Markets extend losses in early deals after cautious start

Indian equity benchmarks made cautious start on Thursday amid mixed global cues as traders bet on rising rate concerns. Traders remain cautious and are reluctant to make significant moves ahead of the release of the closely watched US monthly jobs report on Friday. Besides, Japan's gross domestic product was flat on a seasonally adjusted quarterly basis in the fourth quarter of 2022. Soon, domestic indices extend their losses and are trading lower with cut of around 0.20% each in early deals. Some volatility to remain in the markets on account of weekly F&O expiry later in the day. Market participants were concerned as pencilling in just 4 per cent GDP growth for the fourth quarter, India Ratings said the final growth numbers for the full year will be lower than the second advance estimate of 7 per cent. Though, broader indices were outperforming larger peers with gains of in the range of 0.30-0.45%. In stock specific development, SeQuent Scientific soared after it terminated the share purchase agreement to acquire 100 percent shareholding in Tineta Pharma.

The BSE Sensex is currently trading at 60217.82, down by 130.27 points or 0.22% after trading in a range of 60172.69 and 60467.09. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.33%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Metal up by 1.26%, Utilities up by 1.19%, Power up by 1.13%, Healthcare up by 0.51%, Industrials up by 0.49%, while FMCG down by 0.39%, Auto down by 0.27%, Energy down by 0.26%, Oil & Gas down by 0.09%, Bankex down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.06%, Axis Bank up by 1.23%, Bharti Airtel up by 0.77%, NTPC up by 0.64% and Larsen & Toubro up by 0.54%. On the flip side, Reliance Industries down by 1.23%, ICICI Bank down by 0.89%, ITC down by 0.84%, Mahindra & Mahindra down by 0.81% and Indusind Bank down by 0.80% were the top losers.

Meanwhile, India Ratings in a report has projected just 4 per cent Gross Domestic Product (GDP) growth for India for the fourth quarter and said the final growth numbers for the full year (FY23) will be lower than the second advance estimate of 7 per cent. The agency sees many downside risks to this estimate, such as the pent-up demand, which had provided thrust to growth, is normalising; exports that had been buoyant are facing headwinds from the global slowdown and credit growth is facing tighter financial conditions. The ongoing spell of elevated temperatures in the north in February has raised concerns regarding wheat production.

In addition, the Met department has warned of the plausibility of severe heatwaves during March-May. This can not only affect agricultural output, which has been pegged to grow at 4.3 per cent in Q4, but also keep inflation at elevated levels that can impact rural demand, which has been under stress since the pandemic. Further confounding the growth expectations are the fall in merchandise exports, which contracted 6.6 per cent to $32.91 billion in January. This was the second successive month of contraction, mirroring an anemic manufacturing activity. Like exports, even merchandise imports fell 3.6 per cent in January to $50.66 billion, owing to a decline in commodity prices. This was the sharpest fall in 25 months.

On the positive side, the trade surplus in services almost doubled to $16.48 billion in January from $8.39 billion a year ago. As a result, the overall trade deficit improved to $1.26 billion in January from $8.95 billion in January 2022, which was $6.65 billion in December 2022. Another downside risk is the low liquidity in the banking system, after remaining in a huge surplus since the beginning of the pandemic. The liquidity in the banking system slowed to a four-month low of 0.43 per cent of the net demand and time liabilities in January from 0.53 per cent in December 2022 due to a robust credit demand in January.

The CNX Nifty is currently trading at 17721.35, down by 33.05 points or 0.19% after trading in a range of 17709.75 and 17772.35. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 2.81%, Tata Steel up by 2.11%, Hindalco up by 1.84%, JSW Steel up by 1.42% and Axis Bank up by 1.25%. On the flip side, Adani Enterprises down by 1.77%, Reliance Industries down by 1.19%, SBI Life Insurance down by 1.17%, ICICI Bank down by 0.92% and ITC down by 0.85% were the top losers.

Asian markets are trading mixed; Nikkei 225 surged 158.34 points or 0.56% to 28,602.53, Hang Seng advanced 45.89 points or 0.23% to 20,097.14 and Jakarta Composite gained 34.05 points or 0.5% to 6,810.42. On the other hand, Shanghai Composite weakened 10.03 points or 0.31% to 3,273.22, Straits Times fell 8.34 points or 0.26% to 3,218.52, KOSPI dropped 6.97 points or 0.29% to 2,424.94 and Taiwan Weighted was down by 3.35 points or 0.02% to 15,814.85.