Indices open in red amid US debt deal concerns, ahead of India’s GDP data

Indian equity benchmarks made negative start and soon extended their losses on Wednesday tracking weakness in Asian counterparts amid US debt deal concerns. Markets are trading lower with cut of around half a percent each in early deals led by losses in Metal, Utilities and Bankex. Investors avoided to take any long positions ahead of India’s Gross Domestic Product (GDP) data. India is set to release data later in day that is expected to show the economy grew by 5% in the January-March quarter from a year earlier, accelerating from 4.4% in the previous quarter due to steady urban demand and government spending. Traders were worried as a private report which flagged concerns regarding the achievement of the fiscal deficit target of 5.9 per cent of gross domestic product (GDP) for the financial year 2023-2024. Though, broader indices are outperforming larger peers with decent gains amid foreign fund inflows in domestic markets. Foreign institutional investors (FIIs) bought shares worth Rs 2,085.62 crore on May 30, provisional data from the National Stock Exchange shows.

On the global front, all the Asian markets are trading in red as traders remain cautious and worried the US debt ceiling deal is likely to face opposition from some Republicans who were seeking bigger spending cuts, potentially prolonging the process of passing the bill. Fresh concerns about China's stuttering economic recovery also weighed on the sentiment. Back home, the Reserve Bank of India is likely to introduce various policy measures in 2023-24 like the guidelines for expected credit loss-based provisioning. In stock specific developments, Sun Pharma traded higher after Chinese health authority approves new drug application. Torrent Pharma zoomed on posting net profit of Rs 287 crore in Q4 versus a loss of Rs 118 crore a year ago.  

The BSE Sensex is currently trading at 62664.38, down by 304.75 points or 0.48% after trading in a range of 62661.96 and 62876.77. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.12%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.78%, IT up by 0.45%, Consumer Durables up by 0.35%, TECK up by 0.25% and Telecom up by 0.21%, while Metal down by 0.92%, Utilities down by 0.82%, Bankex down by 0.79%, Power down by 0.70% and Energy down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.89%, Tech Mahindra up by 1.12%, Asian Paints up by 0.96%, HCL Technologies up by 0.87% and Nestle up by 0.83%. On the flip side, SBI down by 1.85%, Reliance Industries down by 1.25%, HDFC down by 1.24%, NTPC down by 1.05% and Bajaj Finserv down by 0.93% were the top losers.

Meanwhile, the Securities and Exchange Board of India (SEBI) in its latest data showed that investment in the Indian capital markets through participatory notes has seen an upward trend in the past two months, with the number reaching Rs 95,911 crore in April-end, primarily driven by the country's robust economic growth. This was the highest level since November 2022, when investment through the route stood at Rs 96,292 crore. Participatory notes (P-notes) are issued by registered Foreign Portfolio Investors (FPIs) to overseas investors who wish to be part of the Indian stock market without registering themselves directly. They, however, need to go through a due diligence process.

According to the data, the value of P-note investments in Indian markets -- equity, debt, and hybrid securities -- stood at Rs 95,911 crore at the end of April as compared to Rs 88,600 crore in March-end. Also, this was the second consecutive monthly increase in the investment level. Investment through P-notes was at Rs 88,398 crore in February-end and Rs 91,469 crore in January-end. The growth in P-notes generally aligns with the trend in FPI flows, when there is a global risk to the environment, investment through this route increases and vice-versa.

Of the total Rs 95,911 crore invested through this route till April this year, Rs 86,226 crore was invested in equities, Rs 9,586 crore in debt and Rs 100 crore in hybrid securities. In addition, assets under custody of the FPIs grew to Rs 50.85 lakh crore in April from Rs 48.71 crore in the preceding month. Meanwhile, FPIs invested Rs 11,631 crore in the Indian equities in April and Rs 806 crore in the debt market.

The CNX Nifty is currently trading at 18553.55, down by 80.30 points or 0.43% after trading in a range of 18549.00 and 18603.90. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 2.28%, Sun Pharma up by 1.85%, Tech Mahindra up by 1.45%, Asian Paints up by 0.98% and Eicher Motors up by 0.94%. On the flip side, SBI down by 1.89%, ONGC down by 1.32%, HDFC down by 1.31%, Adani Enterprises down by 1.30% and Reliance Industries down by 1.28% were the top losers.

All Asian markets are trading lower; Nikkei 225 slipped 447.93 points or 1.45% to 30,880.23, Hang Seng dropped 414.37 points or 2.28% to 18,181.41, Taiwan Weighted plunged 78.43 points or 0.47% to 16,544.31, Jakarta Composite lost 53.66 points or 0.82% to 6,582.76, Shanghai Composite weakened 23.9 points or 0.75% to 3,200.31, Straits Times fell 18.7 points or 0.59% to 3,168.86 and KOSPI was down by 6.37 points or 0.25% to 2,579.15.