Benchmarks magnify last session’s losses with negative start

With a negative opening, Indian equity benchmarks have extended their last session’s losses and are now trading lower by over a half percent, which dragged both the Sensex and Nifty below their psychological 59800 and 17800 levels respectively. Meanwhile, the session was also proving weak for broader indices which are trading with losses in the range of 0.30-0.55%. Sentiments were under pressure as a United Nations’ report said that global economic growth is projected to slow to 1.9% this year from an estimated 3% in 2022. The report blamed the COVID-19 pandemic, Russia's war in Ukraine, high inflation and the climate crisis. It said this would mark one of the lowest growth rates in recent decades. Further, traders remained on sidelines ahead of Union budget for FY2023-24. On the BSE sectoral front, traders were seen pilling up position in Auto, Metal, Healthcare, IT and FMCG, while selling was witnessed in Utilities, Power, Oil & Gas, Energy and Bankex.

On the global front, Asian markets were trading mostly higher on Friday, as Wall Street’s major indices gained after the US economy grew more than expected. The US markets ended higher on Thursday as traders combed through the latest batch of corporate earnings and fourth-quarter gross domestic product that came in above expectations. Back home, in stock specific development, Tata Motors surged as the company posted a consolidated net profit of Rs 3,043 crore in the third quarter of fiscal 2022-23 (Q3FY23), after reporting losses for seven straight quarters.

The BSE Sensex is currently trading at 59721.08, down by 483.98 points or 0.80% after trading in a range of 59543.01 and 60166.90. 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 0.31%, while Small cap index down by 0.53%.

The top gaining sectoral indices on the BSE were Auto up by 1.59%, Metal up by 0.40%, Healthcare up by 0.36%, IT up by 0.10% and FMCG up by 0.09%, while Utilities down by 4.17%, Power down by 3.85%, Oil & Gas down by 3.28%, Energy down by 3.17% and Bankex down by 1.75% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 6.53%, ITC up by 2.00%, Mahindra & Mahindra up by 1.29%, Tata Steel up by 1.16% and Bajaj Finserv up by 0.89%. On the flip side, ICICI Bank down by 2.57%, HDFC down by 2.29%, Axis Bank down by 1.90%, SBI down by 1.88% and HDFC Bank down by 1.80% were the top losers.

Meanwhile, the Chief of the Global Economic Monitoring Branch, Economic Analysis and Policy Division, UN-Department of Economic and Social Affairs Hamid Rashid in the World Economic Situation and Prospects 2023 report has said India is a bright spot in the world economy currently and is on a strong footing, projected to grow at 6.7 per cent next year, a very high growth rate relative to other G20 member countries.

He stated this is a sustainable growth rate for India. India also has a significant number of people living in poverty. So this would be a great boost. If India can sustain this growth rate in the near term, that would be good for the Sustainable Development Goals, good for poverty reduction globally.

He attributed three factors to India’s current economic strength. He said India’s unemployment rate has come down significantly in the last four years to 6.4 per cent and is lower than what it was around 2017. That means the domestic demand has been pretty strong. India’s inflation pressure also has eased quite significantly and it is expected to be about 5.5 per cent this year and 5 per cent in 2024.

This means that the country’s central bank would not have to aggressively go for monetary tightening. The third factor benefitting India is that its import bills have been lower, especially energy import cost has been lower than in the previous years. That has also helped India’s growth prospect in 2022 and 2023.

The Group of Twenty (G20) comprises 19 countries (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Türkiye, United Kingdom and United States) and the European Union.

The CNX Nifty is currently trading at 17763.15, down by 128.80 points or 0.72% after trading in a range of 17715.55 and 17884.75. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 6.53%, Bajaj Auto up by 5.72%, ITC up by 2.06%, Dr. Reddy's Lab up by 2.05% and Cipla up by 1.87%. On the flip side, Adani Ports & SEZ down by 2.95%, ICICI Bank down by 2.61%, Adani Enterprises down by 2.24%, HDFC down by 2.19% and Axis Bank down by 1.92% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted added 5.92 points or 0.04% to 14,932.93, KOSPI increased 18.63 points or 0.75% to 2,487.28, Jakarta Composite gained 49.14 points or 0.72% to 6,913.96 and Straits Times rose 13.42 points or 0.4% to 3,390.61. However, Nikkei 225 slipped 9.1 points or 0.03% to 27,353.65 and Hang Seng declined 26.47 points or 0.12% to 22,540.31.