Inflation woes, negative global cues pull markets lower

Domestic equity markets continued to trade in red in late morning deals amid continuous foreign fund outflows. Sentiments remained weak after a sharp rise in July domestic inflation. Negative cues from other Asian markets also weighed on the domestic sentiments. Cautiousness prevailed in the markets as investors fretted about the Chinese economy, higher U.S. interest rates and the health of the U.S. banking sector. However, lower side was capped as a report by SBI Research showed that the per capita income of Indians as gleaned from incometax filing is expected to increase from Rs 2 lakh in FY23 to Rs 14.9 lakh in FY47, coinciding with 100 years of the country’s Independence.

On the global front, Asian markets were trading in red following the broadly negative cues from global markets overnight. There were also rising worries after a broad array of Chinese economic data missed expectations and the country's central bank unexpectedly cut two key interest rates for the second time in three months to shore up the struggling economy. Back home, traders were seen pilling up position in  IT, Industrials, Realty, TECK and FMCG, while selling was witnessed in Metal, Consumer Durables, Telecom, Bankex and Auto. 

The BSE Sensex is currently trading at 65290.52, down by 111.40 points or 0.17% after trading in a range of 65032.89 and 65370.95. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.04%, while Small cap index up by 0.43%.

The top gaining sectoral indices on the BSE were IT up by 0.88%, Industrials up by 0.63%, Realty up by 0.58%, TECK up by 0.48% and FMCG up by 0.32%, while Metal down by 1.18%, Consumer Durables down by 0.83%, Telecom down by 0.64%, Bankex down by 0.55% and Auto down by 0.34% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.53%, HCL up by 1.16%, Tech Mahindra up by 1.16%, Wipro up by 0.98% and Larsen & Toubro up by 0.58%. On the flip side, Tata Steel down by 1.69%, Bharti Airtel down by 1.09%, JSW Steel down by 1.09%, Indusind Bank down by 1.03% and Bajaj Finserv down by 0.96% were the top losers.

Meanwhile, the commerce ministry in its latest data has said that India’s merchandise exports contracted by 15.88 per cent, the sixth month in a row, to $32.25 billion in July 2023 as compared to $38.34 billion in July 2022 due to a global slowdown and fall in shipments of key sectors like petroleum, gems and jewellery. Imports during the month also declined by 17 per cent, the eighth month in a row, to $52.92 billion from $63.77 billion in July 2022. This led to a narrowing of the trade deficit to $20.67 billion in July 2023 against $25.43 billion in July 2022.

As per the data, merchandise exports for the period April-July 2023 were $136.22 billion as against $159.32 billion during April-July 2022. Merchandise imports for the period April-July 2023 were $213.20 billion as against $247.31 billion during April-July 2022. The merchandise trade deficit for April-July 2023 was estimated at $76.98 billion as against $87.99 billion during April-July 2022.

Data further showed that non-petroleum and non-gems & jewellery exports in July 2023 were $25.35 billion, compared to $26.89 billion in July 2022. Non-petroleum and non-gems & jewellery exports during April-July 2023 was $102.71 billion, as compared to $110.72 billion in April-July 2022. Non-petroleum, non-gems & jewellery (gold, silver & precious metals) imports in July 2023 were $35.65 billion, compared to $38.55 billion in July 2022. Non-petroleum, non-gems & jewellery (gold, silver & precious metals) imports were $136.49 billion in April-July 2023 as compared to $148.77 billion in April-July 2022.

The CNX Nifty is currently trading at 19386.60, down by 47.95 points or 0.25% after trading in a range of 19317.20 and 19407.85. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 1.50%, Infosys up by 1.47%, HCL up by 1.11%, Tech Mahindra up by 1.10% and Wipro up by 0.92%. On the flip side, Hindalco down by 2.30%, Tata Steel down by 1.86%, HDFC Life Insurance down by 1.83%, Hero MotoCorp down by 1.51% and Adani Ports down by 1.45% were the top losers.

All Asian markets were trading lower; Taiwan Weighted lost 71.52 points or 0.44% to 16,383.28, Hang Seng declined 253.44 points or 1.38% to 18,327.67, Shanghai Composite weakened 15.32 points or 0.48% to 3,160.86, KOSPI dropped 46.68 points or 1.85% to 2,524.19, Jakarta Composite plunged 43.96 points or 0.64% to 6,871.14, Straits Times fell 28.5 points or 0.89% to 3,204.24 and Nikkei 225 slipped 425.42 points or 1.34% to 31,813.47.