Domestic indices trim losses in late morning deals

Domestic equity indices trimmed some their losses in late morning deals on the back of buying in Metal, IT and TECK stocks. Traders were getting some encouragement as data showing a slowdown in U.S. inflation and encouraging macroeconomic data on the domestic front. 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. Meanwhile, India’s retail inflation or consumer price index (CPI) declined to a one-year low of 5.72 per cent in December 2022. However, there was some cautiousness in the markets as Icra Ratings in its latest report has said the Centre as well as state governments are likely to budget for higher market borrowings next fiscal (FY24) even though the Union Budget may peg a lower-than-expected fiscal deficit at 5.8 per cent of gross domestic product (GDP).

On the global front, Asian markets were mostly trading in green following the broadly positive cues from US 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 the stock specific development, L&T Technologies Services (LTTS) dipped after the company agreed to acquire the Smart World & Communications business (SWC) of its parent company Larsen & Toubro (L&T) by way of slump sale for a consideration of Rs 800 crore.

The BSE Sensex is currently trading at 59850.04, down by 107.99 points or 0.18% 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 in red; the BSE Mid cap index was down by 0.39%, while Small cap index down by 0.02%.

The top gaining sectoral indices on the BSE were Metal up by 0.85%, TECK up by 0.39%, IT up by 0.20%, PSU up by 0.16% and Power up by 0.02%, while Capital Goods down by 0.87%, Consumer Durables down by 0.63%, Industrials down by 0.49%, Healthcare down by 0.40% and FMCG down by 0.38% were the losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.41%, Infosys up by 1.34%, Indusind Bank up by 0.67%, Ultratech Cement up by 0.62% and Maruti Suzuki up by 0.59%. On the flip side, Larsen & Toubro down by 1.59%, HCL down by 1.19%, Kotak Mahindra Bank down by 1.07%, Asian Paints down by 0.92% and ITC down by 0.88% were the top losers.

Meanwhile, with softening prices of food items, India’s retail inflation or consumer price index (CPI) declined to a one-year low of 5.72 per cent in December 2022. The CPI was at 5.88 per cent in November 2022 and 5.66 per cent in December 2021. With this, the headline inflation number remained below the upper limit of the Reserve Bank of India’s (RBI’s) medium-term target of 2-6% for the second straight month. Retail inflation is on a downward trajectory since October. The food inflation rate fell to 4.19 per cent in December, from 4.67 per cent in November.

The National Statistical Office (NSO) under Ministry of Statistics and Programme Implementation in its data has showed that Rural CPI (General) in December 2022 stood at 6.05 per cent as against 6.09 per cent in November. The Urban CPI (General) stood at 5.39 per cent in December as against 5.68 per cent in November. The index value for Rural, Urban and Combined CPI (General) stood at 177.1, 174.1 and 175.7 respectively, in December 2022.

Inflation in the food basket was at 4.19 per cent in December as against 4.67 per cent in November. Inflation rate for vegetables contracted by 15.08 per cent against a contraction of 8.08 per cent last month. Meanwhile, inflation rate for fuel and light increased mildly to 10.97 per cent against 10.62 per cent in the preceding month. Inflation rate for cereals came in at 13.79 per cent as against 12.96 per cent in November.

The CNX Nifty is currently trading at 17825.20, down by 33.00 points or 0.18% after trading in a range of 17774.25 and 17872.60. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.16%, Infosys up by 1.33%, Divi's Lab up by 1.07%, Hero MotoCorp up by 0.77% and Grasim Industries up by 0.76%. On the flip side, Larsen & Toubro down by 1.59%, HCL down by 1.37%, Apollo Hospital down by 1.10%, Kotak Mahindra Bank down by 1.09% and ITC down by 1.02% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 102.07 points or 0.69% to 14,833.71, Straits Times advanced 6.93 points or 0.21% to 3,274.71, Shanghai Composite gained 15.03 points or 0.48% to 3,178.48, KOSPI rose 20.59 points or 0.87% to 2,385.69 and Hang Seng increased 17.47 points or 0.08% to 21,531.57. However, Nikkei 225 slipped 345.57 points or 1.31% to 26,104.25 and Jakarta Composite lost 17.71 points or 0.27% to 6,612.22.