Domestic markets extend opening losses; Sensex slips over 200 points

Indian equity benchmarks made negative start on Friday despite positive global cues. Easing retail inflation of the country failed to cheer domestic investors. India’s retail inflation or CPI fell to a one-year low of 5.72% in December, owing to a sharp deflation (-15.08%) in vegetables and easing price pressures in the broader food and beverages category. Markets soon extend their losses and are trading lower with cut of around one third of a percent each mainly due to selling in Capital Goods, IT and TECK stocks. Traders were concerned as a private report stated that the Centre as well as state governments are likely to budget for higher market borrowings next fiscal even though the Union Budget may peg a lower-than-expected fiscal deficit at 5.8 per cent of GDP. Though, market participants overlooked the government data showing that India’s factory output rebounded to a five-month high in November. IIP accelerated to 7.1% in November 2022 after contracting in October.

Most of the Asian markets are trading higher, following the broadly positive cues from global markets overnight, as data showing a drop in U.S. consumer prices inflation in the month of December, the first time in more than two and a half years, raised expectations the US Fed will slow down the pace of its interest rate hikes in the coming months. Back home, in stock specific developments, HCL Technologies fell after trimming its FY23 revenue guidance. Wipro remained under pressure ahead of its Q3 result to be out later in the day. On the other hand, Cyient jumped on reporting a 37 percent rise in quarterly revenue.

The BSE Sensex is currently trading at 59748.63, down by 209.40 points or 0.35% after trading in a range of 59628.43 and 60044.96. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.24%, while Small cap index was up by 0.16%.

The top gaining sectoral indices on the BSE were Metal up by 0.68%, PSU up by 0.48%, Power up by 0.31%, Utilities up by 0.29%, Auto up by 0.20%, while Capital Goods down by 0.89%, IT down by 0.76%, TECK down by 0.50%, Consumer Durables down by 0.46%, Industrials down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.52%, Mahindra & Mahindra up by 1.05%, Ultratech Cement up by 0.80%, Indusind Bank up by 0.79% and NTPC up by 0.75%. On the flip side, HCL Technologies down by 2.14%, Larsen & Toubro down by 1.62%, Wipro down by 1.51%, Tech Mahindra down by 1.21% and Reliance Industries down by 1.05% were the top losers.

Meanwhile, India's industrial growth, as per the Index of Industrial Production (IIP), accelerated to 7.1 percent in November 2022. IIP growth returned to positive territory in November after it had contracted by 4 percent in October - the industry's worst performance in 26 months. The IIP grew by 1 per cent in November 2021. The IIP in November stood at 137.1, which is higher as compared to 128 in the year-ago period. In October 2022, an IIP of 129.3 was clocked. For April-November 2022, the country's industrial output is up 5.5 percent on a year-on-year basis, down from 7.1 percent in the first eight months of FY22.

As per the IP data released by the National Statistical Office (NSO), the manufacturing sector‘s output grew by 6.1 per cent in November 2022 as compared to 0.3 per cent in November 2021. The mining output rose by 9.7 per cent over 4.9 per cent in the same month of previous year and power generation increased by 12.7 per cent during the month under review as against 2.1 per cent in the corresponding month of previous year. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of November 2022 stood at 122.7, 136.7 and 166.7 respectively.

Besides, Capital goods which had contracted 1.7% in October, bounced up 20.7% in November. Consumer durables output rebounded to grow 5.1% after three months of contraction. As per Use-based classification, the indices stood at 132.5 for Primary Goods, 99.1 for Capital Goods, 145.6 for Intermediate Goods and 159.6 for Infrastructure/ Construction Goods for the month of November 2022.  Further, the indices for Consumer durables and Consumer non-durables stood at 112.0 and 161.1 respectively for the month of November 2022.

The CNX Nifty is currently trading at 17800.30, down by 57.90 points or 0.32% after trading in a range of 17775.85 and 17872.60. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 1.44%, Mahindra & Mahindra up by 1.09%, NTPC up by 0.78%, Indusind Bank up by 0.77% and Hero MotoCorp up by 0.73%. On the flip side, HCL Technologies down by 1.94%, Apollo Hospital down by 1.68%, Larsen & Toubro down by 1.52%, Wipro down by 1.47% and Tech Mahindra down by 1.22% were the top losers.

Asian markets are trading mostly in green; Straits Times added 7.45 points or 0.23% to 3,275.23, Hang Seng rose 23.71 points or 0.11% to 21,537.81, Taiwan Weighted rose 91.25 points or 0.62% to 14,822.89, KOSPI advanced 17.84 points or 0.75% to 2,382.94 and Shanghai Composite was up by 17.64 points or 0.56% to 3,181.09. On the other hand, Nikkei 225 slipped 272.91 points or 1.03% to 26,176.91 and Jakarta Composite was down by 22.50 points or 0.34% to 6,607.43.