Indices continue to trade in red on weak cues from global markets

Domestic equity indices continued to trade in red in late morning deals as fears about more of aggressive hikes in benchmark interest rates keep investors nervous globally.  Weak cues from other Asian markets weighted on the domestic sentiments. Investors were awaiting a key India GDP data due on Tuesday (February 28) for domestic cues. Depreciation in Indian rupee against dollar too weighed down sentiments. Rupee weakened by 16 paise to 82.92 against the dollar in early trade at the Inter-bank Foreign Exchange market on worries over the likelihood of more Federal Reserve rate hikes. On the BSE sectoral front, traders were seen pilling up position in Bankex, Realty, PSU and Basic Materials, while selling was witnessed in TECK, IT, Auto, Metal and Telecom.

On the global front, Asian markets were trading in red following the broadly negative cues from US markets on Friday, as the unexpected spike in US core consumer prices added to recent concerns about the outlook for interest rates as the US Federal Reserve may be inclined to leave interest rates higher for longer. Back home, in stock specific development, One97 Communications rallied on a private report stating that telecom tycoon Sunil Mittal is eyeing stake in the company.

The BSE Sensex is currently trading at 59170.16, down by 293.77 points or 0.49% after trading in a range of 58937.64 and 59441.13. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.14%, while Small cap index down by 1.20%.

The top gaining sectoral indices on the BSE were Bankex up by 0.62%, Realty up by 0.35%, PSU up by 0.12% and Basic Materials up by 0.08%, while TECK down by 2.12%, IT down by 2.08%, Auto down by 1.85%, Metal down by 1.71% and Telecom down by 1.62% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.70%, NTPC up by 0.88%, ICICI Bank up by 0.81%, SBI up by 0.74% and HDFC up by 0.64%. On the flip side, Infosys down by 2.75%, Tata Steel down by 2.69%, Mahindra & Mahindra down by 2.04%, Tata Motors down by 1.96% and TCS down by 1.62% were the top losers.

Meanwhile, RBI Monetary Policy Committee (MPC) member Jayanth R Varma has said that India's Gross domestic product (GDP) growth appears to be 'very fragile' and it may fall short of what the country needs to meet the aspirations of its growing workforce.

Explaining further, Varma said rising EMI payments increases the pressure on household budgets and dampens spending, and exports are struggling in the face of global factors. While noting that high interest rates make private capital investment more difficult, he said the government is in fiscal consolidation mode, thus reducing the support to the economy from this source. He said ‘Because of all these factors, I fear that growth may fall short of what we need to meet the aspirations of our growing workforce given our demographic context and income level’.

Talking on high inflation, RBI MPC member said 2022-23 is a year of high inflation due to various supply shocks as well as the delay in monetary tightening during the second half of 2022-23. However, he expects inflation to come down significantly in 2023-24. He also anticipates a gradual glide path that brings inflation down close to the target.

The CNX Nifty is currently trading at 17351.90, down by 113.90 points or 0.65% after trading in a range of 17300.90 and 17451.60. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 1.62%, NTPC up by 0.85%, ICICI Bank up by 0.71%, SBI up by 0.63% and HDFC up by 0.59%. On the flip side, Adani Enterprises down by 6.10%, Bajaj Auto down by 4.83%, UPL down by 3.07%, Infosys down by 2.72% and Tata Steel down by 2.64% were the top losers.

All Asian markets were trading lower; Hang Seng declined 112.18 points or 0.56% to 19,897.86, Shanghai Composite weakened 10.29 points or 0.31% to 3,256.87, KOSPI dropped 23.29 points or 0.96% to 2,400.32, Jakarta Composite plunged 21.59 points or 0.32% to 6,834.99, Straits Times fell 13.95 points or 0.43% to 3,268.35 and Nikkei 225 slipped 4.91 points or 0.02% to 27,448.57.