Weak trade persists over Dalal Street

Weak trade continued over the Dalal Street, with both Sensex and Nifty trading below their neutral lines, impacted by weak trade in other Asian markets along with heavy selling at IT and TECK counters. Traders got cautious amid a private report stating that like all emerging markets that rely upon the rest of the world for commodities and capital, India has spent the last two years battling the twin challenges posed by more expensive raw materials and a stronger dollar. On the sectoral front, aviation sector’s stocks were in focus, as rating agency ICRA has revised the outlook for the country's aviation sector to stable from negative, citing fast-paced recovery in the domestic air passenger traffic.

On the global front, Asian markets were trading mostly in red, as Japan's leading index declined further in January to the lowest level in more than two years. The preliminary data from the Cabinet Office showed that the leading index, which measures future economic activity, dropped to 96.5 in January from 96.9 in the previous month. Further, this was the lowest reading since November 2020, when it was 96.2. The coincident index that measures the current economic situation also weakened to an 8-month low of 96.1 in January from 99.1 in the previous month.

The BSE Sensex is currently trading at 60011.72, down by 212.74 points or 0.35% after trading in a range of 59844.82 and 60208.12. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.02%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were Utilities up by 1.25%, Power up by 1.19%, Capital Goods up by 0.71%, Industrials up by 0.63% and Oil & Gas up by 0.31%, while IT down by 1.00%, TECK down by 0.93%, Realty down by 0.91%, Metal down by 0.79% and Consumer Durables down by 0.78% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.62%, NTPC up by 0.79%, Larsen & Toubro up by 0.78%, Tata Steel up by 0.71% and ITC up by 0.36%. On the flip side, Bajaj Finance down by 2.17%, Sun Pharma down by 1.81%, Infosys down by 1.40%, Tech Mahindra down by 1.09% and Kotak Mahindra Bank down by 1.02% were the top losers.

Meanwhile, rating agency ICRA has revised the outlook for the country's aviation sector to stable from negative, citing fast-paced recovery in the domestic air passenger traffic. It also said that domestic passenger traffic growth is estimated at 8-13 per cent next fiscal (FY24), post the 55-60 per cent expansion in FY2023, to reach 145-150 million, which is much higher than the pre-Covid levels. It added that the industry's loss in the current financial year is projected to be Rs 11,000 crore to Rs 3,000 crore and reduce to Rs 5,000 to Rs 7,000 crore in the next fiscal.

According to the report, while noting that the trend of passenger traffic is expected to continue in FY24, the agency said the industry has also witnessed improved pricing power, as reflected in the healthier yields and thus the revenue per available seat kilometre-cost per available seat kilometre spread of the airlines. The same is expected to continue, given the sequential decline in aviation turbine fuel (ATF) prices from the peak of June 2022 and the anticipation of relatively stable foreign exchange rates.

The report further said international passenger traffic for Indian carriers is on a growth trajectory with the resumption of scheduled international operations since March 27, 2022, and was lower only by 2.4 per cent in the first nine months of this fiscal compared to pre-Covid levels. It also said the international passenger traffic for Indian carriers to witness a year-on-year growth of 10-15 per cent next fiscal after the 125-130 per cent expansion in FY23.

The CNX Nifty is currently trading at 17654.00, down by 57.45 points or 0.32% after trading in a range of 17602.25 and 17712.35. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 3.56%, Adani Enterprises up by 2.96%, Adani Ports and Special Economic Zone up by 1.95%, Bajaj Auto up by 1.49% and NTPC up by 0.79%. On the flip side, Bajaj Finance down by 2.21%, Hindalco down by 1.80%, Sun Pharma down by 1.79%, Infosys down by 1.44% and Apollo Hospital down by 1.34% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 462.22 points or 2.25% to 20,072.26, Taiwan Weighted lost 39.69 points or 0.25% to 15,818.20, KOSPI dropped 31.44 points or 1.29% to 2,431.91, Jakarta Composite plunged 27.53 points or 0.41% to 6,739.23, Straits Times fell 16.95 points or 0.52% to 3,228.32 and Shanghai Composite weakened 6.77 points or 0.21% to 3,278.33, while Nikkei 225 surged 135.03 points or 0.47% to 28,444.19.