Domestic indices erase gains in late morning deals

Key equity indices erased all gains and once again entered into red territory in late morning deals on account of selling in Infosys, Indusind Bank and Power Grid stocks. Traders were cautious as Fed signalled more rate hikes. The U.S. Federal Reserve held interest rates steady, as widely expected, but signaled that borrowing costs will likely rise by another half of a percentage point by the end of this year. Further, some cautiousness also prevailed in the markets as domestic rating agency Crisil said the growth in aggregate GST collection for states is likely to moderate to 12-14 per cent in FY24 from 20 per cent in FY23.  There was some buzz in Gems & Jewellery industry related stocks as the Gem Jewellery Export Promotion Council (GJEPC) in the monthly data has said the India's overall gems and jewellery exports witnessed a decline of 10.70 per cent in May at Rs 22,693.41 crore ($2,755.90 million).

On the global front, Asian markets were trading mostly higher after China’s central bank lowered its key medium-term lending rates, in a much anticipated move as the economy’s post-Covid recovery continues to lose momentum. The People’s Bank of China lowered the rate on 237 billion yuan ($33 billion) of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.65% from 2.75%. Back home, on the BSE sectoral front, traders were seen pilling up position in Healthcare, Realty, Auto, FMCG, Consumer Durables, while selling was witnessed in TECK, IT, Bankex, Metal and Power.

The BSE Sensex is currently trading at 63111.50, down by 117.01 points or 0.19% after trading in a range of 63068.36 and 63310.96. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.44%, while Small cap index up by 0.32%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.13%, Realty up by 0.63%, Auto up by 0.55%, FMCG up by 0.48% and Consumer Durables up by 0.43%, while TECK down by 0.57%, IT down by 0.54%, Bankex down by 0.42%, Metal down by 0.28% and Power down by 0.16% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.20%, Mahindra & Mahindra up by 0.82%, Nestle up by 0.80%, Asian Paints up by 0.58% and ITC up by 0.57%. On the flip side, Indusind Bank down by 2.04%, Wipro down by 1.32%, Infosys down by 1.20%, Power Grid down by 0.97% and TCS down by 0.92% were the top losers.

Meanwhile, International Energy Agency (IEA) chief Fatih Birol has said that India will soon overtake China as the largest driver of global oil demand even as it has an opportunity to become a world leader in green hydrogen production. He said this is primarily because China has seen faster adoption of electric vehicles, leading to a drop in petrol and diesel consumption. He noted that a swelling population, which has likely already surpassed that of China, is driving demand in the world’s third-largest energy-consuming nation. Its transition from fossil fuels to cleaner sources is expected to lag other regions, but cheap electricity produced from renewable energy sources like solar energy can help transform the nation into a green hydrogen leader.

IEA chief said one of the factors for the weakening of oil demand in China is rapid electrification of cars and buses. He hoped that demand in India will go down as electrification (vehicles run on batteries charged by electricity) picks up. EV sales in China nearly doubled to 6.1 million units in 2022 compared to 48,000 vehicles in India in the same period.

He further said in last 5 years, India was the largest contributor to the global solar capacity and it has provided 500 million people access to electricity and given cooking gas to nearly 100 million to eliminate household pollution caused by using wood and others for cooking. And the same can be done with hydrogen - the cleanest known form of energy. He said India can use the cheap electricity it produces from renewable sources to split water to produce green hydrogen. It can emerge as the lowest green hydrogen producer. He said ‘India in my view cannot afford to miss the historical opportunity to be leader, to be a superpower in green hydrogen’. 

The CNX Nifty is currently trading at 18738.85, down by 17.05 points or 0.09% after trading in a range of 18721.75 and 18794.10. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 2.47%, Dr. Reddy's Lab up by 2.23%, BPCL up by 1.73%, Apollo Hospital Ent. up by 1.60% and Adani Enterprises up by 1.50%. On the flip side, Indusind Bank down by 2.03%, HDFC Life Insurance down by 1.62%, Wipro down by 1.34%, Infosys down by 1.15% and Power Grid down by 1.01% were the top losers.

Asian markets were trading mostly higher; Taiwan Weighted added 67.58 points or 0.39% to 17,305.72, Hang Seng advanced 339.71 points or 1.75% to 19,748.13, Shanghai Composite strengthened 15.65 points or 0.48% to 3,244.64 and Straits Times rose 19.81 points or 0.62% to 3,237.95. However, KOSPI dropped 4.27 points or 0.16% to 2,614.81, Jakarta Composite plunged 19.92 points or 0.3% to 6,679.80 and Nikkei 225 slipped 15.01 points or 0.04% to 33,487.41.