Markets trim losses in late morning deals

Domestic equity markets trimmed some of their losses but continued to trade in red in late morning leads. Traders got some support 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’. However, weak cues from global markets continued to weigh on domestic sentiments. The spike in the dollar index to 103 and the US 10-year bond yield rising to 4.18 are negative for capital flows to emerging markets. The dollar strengthened against major rivals and bond yields surged on expectations that the U.S. Federal Reserve might keep interest rates higher for longer.

On the global front, Asian markets were trading in red as traders remained 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. Back home, on the sectoral front, traders were seen pilling up position in FMCG, Consumer Disc and Basic Materials, while selling was witnessed in Metal, Realty, Power, PSU and Auto. In the stock specific development, National Aluminium dipped after the company reported a weak set of earnings for the recently concluded June quarter. For the quarter ended June 2023, the company's Q1 consolidated net profit of Rs 333.76 crore, down 40.2 per cent when compared with Rs 557.91 crore reported in the June quarter a year ago. 

The BSE Sensex is currently trading at 65113.81, down by 208.84 points or 0.32% after trading in a range of 64821.88 and 65193.06. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.74%, while Small cap index down by 0.61%.

The only gaining sectoral indices on the BSE were FMCG up by 0.10%, Consumer Disc up by 0.08% and Basic Materials up by 0.05%, while Metal down by 1.97%, Realty down by 1.50%, Power down by 1.10%, PSU down by 1.01% and Auto down by 1.00% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 0.70%, Sun Pharma up by 0.64%, Nestle up by 0.50%, Kotak Mahindra Bank up by 0.49% and Reliance Industries up by 0.35%. On the flip side, JSW Steel down by 2.82%, SBI down by 2.39%, Tata Steel down by 2.00%, Bajaj Finserv down by 1.80% and Tata Motors down by 1.45% were the top losers.

Meanwhile, Secretary in the Department for promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh has said that the government is expected to disburse about Rs 13,000 crore to eligible firms seeking benefits under the production linked incentive (PLI) schemes, even though an exercise is going on to tweak the scheme for those sectors which have not yet picked up well. He said from the current year onwards, the disbursal number will be significantly larger. The government disbursed only Rs 2,900 crore till March 2023 out of Rs 3,400 crore claims received under the scheme so far.

Asked about when the full fund would be disbursed, Singh said ‘it is difficult to say as so many factors come into play. But we expect that during the tenure of the scheme, a good part (of that) will get exhausted’. He said savings from the scheme are already being considered for other PLI schemes or for restructured PLI schemes. When asked about the restructured PLI schemes, he said those are under various stages of inter-ministerial consultation.

Singh also said that ‘Rs 78,000 crore actual investments have already happened and we have already generated sales of over Rs 6 lakh crore, exports are boosted overall by Rs 2.6 lakh crore till 2022-23 adding about 4 lakh employment’. When asked about extending the PLI scheme for more sectors like toys, he said an inter-ministerial process is on for that. 

The CNX Nifty is currently trading at 19349.60, down by 78.70 points or 0.41% after trading in a range of 19257.90 and 19392.00. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.16%, LTIMindtree up by 0.84%, Hindustan Unilever up by 0.70%, Sun Pharma up by 0.67% and Dr. Reddy's Lab up by 0.60%. On the flip side, Adani Enterprises down by 2.93%, JSW Steel down by 2.91%, Eicher Motors down by 2.72%, Hindalco down by 2.48% and SBI down by 2.34% were the top losers.

All Asian markets were trading lower; Taiwan Weighted lost 207.59 points or 1.25% to 16,393.66, Hang Seng declined 450.83 points or 2.36% to 18,624.36, Shanghai Composite weakened 28.77 points or 0.9% to 3,160.48, KOSPI dropped 20.61 points or 0.8% to 2,570.65, Jakarta Composite plunged 18.9 points or 0.28% to 6,861.08, Straits Times fell 57.76 points or 1.75% to 3,236.52 and Nikkei 225 slipped 372.37 points or 1.15% to 32,101.28.