Benchmarks continue to trade lower in morning deals

Indian equity benchmarks continued to trade lower in morning deals, amid weak global cues. Traders remained cautious as Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh stating that hardening interest rates globally and worsening geo-political situation have impacted the foreign direct investment (FDI) inflows into India in 2022-23. Investors also preferred to stay on the sidelines ahead of key Q4 GDP growth data to be out later in the day. Traders overlooked data showing 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. Meanwhile, the Reserve Bank of India is likely to introduce various policy measures in 2023-24 like the guidelines for expected credit loss-based provisioning. 

On the global front, Asian markets are trading lower as caution set in ahead of the U.S. Congress's approval of the debt deal and fresh concerns about China's stuttering economic recovery weighed on the sentiment. China's factory activity contracted faster than expected in May on weakening demand, heaping pressure on policymakers to shore up a patchy economic recovery and knocking Asian financial markets lower. The official manufacturing purchasing managers' index (PMI) fell to 48.8 from 49.2 in April, its lowest in five months and below the 50-point mark that separates expansion from contraction. 

The BSE Sensex is currently trading at 62610.01, down by 359.12 points or 0.57% after trading in a range of 62595.09 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 0.17%, while Small cap index was up by 0.24%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.59%, IT up by 0.55%, Healthcare up by 0.48%, TECK up by 0.28% and Industrials up by 0.13%, while Utilities down by 1.18%, Metal down by 1.07%, Power down by 1.07%, Energy down by 0.89% and Bankex down by 0.82% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.55%, Asian Paints up by 1.38%, Tata Motors up by 1.36%, HCL Technologies up by 1.18% and Sun Pharma up by 1.12%. On the flip side, SBI down by 1.84%, HDFC down by 1.62%, NTPC down by 1.53%, Reliance Industries down by 1.43% and HDFC Bank down by 1.29% were the top losers.

Meanwhile, Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh has said hardening interest rates globally and worsening geo-political situation have impacted the foreign direct investment (FDI) inflows into India in 2022-23. Singh said the department would analyse the reasons for the contraction in FDI in five important sectors like computer hardware and software; construction, education, automobiles and metallurgical industries.

These five sectors had a share of $30 billion in India's total FDI in 2021-22 and in the last fiscal year, overseas inflows have almost halved. He added ‘Why exactly in those sectors (FDI) has come down is to be analysed. We will have to analyse.’  FDI equity inflows into India declined by 22 per cent to $46 billion in 2022-23. The investments during the January-March 2023 quarter plunged by 40.55 per cent to $9.28 billion.

He mentioned ‘I cannot think of any other reason. It is not as if our FDI policies have become protectionist. On the contrary, we have kept it very very liberal ... The decline is combination of hardening of interest rates along with geo-political risks going up around the world. In general the appetite may be less.’ Besides, he said that the government is doing investment promotion on a large scale and the inflows would start recovering.

The CNX Nifty is currently trading at 18534.25, down by 99.60 points or 0.53% after trading in a range of 18531.95 and 18603.90. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 2.28%, HDFC Life Insurance up by 2.14%, Tech Mahindra up by 1.62%, Tata Motors up by 1.43% and Asian Paints up by 1.29%. On the flip side, SBI down by 1.95%, ONGC down by 1.79%, HDFC down by 1.65%, NTPC down by 1.58% and Adani Enterprises down by 1.50% were the top losers. 

All Asian markets are trading lower; Taiwan Weighted lost 69.57 points or 0.42% to 16,553.17, Hang Seng declined 417.64 points or 2.3% to 18,178.14, Shanghai Composite weakened 23.9 points or 0.75% to 3,200.31, KOSPI dropped 4.19 points or 0.16% to 2,581.33, Jakarta Composite plunged 49.38 points or 0.75% to 6,587.04, Straits Times fell 17.71 points or 0.56% to 3,169.85 and Nikkei 225 slipped 501.27 points or 1.6% to 30,826.89.