Selling pressure persists in Indian markets

A selling pressure persisted in Indian equity markets in early afternoon deals, with both Sensex and Nifty lingering in deep red, impacted by negative cues from other Asian markets after the Federal Reserve said it expects interest rates to remain higher for longer. Domestic sentiments were downbeat, as the Reserve Bank of India (RBI) recently released data on household financial savings which created a stir in the markets. The data showed that household financial savings were at 5.1 percent of GDP, almost a 40-year low. Adding more worries, another private report stated that with crude oil hovering near $94 a barrel, India, the world’s third biggest importer, is confronted with the return of a long-feared spectre: the twin deficit challenge. Besides, the All-India Consumer Price Index Number for Agricultural Labourers and Rural Labourers (Base: 1986-87=100) for the month of August, 2023 increased by 9 points and 8 points respectively to stand at 1224 and 1234 points respectively.

On the global front, Asian markets were trading lower, after Taiwan's export orders continued to decline sharply for the thirteenth consecutive month in August, and at a faster-than-expected pace. According to data released by the Ministry of Economic Affairs, export orders registered a double-digit annual fall of 15.67 percent in August, which was worse than the 12.04 percent decrease in July. The expected drop was 10.5 percent.

The BSE Sensex is currently trading at 66176.60, down by 624.24 points or 0.93% after trading in a range of 66148.64 and 66608.67. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.40%, while Small cap index was down by 0.31%.

The top losing sectoral indices on the BSE were Auto down by 1.32%, Bankex down by 1.18%, FMCG down by 0.97%, Utilities down by 0.88% and PSU down by 0.80%, while there were no winning sectoral indices on the BSE

The only gainers on the Sensex were Tech Mahindra up by 1.54% and Tata Steel up by 0.19%. On the flip side, Mahindra & Mahindra down by 2.92%, ICICI Bank down by 2.17%, Indusind Bank down by 1.83%, Bajaj Finserv down by 1.79% and HCL Technologies down by 1.76% were the top losers.

Meanwhile, the Asian Development Bank (ADB) in its Asian Development Outlook September 2023 has said that it has marginally lowered India's growth forecast to 6.3 per cent for the current financial year from its earlier projection of 6.4 per cent owing to slowing exports and the likely impact of erratic rainfall on agriculture output.

Further, it said Indian growth in the rest of this fiscal year and next will be propelled by robust domestic consumption as consumer confidence improves, and by investment, including large increases in government capital expenditure. India’s economy grew by 7.8 per cent year on year in the first quarter of fiscal year 2024 (ending March 31, 2024), reflecting strong growth in services and rising investment fueled by public investment and bank credit to the private sector.

Besides, ADB said the downside risks arise from global geopolitical tensions, which may further create economic uncertainty and/or lead to a rapid rise in global food prices. It also said further weather-related shocks either at the time of harvesting of kharif season (July-October) or during the October-April rabi season may further affect agriculture growth.

The CNX Nifty is currently trading at 19729.05, down by 172.35 points or 0.87% after trading in a range of 19722.55 and 19848.75. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Adani Ports and Special Economic Zone up by 2.40%, Tech Mahindra up by 1.54%, Adani Enterprises up by 0.67%, BPCL up by 0.55% and Hindalco up by 0.38%. On the flip side, Mahindra & Mahindra down by 2.97%, Grasim Industries down by 2.29%, ICICI Bank down by 2.26%, Hero MotoCorp down by 2.09% and SBI down by 2.05% were the top losers.

All Asian markets were trading lower; Nikkei 225 slipped 452.75 points or 1.39% to 32,571.03, Taiwan Weighted lost 218.08 points or 1.34% to 16,316.67, Hang Seng declined 224.31 points or 1.25% to 17,661.29, Shanghai Composite weakened 21.55 points or 0.69% to 3,087.02, Straits Times fell 38.34 points or 1.18% to 3,203.66, KOSPI dropped 44.77 points or 1.78% to 2,514.97 and Jakarta Composite plunged 24.83 points or 0.35% to 6,986.85.