Domestic markets trade under pressure ahead of inflation data

Indian equity benchmarks extend their previous session’s losses with gap-down opening on Monday tracking broadly negative cues from Asian counterparts, as traders remain cautious after data showing a bigger than expected increase in U.S. producer prices in July triggered some speculation the US Fed will likely decide to keep interest rates higher for longer duration. The strength of the US dollar against major Asian currencies is also weighing on the market. Domestic markets are trading under pressure with cut of over half a percent each in early deals as intense selling in Metal, Realty and Auto stocks pulled the indices lower. Investors preferred to remain on back foot ahead of the key inflation data (Retail inflation and Wholesale inflation) later in the day and a trading holiday on Tuesday on account of India’s Independence Day. 

Weak macro-economic data also impacted the market sentiments as growth in the index of industrial production (IIP) cooled to a three-month low of 3.7 per cent in June from 5.2 per cent in May, on the back of a high base effect and slowdown in manufacturing output. However, downside remained capped as net direct tax collections swelled 17.33 per cent to Rs 5.84 lakh crore so far this fiscal, reaching 32 per cent of the full-year budget estimates (BE). The Income Tax department said the collections from direct taxes, which include personal income tax and corporate tax, up to August 10, 2023, continue to register ‘steady growth’. In stock specific movements, ITC and Vodafone Idea traded lower ahead of their earnings results.

The BSE Sensex is currently trading at 64955.24, down by 367.41 points or 0.56% after trading in a range of 64821.88 and 65193.06. There were 4 stocks advancing against 25 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.21%, while Small cap index was down by 1.26%.

The top losing sectoral indices on the BSE were Metal down by 1.82%, Realty down by 1.51%, Auto down by 1.29%, PSU down by 1.25% and Power down by 1.24%, while there was no gainer on the BSE sectoral front.

The few gainers on the Sensex were Sun Pharma up by 0.64%, Infosys up by 0.44%, Nestle up by 0.08% and Hindustan Unilever up by 0.05%. On the flip side, Tata Motors down by 2.13%, JSW Steel down by 2.12%, SBI down by 1.99%, Bajaj Finserv down by 1.59% and Tata Steel down by 1.37% were the top losers.

Meanwhile, the Income Tax department has said net direct tax collections swelled 17.33 per cent to Rs 5.84 lakh crore so far this fiscal, reaching 32 per cent of the full-year budget estimates (BE). It said the collections from direct taxes, which include personal income tax and corporate tax, up to August 10, 2023, continue to register steady growth. 

It stated on a gross basis, direct tax collection grew 15.73 per cent to Rs 6.53 lakh crore till August 10 in the current fiscal. Rs 69,000 crore worth of refunds have been issued so far, 3.73 per cent higher than last year. 

The net collection is 32.03 per cent of the total budget estimates of direct taxes for the current fiscal of Rs 18.23 lakh crore. The 2023-24 budget has pegged direct tax collection at a little over Rs 18.23 lakh crore, a 9.75 per cent higher than Rs 16.61 lakh crore mopped up last fiscal.

The CNX Nifty is currently trading at 19304.95, down by 123.35 points or 0.63% after trading in a range of 19257.90 and 19392.00. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were ONGC up by 0.82%, Sun Pharma up by 0.68%, Dr. Reddy's Lab up by 0.56%, Infosys up by 0.47% and Hindustan Unilever up by 0.31%. On the flip side, Adani Enterprises down by 4.43%, Adani Ports & SEZ down by 3.30%, Apollo Hospital down by 2.75%, Hindalco down by 2.61% and JSW Steel down by 2.39% were the top losers.

All Asian markets are trading lower; Hang Seng declined 459.08 points or 2.41% to 18,616.11, Nikkei 225 slipped 391.10 points or 1.2% to 32,082.55, Taiwan Weighted lost 271.45 points or 1.64% to 16,329.80, Straits Times fell 62.26 points or 1.89% to 3,232.02, Shanghai Composite weakened 32.35 points or 1.02% to 3,156.90, KOSPI dropped 26.56 points or 1.02% to 2,564.70 and Jakarta Composite was down by 16.98 points or 0.25% to 6,863.00.