Domestic indices magnify opening losses in early deals

Indian equity benchmarks made cautious start on Thursday tracking lackluster trade in Asian counterparts, following the mostly negative cues from Wall Street overnight, as traders remained cautious amid concerns about growth and the outlook for interest rates. Soon, domestic indices extended their losses and are trading lower with cut of around half a percent each in early deals as selling intensified in counters such as TECK, IT and Auto weighted down on markets. Sensex and Nifty slipped below their crucial levels of 59,100 and 17,400, respectively. Volatility to remain in the session due to weekly F&O expiry. Continued foreign fund outflows dented domestic sentiments. Foreign institutional investors (FII) sold shares worth Rs 424.88 crore on March 1, the National Stock Exchange's provisional data showed. Meanwhile, the Indian rupee fell by 8 paise to open at 82.57 against the US dollar in early trade.

On the sectoral front, coal industry stocks were in focus with report that India's coal production increased by 15.10 per cent to 784.41 million tonnes during April 2022-February 2023 as compared to 681.5 million tonnes produced during the same period of last year. In stock specific developments, Adani Enterprises and Adani Ports were trading higher ahead of the Supreme Court's hearing on investigating the Adani-Hindenburg case.

The BSE Sensex is currently trading at 59083.82, down by 327.26 points or 0.55% after trading in a range of 59071.00 and 59423.79. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.05%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Utilities up by 0.65%, Realty up by 0.54%, Metal up by 0.38%, Capital Goods up by 0.21%, Power up by 0.20%, while TECK down by 1.23%, IT down by 1.21%, Auto down by 0.53%, FMCG down by 0.36%, Bankex down by 0.32% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 0.86%, Larsen & Toubro up by 0.57%, Ultratech Cement up by 0.47%, Tata Steel up by 0.19% and ICICI Bank up by 0.10%. On the flip side, TCS down by 1.78%, Infosys down by 1.56%, Tech Mahindra down by 1.42%, Axis Bank down by 1.40% and Maruti Suzuki down by 1.02% were the top losers.

Meanwhile, a day after October-December quarter gross domestic product (GDP) growth estimates came in lower than market expectations, Chief Economic Advisor (CEA) V Anantha Nageswaran has said the performance of the manufacturing sector and growth rate in private consumption expenditure in the December quarter of 2022-23 is appearing ‘depressed’ because of higher base. According to Nageswaran, the GDP growth base was inflated due to data revision for the past three years.

The National Statistical Office (NSO) has revised GDP growth data for the past three years - 2019-20, 2020-21 and 2021-22 and also released the second advance estimates of GDP for 2022-23. While the growth rate for 2021-22 has been revised up by 40 basis points to 9.1 per cent, from 8.7 per cent, the GDP for 2020-21 (Covid impacted year) too has been revised upwards to (-) 5.8 per cent, from (-) 6.6 per cent. For 2019-20 also, the growth has been revised upwards to 3.9 per cent, from 3.7 per cent. However, the second advance estimates for 2022-23 real GDP growth was retained at 7 per cent - as was projected in first advance estimates in January.

The data showed that the manufacturing sector contracted by 1.1 per cent in the October-December quarter, and private consumption expenditure slowed to 2.1 per cent. According to him, but for the revision in data, which resulted in a higher base, the manufacturing sector would have shown an increase of 3.8 per cent year-on-year and private consumption expenditure would have grown 6 per cent in the October-December quarter. He said ‘so, really one is comparing apples to oranges. When one set of data is revised to take into account underlying data revisions, larger samples, etc., and the other is not, it is not a like-for-like comparison’.

With regard to manufacturing gross value added (GVA), he said it would have grown by 5.1 per cent in 2022-23 fiscal based on Second Advance Estimates without revised data. However, it will grow by 0.6 per cent in 2022-23 after revision. That is a revision of 4.5 percentage points. Similarly, manufacturing GVA would have grown by 3.8 per cent YoY in Q3 FY23 without revised data. However, he said it has contracted by 1.1 per cent YoY in Q3 FY23 after this revision. That is a change of 4.9 percentage points.

The CNX Nifty is currently trading at 17365.00, down by 85.90 points or 0.49% after trading in a range of 17356.90 and 17445.80. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 1.32%, Coal India up by 1.30%, Adani Ports & SEZ up by 1.26%, Bajaj Finserv up by 1.05% and Hero MotoCorp up by 0.96%. On the flip side, TCS down by 1.77%, Axis Bank down by 1.54%, Infosys down by 1.53%, Tech Mahindra down by 1.41% and ONGC down by 1.26% were the top losers.

Asian markets are trading mixed; Hang Seng declined 77.63 points or 0.38% to 20,542.08, Nikkei 225 slipped 22.46 points or 0.08% to 27,494.07, Straits Times fell 14.81 points or 0.45% to 3,240.27 and Taiwan Weighted lost 0.76 points to 15,597.73. On the other hand, KOSPI strengthened 23.67 points or 0.98% to 2,436.52, Jakarta Composite gained 21.37 points or 0.31% to 6,866.31 and Shanghai Composite was up by 5.91 points or 0.18% to 3,318.26.