Domestic indices trade lower on weak Asian cues amid rise in US Treasury yields

Indian equity benchmarks made negative start on Tuesday tracking weakness in Asian counterparts after U.S. Treasury yields rose across the curve as a result of a heavy slate of corporate debt sales and a series of auctions beginning today. Markets are trading lower with cut of around quarter a percent each in early deals due to consolidation phase after three days of consistent buying. Traders are concerned as financials witnessed the most FPI selling in October to the tune of Rs 118.04 billion. Information Technology (IT) stocks saw outflows worth Rs 32.62 billion, amid weak results, elevated US Treasury yields and rate concerns in the US. Also, according to the provisional data available on the NSE, foreign institutional investors (FII) offloaded shares worth net Rs 549.37 crore on November 6, 2023. Investors are awaiting China's trade data as well as Q2 earnings from India Inc. for more directional cues. 

However, downside remained limited as credit rating agency Fitch ratings in its latest report said the Indian economy has the potential to clock 6.2 per cent annual average growth rate in the medium term during the 2019-27 period. On the sectoral front, insurance industry stocks are in focus as the data shared by the General Insurance Council showed that the monthly premiums of non-life insurance companies grew by 13.65 per cent in October this year to Rs 23,814.64 crore, up from Rs 20,954.89 crore in the same period last year, aided by healthy growth across segments. In stock specific development, Adani Energy Solutions inched up on reporting a 47 percent rise in quarterly profit.

The BSE Sensex is currently trading at 64773.41, down by 185.28 points or 0.29% after trading in a range of 64741.96 and 65021.29. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.18%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.43%, Utilities up by 0.36%, Power up by 0.23%, PSU up by 0.20% and Oil & Gas up by 0.16%, while Realty down by 0.82%, Telecom down by 0.49%, Bankex down by 0.37%, Capital Goods down by 0.14% and Metal down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 1.26%, Bajaj Finance up by 0.56%, NTPC up by 0.47%, Indusind Bank up by 0.42% and Nestle up by 0.37%. On the flip side, Power Grid down by 0.82%, ICICI Bank down by 0.81%, HDFC Bank down by 0.69%, Asian Paints down by 0.49% and Bharti Airtel down by 0.44% were the top losers.

Meanwhile, with an improvement in the employment rate and a modest increase in the working-age population forecast, Fitch Ratings in its latest report has raised India's medium-term potential growth estimate by 70 basis points to 6.2 per cent from 5.5 percent earlier estimates. It attributed the higher growth forecast for India to a swift recovery in labour force participation rates, following significant declines in 2020. It defined the medium term as a period from 2023 to 2027. It added that India's labour productivity forecast is also higher. 

India's projected labour supply growth is also lower relative to 2019 given the expected negative growth in the participation rate. It further said while the participation rate has recovered from its pandemic slump, it remains significantly below levels recorded in the early 2000s, partly as the employment rate among women remains very low.

It projected medium-term potential growth for the 10 emerging economies at 4 per cent, down from 4.3 per cent from the previous estimate. This was driven by a 0.7 percentage point (pp) cut in China's growth estimate. It has lowered China's supply-side GDP growth potential to 4.6 per cent from 5.3 per cent. It said China's growth has slowed sharply in recent years and prospects for capital deepening have deteriorated as the property slump weighs heavily on the investment outlook. It also cut Russia's potential growth, by 0.8pp to 0.8 per cent. By contrast, it made upward revisions to Brazil, India, Mexico, Indonesia, Poland and Turkey relative to its previous estimates.

The CNX Nifty is currently trading at 19366.50, down by 45.25 points or 0.23% after trading in a range of 19348.70 and 19410.00. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 1.24%, Dr. Reddy's Lab up by 1.07%, ONGC up by 1.01%, Indusind Bank up by 0.73% and Bajaj Finance up by 0.70%. On the flip side, ICICI Bank down by 0.91%, Power Grid down by 0.82%, HDFC Bank down by 0.76%, Asian Paints down by 0.59% and Coal India down by 0.57% were the top losers.

All Asian markets are trading lower; Nikkei 225 slipped 375.62 points or 1.15% to 32,332.86, Hang Seng declined 270.02 points or 1.5% to 17,696.57, KOSPI dropped 78.14 points or 3.12% to 2,424.23, Jakarta Composite lost 34.01 points or 0.49% to 6,844.83, Shanghai Composite weakened 10.81 points or 0.35% to 3,047.60, Straits Times fell 10.6 points or 0.33% to 3,169.93 and Taiwan Weighted was down by 1.48 points or 0.01% to 16,647.88.