Markets remain in red tracking losses across global markets

Domestic equity indices remained in red and were trading with cut of over 0.40 percent each in late morning deals, tracking losses across global markets on renewed fears of more rate hikes, which prompted a selloff in bonds too. IT stocks were seeing broad-based losses, with HCL Technologies, Tech Mahindra, Wipro and TCS falling 1-2.5 percent. Sentiments remained weak as the Reserve Bank of India's monthly bulletin said headline inflation is expected to average well above 6 per cent in the second quarter. It noted headline inflation, after reaching a low of 4.3 per cent in May 2023, rose in June and is expected to surge during July-August led by vegetable prices. Besides, foreign fund outflows dented sentiments. Foreign institutional investors (FII) sold shares worth net Rs 1,510.86 crore on August 17. On the sectoral front, traders were seen pilling up position in Power, Utilities, Capital Goods, Industrials and Bankex, while selling was witnessed in IT, TECK, Realty, Telecom and Energy.

On the global front, Asian markets were trading in red following weak cues from the US markets overnight. Investors assessed Japan’s July inflation data and fresh blows to China’s real estate sector. Japan’s core inflation rate fell to 3.1%, down from 3.3% in June. Headline inflation remained at 3.3%. Meanwhile, embattled Chinese real estate giant Evergrande has filed for bankruptcy protection in a US bankruptcy court. Back home, in the stock specific development, Sula Vineyards jumped as wine tourism clocked highest-ever revenue, visitors, and tastings over the extended weekend of August 12-14.  

The BSE Sensex is currently trading at 64865.51, down by 285.51 points or 0.44% after trading in a range of 64786.59 and 65042.68. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in mixed; the BSE Mid cap index was down by 0.33%, while Small cap index up by 0.02%.

The top gaining sectoral indices on the BSE were Power up by 0.94%, Utilities up by 0.74%, Capital Goods up by 0.33%, Industrials up by 0.16% and Bankex up by 0.05%, while IT down by 1.60%, TECK down by 1.38%, Realty down by 0.70%, Telecom down by 0.68% and Energy down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 0.64%, Axis Bank up by 0.46%, Larsen & Toubro up by 0.43%, Hindustan Unilever up by 0.35% and Tata Motors up by 0.32%. On the flip side, Tech Mahindra down by 2.16%, Wipro down by 2.02%, TCS down by 1.98%, Infosys down by 1.57% and HCL down by 1.01% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its article has said that investment activity is gaining momentum and the envisaged capital expenditure is set to jump by over 80 per cent to Rs 1,71,568 crore in 2023-24 as against Rs 94,876 crore in 2022-23. It noted that improvement in capacity utilisation of the manufacturing sector, pick-up in credit demand and improving consumer sentiments are helping the capex cycle.

The article said in FY23, infrastructure -- including power, telecom, ports and airports, storage and water management, special economic zone, industrial, biotech, IT park, and roads and bridges -- remained the major sector accounting for 60 per cent of the total cost of projects. Apart from infrastructure, metal and metal products, construction, textile, and food products accounted for a sizeable share in the total cost of projects envisaged in FY23.

It said about 547 projects received assistance from banks and financial institutions during FY23 with a record project cost of Rs 2.66 lakh crore as compared to 401 projects having a total project cost of Rs 1.42 lakh crore in FY22. Of the total FY23 project cost, about 33 per cent (Rs 87,997 crore) was expected to be spent in FY23 itself while 34.7 per cent (Rs 92,539 crore) is likely to be spent in FY24 and another 24.8 per cent (Rs 66,071 crore) in the subsequent period. The article warned that higher cost of capital because of the rate hikes by central banks, including the RBI, geopolitical tensions-led global uncertainties and risk of a slowdown in major advanced economies, can hamper investment activities.

The CNX Nifty is currently trading at 19285.55, down by 79.70 points or 0.41% after trading in a range of 19253.60 and 19329.75. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Adani Ports up by 2.02%, Adani Enterprises up by 1.39%, Eicher Motors up by 1.38%, Maruti Suzuki up by 0.69% and Dr. Reddy's Lab up by 0.53%. On the flip side, Tech Mahindra down by 2.16%, Wipro down by 1.96%, TCS down by 1.83%, Hero MotoCorp down by 1.79% and Coal India down by 1.74% were the top losers.

All Asian markets were trading lower; Taiwan Weighted lost 112.55 points or 0.69% to 16,404.11, Hang Seng declined 265.8 points or 1.45% to 18,060.83, Shanghai Composite weakened 10.05 points or 0.32% to 3,153.69, KOSPI dropped 17.8 points or 0.71% to 2,502.05, Jakarta Composite plunged 32.2 points or 0.47% to 6,868.34, Straits Times fell 21.74 points or 0.68% to 3,175.01 and Nikkei 225 slipped 194.21 points or 0.61% to 31,431.79.