Markets continue to trade in red in late morning deals

Domestic equity indices continued to trade in red in late morning deals on account of selling by funds and retail investors. Meanwhile, broader indices on the BSE were also trading in red. Weakness in other Asian markets weighed on the domestic sentiments. Sentiments remained weak after rate hikes from policymakers in England, Norway and Switzerland pushed global bond yields higher. Further, depreciation in Indian rupee against dollar also weighed down sentiments. Rupee weakened by 8 paise to 82.05 against the dollar at the Inter-bank Foreign Exchange market on account of increased demand for the American currency from importers and banks. Most of the sectoral indices on BSE were trading in red, with only exception of Telecom counter. Stocks from Consumer Durables, Power, Utilities, Oil & Gas and Metal counters were the prominent losers. 

On the global front, Asian markets were trading in red as traders reacted 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. Back home, in the stock specific development, shares of Adani Group companies were under pressure, following private report said that the Group has drawn regulatory scrutiny in the US after short seller's report. According to report, US authorities are looking into what representations Adani Group made to its American investors following a scathing short seller’s report that accused the company of using offshore companies to secretly manipulate its share prices.

The BSE Sensex is currently trading at 63079.76, down by 159.13 points or 0.25% after trading in a range of 62874.12 and 63180.52. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.92%, while Small cap index down by 0.77%.

The only gaining sectoral index on the BSE was Telecom up by 0.04%, while Consumer Durables down by 1.58%, Power down by 1.19%, Utilities down by 1.15%, Oil & Gas down by 1.11% and Metal down by 1.05% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.82%, NTPC up by 1.41%, Indusind Bank up by 1.17%, Asian Paints up by 0.77% and HDFC Bank up by 0.63%. On the flip side, Tata Motors down by 1.51%, Power Grid down by 1.18%, Titan down by 1.12%, Larsen & Toubro down by 0.94% and Tata Steel down by 0.90% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has said that bringing back inflation within the target band is like a job half done. He said ‘our fight against inflation is not yet over so we need to undertake forward-looking assessment of the evolving inflation-growth outlook and stand ready to act, if situation so warrants.’ It was for the second time in a row that the Monetary Policy Committee (MPC) headed by the Governor kept the short-term lending rate (repo) unchanged after continuously raising it since May 2022. 

As per the minutes of the MPC meeting, Das said India’s macroeconomic fundamentals are strengthening and growth prospects are steadily improving and becoming broad-based. He said inflation has eased and the external sector outlook has improved. Balance sheets of banks and corporates look resilient and healthy, thereby engendering twin balance sheet advantage for growth. He said ‘beyond this and given the prevailing uncertainties, it is difficult to give any definitive forward guidance about our future course of action in a rate tightening cycle.’

Meanwhile, the government has mandated the RBI to ensure retail inflation remains at 4 per cent, with a 2 per cent margin on either side. The consumer price index-based retail inflation came down to 4.25 per cent in May.

The CNX Nifty is currently trading at 18693.05, down by 78.20 points or 0.42% after trading in a range of 18647.10 and 18756.40. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 1.85%, NTPC up by 1.38%, Indusind Bank up by 1.20%, Dr. Reddy's Lab up by 1.10% and Asian Paints up by 0.80%. On the flip side, Adani Enterprises down by 7.33%, Adani Ports & SEZ down by 4.33%, Hindalco down by 2.23%, BPCL down by 2.10% and HDFC Life Insurance down by 1.89% were the top losers.

Asian markets were trading in red; Hang Seng declined 402.94 points or 2.14% to 18,815.41, KOSPI dropped 21.84 points or 0.85% to 2,571.86, Jakarta Composite plunged 7.45 points or 0.11% to 6,644.81, Straits Times fell 32.54 points or 1.02% to 3,189.89 and Nikkei 225 slipped 486.4 points or 1.48% to 32,778.48.