Benchmarks end lower on Friday

Indian equity benchmarks traded under pressure throughout the day and lost over half a percent on Friday as Capital Goods, Realty and Power shares took a hit amid concerns over potential rate hikes and weak trend in global markets. Markets made a gap-down opening and remained in range bound till the end, as domestic sentiments remained pessimistic with the Reserve Bank of India (RBI) in its ‘minutes of the recent monetary policy committee (MPC) meeting’ stating that the headline inflation is likely to witness a spike in the near months on account of supply disruptions due to adverse weather conditions. It said there are risks from the impact of the skewed south-west monsoon so far, a possible El Nino event and upward pressures on global food prices due to geopolitical hostilities. Adding more concerns among traders, a new report by the Asian Development Bank (ADB) showed that the increased cost-of-living crisis sparked by surging inflation last year, combined with the lingering effects of the COVID-19 pandemic, is continuing to push people in Asia and the Pacific into extreme poverty.

Traders overlooked Finance Secretary T V Somanathan’s statement that India will continue to clock the highest growth rate among the top five economies in the world in the foreseeable future and asked Indian diaspora to act as a catalyst and supplement government efforts in making India the biggest opportunity. Traders also paid no heed towards Commerce and Industry Minister Piyush Goyal’s statement that the ongoing negotiations between India and the UK on a free trade agreement (FTA) are progressing extremely well and it is expected to conclude at an early date. 

On the global front, Asian markets settled mostly lower on Friday with profit booking in tech stocks and hawkish signals from some Federal Reserve officials weighing on regional markets. Investors also awaited more clarity on monetary policy from the Jackson Hole Symposium, where Fed Chair Jerome Powell is set to speak later in the day. European markets were trading higher after the release of some encouraging regional data. Destatis reported that the German economy stabilized in spring after slight declines in the previous two quarters. Gross domestic product posted nil growth in the second quarter after a 0.1 percent fall in the first quarter and a 0.4 percent decline in the fourth quarter of 2022.

Finally, the BSE Sensex fell 365.83 points or 0.56% to 64,886.51 and the CNX Nifty was down by 120.90 points or 0.62% to 19,265.80.        

The BSE Sensex touched high and low of 65,106.00 and 64,732.57, respectively. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.85%, while Small cap index was down by 0.24%.

The lone gaining sectoral index on the BSE was Telecom up by 1.36%, while Capital Goods down by 1.29%, Realty down by 1.27%, Power down by 1.26%, Utilities down by 1.24% and Metal down by 1.12% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.04%, Asian Paints up by 1.04%, Bharti Airtel up by 0.41% and Titan Company up by 0.22% and ICICI Bank up by 0.15%. On the flip side, Indusind Bank down by 1.89%, JSW Steel down by 1.88%, Larsen & Toubro down by 1.79%, Ultratech Cement down by 1.72% and JIO Financial Services down by 1.69% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has said that India's trade deficit is falling at a rapid pace and the exports are expected to see positive growth in the coming months. He said that countries in the world are facing a slowdown and global trade is relatively weak right now. 

Given the challenging situation, the minister said high interest rates, and cut down in discretionary spending have led to a fall in the exports of ready-made apparel and the gem and jewellery sector, and added that lower petroleum prices have resulted in lower export numbers. 

Talking about his bilateral meetings, Goyal said that more and more countries are looking at expanding trade and business with India and there is a lot of interest to invest in India. As Chandrayaan-3 successfully soft-landed on the Moon to propel India into an elite group of nations, he said that at least three countries approached him for a partnership with India in the space sector. He also said ‘so, space is going to become a new frontier in which India will provide a leadership role at affordable competitive prices, modern technology and with full self-reliance, where we have the capabilities of our people to reach the moon and aspire for beyond’. 

The CNX Nifty traded in a range of 19,339.55 and 19,229.70. There were 11 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were JIO Financial Services up by 3.82%, Bajaj Finserv up by 2.41%, Asian Paints up by 0.94%, Bajaj Finance up by 0.67% and ONGC up by 0.66%. On the flip side, Larsen & Toubro down by 2.09%, Dr. Reddy's Lab down by 2.07%, JSW Steel down by 2.02%, Adani Ports &SEZ down by 1.99% and Adani Enterprises down by 1.95% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 34.47 points or 0.47% to 7,368.10, France’s CAC rose 47.94 points or 0.66% to 7,262.40 and Germany’s DAX gained 73.83 points or 0.47% to 15,695.32.

Asian markets settled mostly lower on Friday in caution ahead of US Fed Chair Jerome Powell's speech at Jackson Hole later in the day. Powell is expected to outline whether interest rates should continue to rise to combat high inflation. Seoul shares declined tracking Wall Street shares’ fall overnight. Japanese stocks dropped on concerns about worsening trade ties with China after Japan began releasing contaminated water from the Fukushima plant into the Pacific Ocean.