Benchmarks manage to cut some of losses

In a volatile session, Indian equity benchmarks managed to cut some of their losses in late morning deals, but remained in red terrain, amid negative cues from other Asian markets. Losses got trimmed, as the International Monetary Fund (IMF) said that inflation in India is expected to come down from 6.8 percent in the current fiscal year ending March 31 to 5 percent the next fiscal, and then drop further to 4 percent in 2024. Adding some relief among traders, the Union Minister of Agriculture and Farmers Welfare, Narendra Singh Tomar has said that India is developing rapidly with science and innovation, both of them are deeply connected with the future of India.

On the global front, Asian markets were trading lower, after industrial production in Japan was down a seasonally adjusted 0.1 percent on month in December. That beat expectations for a decline of 1.2 percent following the 0.2 percent increase in November. On a yearly basis, industrial production slumped 2.8 percent, missing forecasts for a fall of 2.0 percent following the 0.9 percent gain in the previous month. Back home, jewellery industry stocks were in watch, as the World Gold Council (WGC) said that India's gold consumption in 2022 fell 3% from a year earlier, as a rally in local prices to near-record highs curtailed bullion demand during the key December quarter.

The BSE Sensex is currently trading at 59381.50, down by 118.91 points or 0.20% after trading in a range of 59104.59 and 59787.63. There were 14 stocks advancing against 15 stocks declining, while one stock remained unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 1.25%, while Small cap index was up by 1.58%.

The top gaining sectoral indices on the BSE were PSU up by 2.35%, Telecom up by 2.26%, Metal up by 1.54%, Industrials up by 1.44% and Utilities up by 1.43%, while IT down by 1.17%, TECK down by 0.98%, Energy down by 0.73%, Oil & Gas down by 0.50% and FMCG down by 0.29% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation of India up by 2.95%, SBI up by 2.64%, Ultratech Cement up by 2.25%, Tata Motors up by 1.61% and Mahindra & Mahindra up by 1.60%. On the flip side, Tech Mahindra down by 3.12%, Bajaj Finance down by 1.86%, TCS down by 1.78%, Sun Pharma down by 1.41% and HCL Technologies down by 1.23% were the top losers.

Meanwhile, rating agency Crisil in its latest report has said that distribution companies (discoms) have to brace for an increase of as much as Rs 11,000 crore on-year in their power purchase cost in the first half of next fiscal (H1 of FY24) following the government’s directive to thermal power plants (gencos) to increase blending of imported coal to 6% of their requirement until September.

The report stated that the order, dated January 9, is the second blending directive this fiscal and is aimed at averting a power crisis from coal shortage this summer due to domestic supply issues. The first directive, in April, was for domestic power plants to blend 10% of their coal requirement. This led to an increase in blending to 5.4% during April-November this fiscal from a meager 1.2% last fiscal. CRISIL expects the blending level to sustain for the rest of this fiscal, raising the cost for power utilities by Rs 42,000 crore on-year and pushing up the variable cost of power procurement for the utilities by Rs 0.226 per unit.

According to the report, power demand had risen a strong 10% on-year in April-December this fiscal. In the first three weeks of January, the growth was even higher, at 14%, due to a severe cold wave in many parts of the country - indeed, peak demand during the period surged 12% on-yearto 205.6 GW, a historic high for the month. Thus, even after adjusting for a low base in the year-ago period, growth for the full fiscal will be in healthy double-digits. At the other end, supply fell short and energy shortage increased 90% on-year in January, lifting short-term prices by a whopping 80%1 on-year. The directive to increase imported coal blending are aimed at plugging this shortage.

The CNX Nifty is currently trading at 17614.55, down by 34.40 points or 0.19% after trading in a range of 17537.55 and 17735.70. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Power Grid Corporation of India up by 2.93%, SBI up by 2.67%, Adani Ports and Special Economic Zone up by 2.65%, Adani Enterprises up by 2.59% and BPCL up by 2.51%. On the flip side, Tech Mahindra down by 3.18%, Britannia Industries down by 1.95%, Bajaj Finance down by 1.82%, TCS down by 1.76% and HDFC Life Insurance down by 1.59% were the top losers.

All Asian markets were trading lower; Hang Seng declined 405.32 points or 1.84% to 21,664.41, Taiwan Weighted lost 228.62 points or 1.5% to 15,265.20, Nikkei 225 slipped 106.29 points or 0.39% to 27,327.11, Jakarta Composite plunged 29.78 points or 0.43% to 6,842.70, KOSPI dropped 25.39 points or 1.05% to 2,425.08, Straits Times fell 23.6 points or 0.7% to 3,354.69 and Shanghai Composite weakened 14.59 points or 0.45% to 3,254.73.