Domestic indices extend opening losses in early deals

Indian equity benchmarks made negative start on Friday after rate hikes from policymakers in England, Norway and Switzerland pushed global bond yields higher. Domestic indices soon extend losses and are trading in red with over half a percent cut in early deals. Utilities, Consumer Durables and Power stocks leading the losers on the BSE sectoral front. Broader indices are also trading under pressure with losses of over a percent. Foreign fund outflows dented domestic sentiments. According to the provisional data available on the NSE, foreign institutional investors (FII) offloaded shares worth a net Rs 693.28 crore on June 22. Traders were concerned as the minutes of the June MPC released by the central bank revealed that sounding a note of caution, RBI’s rate-setting panel member Jayanth R Varma opined that monetary policy is now dangerously close to levels at which it can inflict significant damage to the economy. 

On the global front, Asian markets are trading in red following the broadly negative cues from global markets overnight, as traders react to interest rate hikes by the Bank of England, the Norges Bank and the Swiss National Bank as well as inflation concerns that triggered growth worries. US Fed Chair Jerome Powell also reiterated plans to continue raising interest rates during his second day of testimony on Capitol Hill. China and Taiwan remain closed for the Dragon Boat Festival.

Back home, Information Technology (IT) related stocks are trading under pressure amid weaker than expected Q2 result from global tech giant Accenture. In stock specific development, Eros International Media plunged after capital market regulator SEBI barred its CEO Pradeep Kumar Dwivedi from the securities market until further notice for allegedly breaching trade practice regulations.

The BSE Sensex is currently trading at 62911.96, down by 326.93 points or 0.52% after trading in a range of 62874.12 and 63180.52. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.25%, while Small cap index was down by 1.44%.

The losing sectoral indices on the BSE were Utilities down by 1.39%, Consumer Durables down by 1.38%, Power down by 1.37%, Oil & Gas down by 1.33% and Metal down by 1.30%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Asian Paints up by 1.04%, NTPC up by 0.68%, Bharti Airtel up by 0.24% and ICICI Bank up by 0.23%. On the flip side, Tech Mahindra down by 1.67%, Tata Motors down by 1.66%, Bajaj Finserv down by 1.56%, Power Grid down by 1.42% and SBI down by 1.27% were the top losers.

Meanwhile, India and the US have said they are looking forward to the reconvening of the India-US Trade Policy Forum later this year to further enhance trade relationship and identify new areas for engagement. A joint statement issued after a meeting between Prime Minister Narendra Modi and US President Joe Biden showed that the two countries have also taken steps towards deepening bilateral cooperation to strengthen economic relationship, including trade ties. It said ‘The US-India trade and investment partnership is an engine for global growth, with bilateral trade exceeding $191 billion in 2022, nearly doubling from 2014’. 

Prime Minister Modi and President Biden also applauded the reconvening of the US-India Commercial Dialogue and CEO Forum in March in New Delhi. As per the joint statement, they have encouraged respective industries to take action on the recommendations from CEOs for greater engagement and technical cooperation to build resilient supply chains for emerging technologies, clean energy technologies, and pharmaceuticals; promote an innovative digital economy; lower barriers to trade and investment; harmonise standards and regulations wherever feasible; and work towards skilling of workforces.

The joint statement said ‘the leaders support continued for active engagement between the US Treasury Department and the Indian Ministry of Finance under the Economic and Financial Partnership dialogue’. It said they encouraged the US Federal Insurance Office and the Insurance Regulatory and Development Authority of India to advance in areas of mutual interest in the insurance sector under their existing MoU framework. Prime Minister Modi and President Biden have committed their administrations to promoting policies and adapting regulations that facilitate greater technology sharing, co-development, and co-production opportunities between the US and Indian industry, government, and academic institutions.

They also welcomed the launch of the interagency-led Strategic Trade Dialogue in June and directed both sides to undertake regular efforts to address export controls, explore ways of enhancing high technology commerce, and facilitate technology transfer between the India and the US. The statement said Modi and Biden welcomed Air India's historic agreement with Boeing to acquire more than 200 US-made aircraft. This purchase, it said, will support more than one million US jobs across 44 states and contribute to ongoing efforts to modernise the civil aviation sector in India. Boeing has announced a $100 million investment on infrastructure and programmes to train pilots in India, supporting India's need for 31,000 new pilots over the next 20 years.

The leaders also welcomed Boeing's announcement of its completion of a C-17 aftermarket support facility for MRO and a new parts logistics centre in India to capture future synergies between defence and civil aviation. It said ‘India highlighted its interest in the restoration of its status under the US Generalised System of Preferences programme, which could be considered in relation to eligibility criteria determined by the US Congress. The leaders supported intensifying the work to advance progress on issues related to the eligibility criteria’. Prime Minister Modi also expressed India's interest towards being recognised as a Trade Agreements Act-designated country by the US to further enhance the integration of both economies and to further promote trade and investment between the two countries.

The CNX Nifty is currently trading at 18655.45, down by 115.80 points or 0.62% after trading in a range of 18647.10 and 18756.40. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 0.94%, NTPC up by 0.81%, Bharti Airtel up by 0.44%, Dr. Reddy's Lab up by 0.42% and ICICI Bank up by 0.23%. On the flip side, Adani Enterprises down by 5.90%, Adani Ports & SEZ down by 3.46%, BPCL down by 2.56%, Hindalco down by 2.04% and HDFC Life Insurance down by 1.87% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 600.43 points or 1.84% to 32,664.45, Hang Seng declined 374.83 points or 1.99% to 18,843.52, KOSPI dropped 20.58 points or 0.8% to 2,573.12, Straits Times fell 19.91 points or 0.62% to 3,202.52 and Jakarta Composite was down by 7.58 points or 0.11% to 6,644.68.