Markets trade flat with negative bias; HUL slips over 2%

Indian equity benchmarks made cautious start on last trading session of the week amid overnight losses on the Wall Street on recession worries. Markets are hovering around neutral lines with negative bias and struggling for direction as investors remained on sidelines and refrained from taking any long positions. Though, downside remained capped as after continuous selling from the FIIs, overseas investors finally turned net buyers of local shares on January 19 to the tune of Rs 400 crore. Some optimism came as Indian rupee opened higher at 81.26 per dollar on against previous close of 81.36. Positive cues from Asian counterparts also aided the domestic sentiments with all the Asian markets trading higher despite the broadly negative cues from global markets overnight, as the expected weak inflation figures from Japan was already been accounted for by the market. Taiwan is closed through January 30 for the Lunar New Year holidays.

Back home, the sugar industry stocks were in focus as Food Secretary Sanjeev Chopra said the government will take a decision next month on increasing the sugar export quota from current 60 lakh tonnes after assessing the domestic production and internal demand. In stock specific developments, Hindustan Unilever (HUL) shares fell on profit-booking after the company’s Q3 results beat street estimates. Reliance Industries (RIL) remained in limelight ahead of third quarter results (Q3FY23).

The BSE Sensex is currently trading at 60811.55, down by 46.88 points or 0.08% after trading in a range of 60750.84 and 60901.16. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.26%, while Small cap index was up by 0.05%.

The top gaining sectoral indices on the BSE were Bankex up by 0.51%, Power up by 0.40%, Utilities up by 0.37%, PSU up by 0.37%, Industrials up by 0.13%, while Consumer Durables down by 1.36%, FMCG down by 0.75%, Telecom down by 0.60%, Healthcare down by 0.57%, Energy down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.02%, HDFC Bank up by 0.92%, HDFC up by 0.84%, Indusind Bank up by 0.78% and Tata Motors up by 0.75%. On the flip side, Hindustan Unilever down by 2.38%, Sun Pharma down by 1.87%, Nestle down by 1.32%, Asian Paints down by 1.06% and Titan Company down by 1.02% were the top losers.

Meanwhile, highlighting that the macro-economic stability is getting entrenched, a Reserve Bank of India (RBI) article stated that India will be a $3.7 trillion economy in 2023, maintaining its lead over the UK as the fifth largest economy of the world. The article titled ‘State of the Economy’ published in the January bulletin of the RBI said recent data arrivals indicate that the first milestone of monetary policy is being passed – bringing inflation into the tolerance band. The article authored by a team lead by RBI Deputy Governor Michael Debabrata Patra said the objective during 2023 is to tether inflation therein so that it aligns with the target by 2024 - the second milestone.

The article said ‘At current prices and exchange rates, therefore, India will be a $3.7 trillion economy in 2023, maintaining its lead over the UK as the fifth largest economy of the world’. It said a slowdown in growth with possibilities of recession in large swathes of the global economy has become the baseline assessment even as inflation may average well above targets. Emerging markets are appearing more resilient than in the year gone by, but their biggest risks in 2023 stem from US monetary policy and the US dollar. It said ‘In India, the softening of commodity prices and other costs amidst strong revenues appears to have boosted corporate performance’.

The article further said fiscal consolidation is underway at central and sub-national levels, graduated to nurture the pace of the economic recovery. It added lead indicators suggest that the current account deficit is on course to narrow through the rest of 2022 and 2023. It also said ‘…2023 may well be the opening ajar of a window in which India’s time on the world stage is arriving’.

With the merchandise trade deficit reaching an all-time high of $83.5 billion in a quarter, and an increase in net outgo from the income account, the current account deficit (CAD) increased to 4.4 per cent of GDP in the second quarter of 2022-23. The CAD for April-June quarter of fiscal was revised down from 2.8 per cent to 2.2 per cent on account of downward adjustment in customs data. The article said similar adjustments may impinge on the CAD for the second quarter of 2022-23 as customs data or imports are revised.

The CNX Nifty is currently trading at 18081.70, down by 26.15 points or 0.14% after trading in a range of 18073.05 and 18118.55. There were 16 stocks advancing against 33 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Indusind Bank up by 1.20%, Power Grid up by 1.02%, HDFC Bank up by 0.95%, HDFC up by 0.87% and Tata Motors up by 0.77%. On the flip side, Hindustan Unilever down by 2.62%, Sun Pharma down by 1.84%, Nestle down by 1.38%, Asian Paints down by 1.21% and SBI Life Insurance down by 1.05% were the top losers.

All Asian markets are trading higher; Hang Seng advanced 207.27 points or 0.95% to 21,858.25, Nikkei 225 surged 53.55 points or 0.2% to 26,458.78, Jakarta Composite gained 20.16 points or 0.29% to 6,840.07, Shanghai Composite strengthened 17.5 points or 0.54% to 3,257.78, Straits Times rose 9.48 points or 0.29% to 3,285.66 and KOSPI increased 5.72 points or 0.24% to 2,386.06.a