Benchmarks trade marginally lower in morning deals

Indian equity benchmarks were trading marginally lower in morning deals, due to losses in FMCG, Auto and Oil & Gas stocks. Traders got anxious as provisional data from the National Stock Exchange (NSE) showing that foreign institutional investors (FIIs) sold shares worth Rs 495.17 crore on August 22. Some cautiousness also came as Economic Advisory Council to the Prime Minister (EAC-PM) Chairman Bibek Debroy said the government was losing revenue due to the GST, which should be revenue neutral with a single rate. Adding to the pessimism, a private report said that the banking system's liquidity slipped into deficit for the first time in the current financial year (2023-24) due to the imposition of the Incremental Cash Reserve Ratio (I-CRR) for banks and outflows from goods and services tax (GST) payments. Reserve Bank of India (RBI) data shows it injected Rs 23,644 crore on August 21. On the global front, Asian markets are trading mostly in green as investors are looking for more hints on the outlook for interest rates from policy makers when Federal Reserve officials and policy makers from the European Central Bank, the Bank of England and the Bank of Japan head to Jackson Hole, Wyoming, for their annual central bank conference later this week. 

The BSE Sensex is currently trading at 65147.29, down by 72.74 points or 0.11% after trading in a range of 65108.51 and 65436.10. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.56%, while Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.09%, Metal up by 1.06%, Industrials up by 0.99%, Consumer Durables up by 0.51% and Realty up by 0.50%, while FMCG down by 0.34%, Auto down by 0.21%, Oil & Gas down by 0.11%, Energy down by 0.05% and Power down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.23%, Larsen & Toubro up by 1.10%, Axis Bank up by 0.78%, Infosys up by 0.41% and Reliance Industries up by 0.34%. On the flip side, JIO Financial Services down by 5.00%, Sun Pharma down by 1.39%, ITC down by 0.86%, Bharti Airtel down by 0.85% and Bajaj Finance down by 0.84% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said softening input cost and rising demand will help the footwear industry to record an 11 per cent growth in revenue this fiscal (FY24). He stated footwear demand is seen clipping at 4 percent this fiscal. Moreover, it said domestic revenue is seen rising 10 per cent, driven largely by higher selling prices. This fiscal, the increase in average selling price will largely be due to a shift in the product mix towards higher-priced segments compared to price hikes initiated in the past to offset costlier raw materials.

It mentioned prices of key inputs such as ethylene vinyl acetate, rubber and resins have fallen 30 per cent in the past fiscal. Raw materials constitute around 45 per cent of the total cost of footwear makers. It added Softening input cost will boost operating margin by about 125 basis points to 9 per cent, which will still be below the pre-pandemic levels of 10 per cent.

The resultant healthy cash accrual and balance sheets will keep their credit profiles stable, as per the report that is based on an analysis of 43 footwear companies, which account for 15 per cent of the industry revenue of Rs 1 lakh crore. Exports, which constitute a fifth of the sectoral revenue, is seen slowing to 12 per cent this fiscal compared to a 25 per cent uptick last fiscal as high inflation cuts demand from Europe and the US, which account for three-fourth of the footwear exports. Last fiscal, exports grew as pent-up demand after the pandemic continued.

The CNX Nifty is currently trading at 19373.35, down by 23.10 points or 0.12% after trading in a range of 19366.60 and 19450.20. There were 21 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 2.34%, Divi's Lab up by 1.66%, Larsen & Toubro up by 1.22%, Tata Steel up by 1.19% and Apollo Hospital up by 1.18%. On the flip side, JIO Financial Services down by 4.99%, Sun Pharma down by 1.51%, ITC down by 1.01%, Bharti Airtel down by 0.92% and Adani Enterprises down by 0.88% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 61.42 points or 0.34% to 17,852.43, Taiwan Weighted added 114.27 points or 0.69% to 16,551.88, Straits Times rose 6.77 points or 0.21% to 3,166.65, Jakarta Composite gained 29.28 points or 0.42% to 6,945.73 and Nikkei 225 surged 40.48 points or 0.13% to 31,897.19.

On the flip side, Shanghai Composite weakened 17.23 points or 0.56% to 3,103.10 and KOSPI dropped 14.76 points or 0.59% to 2,500.98.