Domestic equity indices trade lower with cut of over quarter percent

Domestic equity indices were trading lower with cut of over quarter a percent in afternoon session on account of selling by fund and retail investors. Meanwhile, the session was also proving weak for broader indices which were trading with loss in the range of 0.20-0.25%. There was cautiousness in the markets with private report stating that India is set to post a balance of payment (BoP) deficit for the second straight year in the next fiscal, which would be the first such instance in two decades. A report said that it expects the country to record a BoP deficit of $24 billion this fiscal year and $5.5 billion in the next, against a surplus of $47.5 billion last year. On the BSE sectoral front, traders were seen pilling up position in FMCG, Oil & Gas, Industrials, Capital Goods and PSU, while selling was witnessed in IT, TECK, Bankex, Healthcare and Utilities.

On the global front, Asian markets were mostly trading in green despite the negative cues from US markets overnight. The Japanese stock market was trading higher as traders reacted to domestic data that showed services sector activity growth for showed a fourth-consecutive month in December. Back home, in stock specific development, IDBI Bank surged after capital market regulator Securities and Exchange Board of India acceded to the central government’s request to reclassify its shareholding in the Bank after its disinvestment as public holding.

The BSE Sensex is currently trading at 60132.65, down by 220.62 points or 0.37% after trading in a range of 60042.52 and 60537.63. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.22%, while Small cap index down by 0.23%.

The top gaining sectoral indices on the BSE were FMCG up by 0.33%, Oil & Gas up by 0.21%, Industrials up by 0.16%, Capital Goods up by 0.13% and PSU up by 0.12%, while IT down by 1.12%, TECK down by 1.11%, Bankex down by 0.67%, Healthcare down by 0.36% and Utilities down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.00%, Reliance Industries up by 0.98%, ITC up by 0.61%, Mahindra & Mahindra up by 0.61% and Nestle up by 0.47%. On the flip side, Bajaj Finserv down by 2.29%, TCS down by 1.92%, Bajaj Finance down by 1.77%, Tech Mahindra down by 1.46% and ICICI Bank down by 1.34% were the top losers.

Meanwhile, ratings agency ICRA in its latest report has said that continued pricing pressures in the US and European markets coupled with regulatory overhang and cost inflation will affect profit margins of major Indian pharmaceutical firms. It said the revenues for a sample set of 16 Indian pharmaceutical firms are expected to grow by 4-6 per cent in FY2023, marginally lower than the growth of 7.7 per cent in FY2022. However, for FY2024, it expects the sample set revenues to grow by 6-8 per cent primarily driven by the domestic and emerging markets. 

The ratings agency said while revenues for these firms in FY23 will be supported by 5-7 per cent year-on-year growth in the domestic market and 4-5 per cent in the US business, revenues from the European market are expected to contract marginally, given the ongoing macroeconomic challenges and the large base of the previous fiscal which was supported by vaccine sales. Revenues of ICRA's sample set from Europe continue to witness headwinds such as muted demand, the depreciation of the euro against the rupee, and pricing pressures due to increasing competition.

As for the US market, the ratings agency said in line with the trends in the recent past, mid-to-high single digit pricing pressure is expected to continue over the near term for generics, with some normalisation expected only after a few quarters. It said most major Indian pharmaceutical companies continue to focus on emerging markets to fuel their growth, given that they continue to face pricing pressure in the US and the European markets. It added that the growth in emerging markets also continues to be driven by new product launches, strong demand, and depreciation of the rupee against certain currencies.

The CNX Nifty is currently trading at 17934.60, down by 57.55 points or 0.32% after trading in a range of 17903.80 and 18047.40. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 1.51%, NTPC up by 0.97%, Britannia up by 0.94%, Reliance Industries up by 0.91% and BPCL up by 0.82%. On the flip side, Bajaj Finserv down by 2.30%, TCS down by 1.85%, Bajaj Finance down by 1.80%, JSW Steel down by 1.73% and ICICI Bank down by 1.43% were the top losers.

Asian markets were trading mostly in green, Nikkei 225 surged 133.86 points or 0.52% to 25,954.66, Taiwan Weighted strengthened 58.87 points or 0.41% to 14,359.92, Shanghai Composite gained 2.04 points or 0.06% to 3,157.26, KOSPI rose 15.87 points or 0.7% to 2,280.52 and Jakarta Composite soared 48.27 points or 0.73% to 6,702.11, while Straits Times trembled 18.84 points or 0.57% to 3,273.82 and Hang Seng decreased 105.61 points or 0.5% to 20,946.56.