Domestic equity indices trade in deep red on weak global cues

Indian equity markets magnified their losses and were trading deeply in red in morning deals on account of selling by funds and retail investors. Meanwhile, broader indices on the BSE were also trading lower. Weak cues from global markets dampened domestic sentiments. Traders were concerned as U.S. Treasury yields hit new highs on expectations that the Federal Reserve will keep raising rates for longer than anticipated. Further, weakness also prevailed in the markets after India Ratings projected a dip in FY24 growth to 5.9%, lower than Reserve Bank's 6.4%. All the sectoral indices on the BSE were trading in red led by Utilities, Power, Realty, Oil & Gas and Energy.

On the global front, Asian markets were trading mostly in red following negative cues from US markets overnight, as traders remain concerned about the outlook for U.S. interest rates amid a sharp increase by U.S. treasury yields. Back home, in the stock specific development, IRB Infrastructure rallied after turning ex-date for stock split in the ratio of 1:10. 

The BSE Sensex is currently trading at 60153.55, down by 519.17 points or 0.86% after trading in a range of 60123.29 and 60462.90. There was 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.92%, while Small cap index down by 0.77%.

The top losing sectoral indices on the BSE were Utilities down by 2.02%, Power down by 1.76%, Realty down by 1.56%, Oil & Gas down by 1.51% and Energy down by 1.45%, while there were no gaining sectoral indices on BSE.

The only gainer on the Sensex was Sun Pharma up by 0.47%. On the flip side, Bajaj Finance down by 2.53%, Bajaj Finserv down by 1.99%, Reliance Industries down by 1.66%, Indusind Bank down by 1.57% and Power Grid down by 1.57% were the top losers.

Meanwhile, State Bank of India (SBI) in its latest report has projected India's Gross domestic product (GDP) growth of 4.6 per cent for the December quarter, citing that as many as 30 high frequency indicators are not as robust as they were in the previous quarters. However, the projection is higher than the Reserve Bank of India's forecast of 4.4 per cent for the third quarter of this fiscal.

It mentioned the lower forecast also stems from poor corporate results, ex-BFSI, which have shown that operating profits grew at a much slower 9 per cent in the third quarter, which is just half of 18 per cent recorded in the year-ago period. Also, despite a 15 per cent in net sales, the bottom line was down by around 16 per cent.
It expects an upward revision in growth to 7 per cent for the full fiscal, up from 6.8 per cent projected earlier. This is because the government is anticipated to revise the GDP numbers for FY20, FY21 and FY22 on February 28. Additionally, there will be revisions in quarterly numbers of FY20, FY21, FY22 and even for the Q1 and Q2 of FY23.

As per the report, corporate margin seems to be under pressure as reflected in results of around 3,000 listed companies, excluding financial services companies, due to higher input costs with decreasing margins. Margins declined from 15.3 per cent in Q3FY22 to 11.9 per cent in Q3FY23, and this could pull down manufacturing growth in Q3.

The CNX Nifty is currently trading at 17669.65, down by 157.05 points or 0.88% after trading in a range of 17660.50 and 17772.50. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 1.06%, Sun Pharma up by 0.41%, Dr. Reddy's up by 0.27%, Tata Consumer Products up by 0.25% and Hindalco up by 0.24%. On the flip side, Adani Enterprises down by 7.29%, Adani Ports down by 3.67%, Bajaj Finance down by 2.50%, Grasim Industries down by 2.33% and Bajaj Finserv down by 2.03% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted lost 139.03 points or 0.89% to 15,423.97, Shanghai Composite weakened 8.39 points or 0.25% to 3,298.13, KOSPI dropped 38.55 points or 1.57% to 2,420.41, Jakarta Composite plunged 87.57 points or 1.29% to 6,785.84, Straits Times fell 5.85 points or 0.18% to 3,301.01 and Nikkei 225 slipped 348.68 points or 1.27% to 27,124.42. However, Hang Seng advanced 5.33 points or 0.03% to 20,534.82.