Domestic indices open lower; RBI's rate action eyed

Indian equity benchmarks made negative start on Thursday tracking weakness in Asian counterparts following the mixed cues from global markets overnight, amid concerns about the economic outlook following the release of some disappointing economic data which reignited fears of a recession. Domestic indices are trading lower with marginal cut in early deals ahead of the Reserve Bank of India’s (RBI’s) monetary policy statement. The RBI’s monetary policy committee is expected to announce another rate hike of 25 basis points with a likely ‘neutral’ stance. Besides, Finance ministry officials are of the view that the RBI should prioritise bringing inflation down within the mandated range of 2-6 per cent, even if economic growth is adversely impacted in the process. Also, volatility to remain in the markets in the session ahead of weekly F&O expiry.

On the sectoral front, sugar industry stocks were in focus as industry body ISMA said India's sugar production fell 3 per cent to 299.6 lakh tonnes in the first six months of the 2022-23 marketing year ending September. Sugar output stood at 309.9 lakh tonnes in the corresponding period of the previous year. In stock specific development, Dalmia Bharat gained as board approves setting up new distillery for Rs 400 crore.

The BSE Sensex is currently trading at 59624.82, down by 64.49 points or 0.11% after trading in a range of 59524.15 and 59640.34. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.06%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Industrials up by 0.53%, Capital Goods up by 0.46%, Utilities up by 0.33%, Power up by 0.29%, Realty up by 0.19%, while Metal down by 0.81%, Consumer Durables down by 0.51%, Bankex down by 0.32%, IT down by 0.27%, TECK down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 0.66%, SBI up by 0.55%, Power Grid up by 0.55%, Larsen & Toubro up by 0.53% and Indusind Bank up by 0.51%. On the flip side, HCL Technologies down by 1.44%, Axis Bank down by 0.76%, Tech Mahindra down by 0.72%, ICICI Bank down by 0.68% and Maruti Suzuki down by 0.68% were the top losers.

Meanwhile, days after launch of the Foreign Trade Policy (FTP) for 2023, leading industry bodies have said that this policy will further boost business sentiments to reach the aspirational target of India becoming a leader in exports. Chairman of Confederationof Indian Industry (CII) national committee on exports and imports Sanjay Budhia said that reduction in export performance threshold in the new FTP will enable exporters to achieve reduction in transaction costs for outbound cargo. He said the policy has a strong emphasis on reduction in transaction costs, which will give a fillip to the MSMEs and also internationalisation of the Indian rupee.

He said reduction in user charges for MSMEs under the Advance Authorisation and Export Promotion Capital Goods Scheme will encourage the segment. The increased focus on partnering states and districts will also help in building competitiveness of small and medium units. Budhia added that the introduction of one-time amnesty scheme for default in export obligation (EO) is a welcome step at reducing litigations. India’s exports of goods and services have already reached $760 billion amid global headwinds at the end of 2022-23 fiscal.

Chairman of Engineering Export Promotion Council (EEPC) Arun Kumar Garodia said that the FTP for 2023 is pragmatic and positive which will promote exports of merchandise and services while helping the MSMEs to become a part of the global value chain and also make the Indian rupee go global. The policy also focuses on new areas like e-commerce and green energy, which have huge export potential. Garodia also said relief has been provided to exporters who are unable to fulfil EO against export promotion capital goods and advance authorisations.

The CNX Nifty is currently trading at 17533.20, down by 23.85 points or 0.14% after trading in a range of 17511.55 and 17544.70. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were BPCL up by 0.93%, Reliance Industries up by 0.68%, Adani Enterprises up by 0.59%, Eicher Motors up by 0.54% and Larsen & Toubro up by 0.50%. On the flip side, HCL Technologies down by 1.32%, UPL down by 0.97%, JSW Steel down by 0.79%, Axis Bank down by 0.76% and ICICI Bank down by 0.73% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 367.65 points or 1.34% to 27,445.61, Taiwan Weighted lost 55.17 points or 0.35% to 15,812.89, KOSPI dropped 23.45 points or 0.95% to 2,471.76, Straits Times fell 16.59 points or 0.5% to 3,302.28, Jakarta Composite plunged 14.77 points or 0.22% to 6,804.91 and Shanghai Composite was down by 1.48 points or 0.04% to 3,311.08, while Hang Seng advanced 24.33 points or 0.12% to 20,298.92.