Bears hold grip over Dalal Street

Bears were holding their grip over the Dalal Street, with both Sensex and Nifty trading lower, amid negative cues from other Asian markets along with heavy selling at Metal and TECK counters. Traders remained cautious amid a private report predicting that the risks to earnings growth, which include the impact of the global economic slowdown, specifically on the IT sector, as well as potential delays in rural revival and the possibility of a peak in urban demand, are apparent in the market movements.

On the global front, Asian markets were trading mostly in red, after the Hong Kong Monetary Authority raised its benchmark rate by 25 basis points, following the policy announcement of the U.S. Federal Reserve a day earlier. The HKMA adjusted the Base Rate upward to 5.5 percent with immediate effect. The Federal Reserve had lifted the target range for the federal funds rate by 25 basis points to 5 to 5.25 percent, making the tenth straight rate hike.

Back home, on the sectoral front, chemicals companies stocks were in watch, after credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained a neutral outlook on the Indian chemicals sector for FY24, amid robust domestic demand, comfortable profitability and strong balance sheets. Besides, the rating agency maintained a Stable Rating Outlook on its rated chemical portfolio for FY24.

The BSE Sensex is currently trading at 61312.12, down by 437.13 points or 0.71% after trading in a range of 61128.93 and 61585.50. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.24%, while Small cap index was down by 0.25%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.45%, Capital Goods up by 0.64%, Auto up by 0.51%, FMCG up by 0.47% and Industrials up by 0.43%, while Metal down by 1.29%, TECK down by 0.74%, Bankex down by 0.69%, IT down by 0.68% and Telecom down by 0.45% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 2.38%, ICICI Bank up by 1.49%, ITC up by 1.46%, Larsen & Toubro up by 1.44% and Maruti Suzuki up by 1.37%. On the flip side, HDFC Bank down by 5.34%, HDFC down by 5.15%, Tata Steel down by 1.98%, Infosys down by 1.30% and NTPC down by 1.16% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Deputy Governor T Rabi Sankar has said a handful of currencies currently dominate global finance, and there is a need for de-risking by diversifying the international currency system by adopting liquid currencies. 

Sankar also appealed that central bank digital currencies (CBDCs) should be adopted more by other countries as well, terming the fiat digital currency as essential for mainta. It can be noted that India began its efforts to internationalise the rupee last year, under which the effort is to decrease the reliance on the USD-dominated trade, by making rupee payments possible. So far, 18 countries have opened rupee accounts.

He mentioned ‘We have a global financial system that is dominated in terms of transactions, in terms of invoicing, in terms of their usage for hedging and other purposes by a few handfuls of reserve currencies. It would probably, therefore, be in the interest of international currency system to have a little more diversified liquid currencies, which could...have the additional benefit of de-risking the global financial systems, instead of a dependence only a few, depend on more.’

Besides, He said the right infrastructure and liquidity are eminently feasible irrespective of the currency involved. He added that forex pricing can be far more efficient than what exists today if such an initiative is undertaken.

The CNX Nifty is currently trading at 18145.20, down by 110.60 points or 0.61% after trading in a range of 18085.35 and 18216.95. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 2.42%, Adani Enterprises up by 1.66%, ICICI Bank up by 1.55%, Adani Ports and Special Economic Zone up by 1.55% and ITC up by 1.52%. On the flip side, HDFC Bank down by 5.37%, HDFC down by 5.08%, Tata Steel down by 2.03%, UPL down by 1.71% and Hindalco down by 1.44% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite plunged 93.49 points or 1.38% to 6,750.54, Shanghai Composite weakened 17.87 points or 0.54% to 3,332.59 and Straits Times fell 7.91 points or 0.24% to 3,261.27, while Taiwan Weighted added 17.04 points or 0.11% to 15,626.07 and Hang Seng advanced 61.64 points or 0.31% to 20,010.37.