Sensex, Nifty remain under pressure despite easing wholesale inflation

Indian equity benchmarks remained under pressure in early noon deals, despite easing India’s wholesale inflation. India’s inflation based on wholesale price index (WPI) declined further to 1.34% (Provisional) for the month of March 2023 as against 3.85% recorded in February 2023, due to fall in prices of non-food articles, mineral oils and electricity. The wholesale inflation was 4.73% in January 2023.

Weak trade persisted over the Dalal Street, on the back of heavy selling at IT and TECK counters. There was some anxiety among traders, as Moody's Investors Service said higher interest rates have increased repayment amounts and limited refinancing options for SME borrowers who have availed loans against property, heightening default risk for these loans.

On the global front, Asian markets were trading mostly in green, after China's central bank maintained the rate on the one-year medium-term lending facility. The People's Bank of China added CNY 170 billion via one-year MLF at an interest rate of 2.75 percent. The central bank also conducted seven-day reverse repo operations worth CNY 20 billion at a rate of 2.00 percent.

The BSE Sensex is currently trading at 59840.60, down by 590.40 points or 0.98% after trading in a range of 59442.47 and 60407.86. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.18%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were FMCG up by 1.09%, PSU up by 0.83%, Energy up by 0.75%, Oil & Gas up by 0.74% and Power up by 0.67%, while IT down by 5.24%, TECK down by 4.96%, Capital Goods down by 0.81%, Telecom down by 0.77% and Industrials down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 3.66%, Power Grid Corporation of India up by 2.53%, SBI up by 1.47%, Ultratech Cement up by 1.46% and Kotak Mahindra Bank up by 1.27%. On the flip side, Infosys down by 10.57%, Tech Mahindra down by 5.16%, HCL Technologies down by 2.75%, Wipro down by 2.29% and Larsen & Toubro down by 2.14% were the top losers.

Meanwhile, Securities and Exchange Board of India (SEBI) in its latest data has showed that investment in the Indian capital markets through Participatory notes (P-notes) dropped to Rs 88,398 crore month-on-month in February 2023 amid higher valuation of domestic markets. This was the third consecutive monthly decline in the investment level. Before this, investment through the route had been on an increasing trend since July 2022 because of a slump in the oil and other commodities prices and the relative outperformance of Indian equity markets.

According to data, the value of P-note investments in Indian markets -- equity, debt, and hybrid securities -- stood at Rs 88,398 crore at the end of February 2023 compared to Rs 91,469 crore in January-end. Prior to that, the investment level through the route was Rs 96,292 crore at the end of December 2022 and Rs 99,335 crore at the end of November 2022. It was Rs 97,784 crore at October-end last year. Investment via P-notes normally moves in line with FPI investment. When there is a global risk to the environment, investment through this route increases and vice-versa.

P-notes are issued by registered Foreign Portfolio Investors (FPIs) to overseas investors who wish to be a part of the Indian stock market without registering themselves directly. They, however, need to go through a due diligence process.

The CNX Nifty is currently trading at 17682.60, down by 145.40 points or 0.82% after trading in a range of 17574.05 and 17863.00. There were 28 stocks advancing against 21 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Nestle up by 3.84%, Power Grid Corporation of India up by 2.47%, Britannia Industries up by 1.95%, SBI up by 1.72% and Ultratech Cement up by 1.51%. On the flip side, Infosys down by 10.74%, Tech Mahindra down by 5.28 HCL Technologies down by 2.98%, Wipro down by 2.46% and Larsen & Toubro down by 2.19% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 330.58 points or 1.62% to 20,769.39, Shanghai Composite strengthened 43.4 points or 1.3% to 3,381.55, Taiwan Weighted added 34.12 points or 0.21% to 15,963.55, Nikkei 225 surged 21.31 points or 0.07% to 28,514.78 and KOSPI increased 4.42 points or 0.17% to 2,575.91, while Straits Times fell 0.2 points or 0.01% to 3,302.46 and Jakarta Composite plunged 48.83 points or 0.72% to 6,769.74.