillion as of December 31, 2022.  However, losses remain capped as traders were getting some encouragement on report that Bibek Debroy, chairman, Economic Advisory Council to the Prime Minister, said India's GDP will be close to $20 trillion by 2047 and per capita income may reach $10,000 (at current value of USD). Tyre Industry related stocks were trading higher amid continued slide in crude oil prices. Meanwhile, Automotive Tyre Manufacturers Association (ATMA) has said the Indian tyre industry will be able to scale a turnover of Rs 1 lakh crore in the next three years from Rs 75,000 crore currently on the back of new capacities available.

On the global front, Asian markets were mostly trading in green following the positive cues from US markets overnight. Back home, on the sectoral front, traders were seen pilling up position in FMCG, Auto, Oil & Gas, Metal and Energy, while selling was witnessed in Bankex, Consumer Durables, Utilities down and Power.

The BSE Sensex is currently trading at 60504.57, down by 152.88 points or 0.25% after trading in a range of 60498.58 and 60877.06. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.13%, while Small cap index up by 0.15%.

The top gaining sectoral indices on the BSE were FMCG up by 1.12%, Auto up by 0.86%, Oil & Gas up by 0.81%, Metal up by 0.74% and Energy up by 0.71%, while Bankex down by 0.53%, Consumer Durables down by 0.17%, Utilities down by 0.17% and Power down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.35%, HCL up by 1.23%, Hindustan Unilever up by 1.14%, Nestle up by 1.12% and NTPC up by 1.05%. On the flip side, Bajaj Finance down by 7.00%, Bajaj Finserv down by 4.82%, ICICI Bank down by 1.42%, Power Grid down by 1.35% and Indusind Bank down by 0.77% were the top losers.

Meanwhile, rating agency ICRA in its recent research report has said that the evolving global macroeconomic headwinds could moderate growth for Indian IT services industry over the medium term. It has cited that given the Indian IT services industry generates about 60-65 per cent of revenues from the US market and 20-25 per cent from the European market, it remains susceptible to macroeconomic uncertainties and adverse regulatory changes in these key operating markets.

According to the report, growth in the BFSI (Banking, Financial Services and Insurance) segment, one of the key segments for IT companies, has tapered more than other segments in recent quarters, and this is partially attributable to lower lending activity. If the macroeconomic headwinds persist, the mortgage lending and the retail segments are expected to witness relatively higher moderation in growth, compared to the manufacturing and healthcare segments. While the current healthy order book position from clients will support healthy growth over the near term, the evolving macroeconomic situation is likely to result in lower order inflows going forward.

ICRA stated that management commentary across companies suggests that decision-making on incremental IT spending has slowed down, with the focus shifting towards prioritising critical projects. It said the industry is also grappling with a surge in employee attrition in recent times, led by the demand-supply gap, especially for digital tech talent. However, ICRA maintains its stable outlook on the sector as it expects minimal impact on the credit profile of most of the industry players as their balance sheets remain strong.

The CNX Nifty is currently trading at 18022.35, down by 20.60 points or 0.11% after trading in a range of 18013.50 and 18120.30. There were 31 stocks advancing against 19 stocks declining on the index.

The top gainers on Nifty were Britannia up by 2.55%, HDFC Life Insurance up by 1.89%, Bajaj Auto up by 1.81%, Tata Consumer up by 1.72% and JSW Steel up by 1.64%. On the flip side, Bajaj Finance down by 6.86%, Bajaj Finserv down by 4.69%, Apollo Hospital down by 1.50%, ICICI Bank down by 1.47% and Power Grid down by 1.18% were the top losers.

Asian markets were trading mostly in green, Nikkei 225 surged 98.71 points or 0.38% to 25,815.57, Taiwan Weighted strengthened 101.92 points or 0.72% to 14,301.05, Straits Times advanced 53.63 points or 1.65% to 3,296.09, Shanghai Composite gained 29.87 points or 0.96% to 3,153.39, KOSPI rose 7.27 points or 0.32% to 2,263.25 and Hang Seng increased 261.04 points or 1.26% to 21,054.15. However, Jakarta Composite lost 117.53 points or 1.73% to 6,695.71.