Markets trade under pressure as weak US data rekindles recession worries

Indian equity benchmarks reversed their gears from previous session’s rally with negative start on Thursday following weakness in global peers after weak economic data from the US fueled worries about a recession and hawkish comments from Fed officials dented investor sentiment. Markets are trading lower with cut of around one third of a percent each in early deals. Domestic indices showed some volatility in the session amid weekly expiry of F&O later in the day.  Foreign fund outflows also weighted down on the sentiments. Foreign institutional investors (FII) have net-sold shares worth Rs 319.23 crore on January 18, as per provisional data available on the NSE. Traders were worried as IMF's Gita Gopinath said the global economy is facing a unique situation due to unprecedented level of high inflation and that is causing tension between monetary and fiscal policies.

On the global front, Asian markets are trading mixed, following the broadly negative cues from Wall Street overnight, on renewed concerns over the outlook for interest rates and recession fear as disappointing US data showed a more than expected drop in retail sales and industrial production. Meanwhile, Taiwan is closed through January 30 for the Lunar New Year holidays. Back home, Investors await more financial results from India Inc for domestic cue, with HUL, AU SFB, Asian Paints and L&T Technology Services due to post their earnings later today. In stock specific development, Adani Enterprises fell after announcing the floor price for its follow-on public offer.

The BSE Sensex is currently trading at 60864.17, down by 181.57 points or 0.30% after trading in a range of 60768.00 and 60970.56. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.15%, while Small cap index was down by 0.08%.

The sole gaining sectoral index on the BSE was Oil & Gas up by 0.21%, while Consumer Durables down by 1.11%, Utilities down by 1.07%, Power down by 0.93%, TECK down by 0.58%, Realty down by 0.56% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.41%, Sun Pharma up by 0.42%, HDFC Bank up by 0.21%, NTPC up by 0.21% and Mahindra & Mahindra up by 0.18%. On the flip side, Titan Company down by 1.55%, Kotak Mahindra Bank down by 1.52%, Ultratech Cement down by 1.17%, Hindustan Unilever down by 1.10% and Bajaj Finserv down by 0.87% were the top losers.

Meanwhile, the International Monetary Fund (IMF) Deputy Managing Director Gita Gopinath has hailed India for doing better than many global economies, while she cautioned that the country needs to work on labour markets and land. She also cautioned against growing fragmentation globally and said it hurt the global growth rate.

She said the Covid-19 pandemic and the Russia-Ukraine war has made countries much more concerned about national security and economic security, which is causing them to undertake policies that could lead to greater fragmentation. She said India though has been receiving lots of positive sentiments but at the same time added that greater reforms are needed for foreign direct investment in the manufacturing sector.

She further said a lot of businesses and companies are looking towards India as an investment destination as they try to diversify away from countries including China. Talking about India's growth rate, she said that in the current fiscal, it is 6.8 per cent while it would be 6.1 per cent for the next financial year.

The CNX Nifty is currently trading at 18107.35, down by 58.00 points or 0.32% after trading in a range of 18079.30 and 18139.70. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 1.48%, UPL up by 1.39%, HDFC Life Insurance up by 0.82%, ONGC up by 0.47% and BPCL up by 0.46%. On the flip side, Adani Enterprises down by 3.21%, Titan Company down by 1.54%, Kotak Mahindra Bank down by 1.52%, Hindalco down by 1.42% and Ultratech Cement down by 1.10% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 398.29 points or 1.49% to 26,392.83, Straits Times fell 11.79 points or 0.36% to 3,277.76 and Hang Seng declined 3.12 points or 0.01% to 21,674.88. On the other hand, Jakarta Composite gained 41.67 points or 0.62% to 6,807.46, KOSPI increased 7.21 points or 0.3% to 2,375.53 and Shanghai Composite strengthened 4.19 points or 0.13% to 3,228.60.