Weak trade continues on Dalal Street

Indian equity benchmarks continued their weak trade in morning deals dragged down by TECK, IT and Banking stocks amid a weak trend in global markets. Unabated foreign fund outflows also negatively impacted the domestic equity market. According to exchange data, foreign Institutional Investors (FIIs) offloaded shares worth Rs 203.13 crore on Monday. Traders remained cautious as the country's largest lender SBI dismissed the 'K-shaped recovery' critique, saying the pandemic was a 'leveler' which helped in reducing inequalities. Traders overlooked Chief Economic Advisor (CEA) V Anantha Nageswaran’s statement that the Indian economy will be $3 trillion by the end of the current 2022-23 fiscal and is expected to be $7 trillion in the next seven years. He also said that the calendar year 2023 began in the context of the continuing conflict between Russia and Ukraine, which will create geo-political and geo-economic uncertainties. 

On the global front, Asian markets are trading mostly in red following hawkish comments from two U.S. Federal Reserve officials overnight with investors turning cautious ahead of key inflation data, while China's reopening after COVID-19 restrictions pushed commodities higher. Back home, aviation industry stocks remained in watch as the International Air Transport Association (IATA) said Asia-Pacific airlines saw their air cargo volumes decrease by 18.6 per cent in November 2022, compared to the same month in 2021. As per the IATA, this was the worst performance of all regions and a decline in performance compared to October (minus 14.7 per cent).

The BSE Sensex is currently trading at 60272.38, down by 474.93 points or 0.78% after trading in a range of 60249.95 and 60809.65. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.30%, while Small cap index was down by 0.19%.

The top gaining sectoral indices on the BSE were Auto up by 0.65%, Metal up by 0.44%, Capital Goods up by 0.28%, Oil & Gas up by 0.09% and Healthcare up by 0.09%, while TECK down by 1.46%, IT down by 1.34%, Bankex down by 1.00%, PSU down by 0.79% and Telecom down by 0.74% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 6.20%, Tata Steel up by 1.15%, Power Grid Corp up by 1.03%, Mahindra & Mahindra up by 0.96% and Hindustan Unilever up by 0.65%. On the flip side, TCS down by 2.39%, SBI down by 1.78%, Bharti Airtel down by 1.76%, HDFC Bank down by 1.71% and HDFC down by 1.52% were the top losers.

Meanwhile, Credit rating agency -- Moody's Investors Service in its latest report has said that the credit worthiness outlook for sovereigns in the Asia-Pacific (APAC) region, including India for 2023 is stable as compared to the negative outlook for sovereigns globally. It stated the debt sustainability and financial stability are relatively well anchored in the region, with contained government liquidity risks, broadly stable debt dynamics and generally sound external positions.

According to it, the gross domestic product (GDP) growth will stabilise close to potential levels and outperform other regions, despite higher global inflation and tighter financial conditions. Most sovereigns have begun fiscal consolidation, but social pressures are slowing progress.

As regards India, which is in post-pandemic recovery mode, Moody's expects output gaps to continue. The debt affordability has been anchored in India, Malaysia and Thailand as they have a large institutional investor base and banking systems. It mentioned elevated commodities prices will keep spending on food and fuel subsidies or other measures high, with little impetus to reduce support, particularly for economies with elections approaching in 2023 or early 2024, including Bangladesh and India.

The CNX Nifty is currently trading at 17975.60, down by 125.60 points or 0.69% after trading in a range of 17965.45 and 18127.60. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 6.44%, Tata Steel up by 1.11%, Hindalco up by 1.00%, Power Grid Corporation up by 0.96% and Apollo Hospital up by 0.89%. On the flip side, TCS down by 2.37%, Bharti Airtel down by 1.86%, SBI down by 1.79%, HDFC Bank down by 1.77% and Eicher Motors down by 1.73% were the top losers.

Asian markets are trading mostly in red; Jakarta Composite lost 101.45 points or 1.52% to 6,586.82, Hang Seng decreased 72.32 points or 0.34% to 21,316.02, Straits Times trembled 28.95 points or 0.88% to 3,276.72, Shanghai Composite declined 5.67 points or 0.18% to 3,170.41 and KOSPI fell 4.40 points or 0.19% to 2,345.79.

On the flip side, Taiwan Weighted strengthened 14.93 points or 0.1% to 14,767.14 and Nikkei 225 surged 188.62 points or 0.73% to 26,162.47.