Domestic indices trade lower in early deals; Tata Motors leads losers

Indian equity benchmarks made cautious start on Monday tracking mixed global cues as investors looking ahead to the Federal Reserve's rate decision due this week for directional cues. Soon, markets extended their losses and are trading lower with around half a percent cut in early deals amid situation in the Middle East after Israel expanded military operations in Gaza over the weekend, raising concerns about global economic instability. Foreign fund outflows also dent domestic sentiments. Foreign Portfolio Investors (FPIs) have pulled out over Rs 20,300 crore from Indian equities this month so far, primarily due to a sharp surge in the US treasury yield. Traders are concerned after the Reserve Bank of India (RBI) data showed that India’s forex reserves declined by $2.36 billion to $583.53 billion during the week ended October 20. 

On the global front, Asian markets are trading mixed as investors kept a wary eye on the situation in the Middle East and braced for key economic data and central bank meetings due this week. Israel expanded military operations in Gaza over the weekend, raising concerns about global economic instability. Back home, insurance industry stocks are in focus after the Irdai constituted a committee of 12 members to simplify insurance policy wording. In stock specific development, Reliance Industries traded with traction after reported a strong set of earnings over the weekend. However, Tata Motors was top loser on reports of its new cars catching on fire.

The BSE Sensex is currently trading at 63492.24, down by 290.56 points or 0.46% after trading in a range of 63486.64 and 63885.56. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.74%, while Small cap index was down by 0.41%.

The top gaining sectoral indices on the BSE were Energy up by 0.71%, Oil & Gas up by 0.57%, Realty up by 0.13% and Healthcare up by 0.07%, while Auto down by 1.69%, Consumer Durables down by 1.12%, Utilities down by 1.04%, Consumer Discretionary down by 0.94% and Power down by 0.87% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.66%, Tech Mahindra up by 1.24%, Ultratech Cement up by 0.44%, TCS up by 0.37% and JSW Steel up by 0.08%. On the flip side, Tata Motors down by 2.45%, Bajaj Finserv down by 2.27%, Mahindra & Mahindra down by 2.06%, Maruti Suzuki down by 1.93% and Bajaj Finance down by 1.87% were the top losers.

Meanwhile, in a positive development, India and the UK have reviewed the progress of negotiations of the proposed free trade agreement (FTA), talks for which have reached the final stage. The progress was reviewed by Commerce and Industry Minister Piyush Goyal and UK Secretary of State for Business and Trade Kemi Badenoch in Osaka, Japan. Both ministers are in Japan for the Group of Seven (G7) trade ministers meeting in Osaka. Goyal said ‘discussed the progress of India-UK free trade agreement negotiations with UK Secretary of State for Business and Trade Kemi Badenoch’.

With an aim to conclude the talks for the proposed FTA at the earliest, negotiations between senior officials of India and the UK are on to bridge differences on issues such as rules of origin and services sector. India and Britain launched the talks for a trade agreement in January 2022, with an aim to conclude them by Diwali last year (October 24, 2022), but the deadline was missed due to political developments in the UK. There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights. An investment treaty is also being negotiated as a separate agreement between India and the UK.

These investment treaties help in promoting and protecting investments in each other’s country. The main point of contention in this pact is the mechanism for settlement of disputes. The Indian industry is demanding greater access for its skilled professionals from sectors like IT, and healthcare in the UK market, besides market access for several goods at nil customs duty. On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, automobiles, lamb meat, chocolates and certain confectionary items. Britain is also looking for more opportunities for UK services in Indian markets in segments like telecommunications, legal and financial services (banking and insurance). The bilateral trade between India and the UK increased to $20.36 billion in 2022-23, from $17.5 billion in 2021-22.

The CNX Nifty is currently trading at 18946.50, down by 100.75 points or 0.53% after trading in a range of 18940.95 and 19083.70. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.13%, BPCL up by 2.09%, Reliance Industries up by 1.35%, Tech Mahindra up by 0.94% and SBI Life Insurance up by 0.34%. On the flip side, Tata Motors down by 2.60%, Mahindra & Mahindra down by 2.43%, Bajaj Finserv down by 2.37%, Maruti Suzuki down by 2.17% and Bajaj Finance down by 1.99% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 374.23 points or 1.21% to 30,617.46, Hang Seng declined 49.37 points or 0.28% to 17,349.36 and Jakarta Composite fell 24.17 points or 0.36% to 6,734.62. On the other hand, Taiwan Weighted rose 2.85 points or 0.14% to 16,156.46, KOSPI increased 13.85 points or 0.6% to 2,316.66, Straits Times added 5.69 points or 0.19% to 3,067.54 and Shanghai Composite was up by 5.12 points or 0.17% to 3,022.90.