Indian markets open in red amid global concerns following Powell’s remarks

Indian equity benchmarks made negative start on Friday tracking overnight losses on Wall Street as well as sell-off in the Asian counterparts as traders react to the hawkish remarks by US Fed Chair Jerome Powell that the central bank ‘will not hesitate’ to resume raising interest rates if it becomes appropriate. The surge in Treasury yields also weighed on the markets. Now, Sensex and Nifty are trading in red as investors remained on sidelines ahead of Diwali Muhurat Trading Session to be held on November 12. Investors also remained cautious ahead of the Industrial production data to be out later in the day. Persistent foreign fund outflows dented sentiments. Provisional data from the National Stock Exchange showed that foreign institutional investors offloaded shares worth Rs 1,712.33 crore on November 9. Traders also reacted to the RBI governor Shaktikanta Das’ statement that retail inflation remains vulnerable to recurring and overlapping food price shocks. 

However, downside remained capped as Moody’s Investors Service retained India’s economic growth forecast for 2023 at 6.7 per cent and said strong domestic demand will likely sustain the growth in the near term. On the sectoral front, banking stocks are in focus as Fitch Ratings said Indian Banks’ Viability Ratings (VR) will continue to benefit from improved operating conditions and performance in the near term. In stock specific development, AGS Transact Technologies traded higher as it won order for 1,350 ATMs from the State Bank of India (SBI), under its banking automation solutions portfolio. 

The BSE Sensex is currently trading at 64622.96, down by 209.24 points or 0.32% after trading in a range of 64580.95 and 64756.11. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.47%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were Utilities up by 0.70%, Power up by 0.36%, Telecom up by 0.10% and Realty up by 0.06%, while Auto down by 0.87%, Oil & Gas down by 0.78%, Consumer Durables down by 0.72%, Consumer discretionary down by 0.54% and Healthcare down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.00%, NTPC up by 0.55%, Bajaj Finance up by 0.49%, Tech Mahindra up by 0.47% and HCL Technologies up by 0.17%. On the flip side, Mahindra & Mahindra down by 1.77%, Asian Paints down by 1.13%, Titan Company down by 0.96%, Tata Steel down by 0.63% and Maruti Suzuki down by 0.59% were the top losers.

Meanwhile, retaining India’s economic growth forecast at 6.7 per cent for 2023, Moody’s Investors Service has said that strong domestic demand will likely sustain the growth in the near term. With exports remaining weak against an unfavourable global economic backdrop, Moody’s in its Global Macroeconomic Outlook 2024-25 said sustained domestic demand growth is propelling India’s economy. It said ‘We expect India’s real GDP to grow about 6.7 per cent in 2023, 6.1 per cent in 2024 and 6.3 per cent in 2025’. India’s real GDP rose 7.8 per cent year-over-year in June quarter, up from 6.1 per cent in March quarter and bolstered by a 6 per cent increase in household consumption and solid capital expenditure and service sector activity.

Moody’s said high-frequency indicators show that the economy’s strong June quarter momentum carried into July-September as well. It noted that robust goods and services tax collections, surging auto sales, rising consumer optimism and double-digit credit growth suggest urban consumption demand will likely remain resilient amid the ongoing festive season. However, rural demand, which has shown nascent signs of improvement, remains vulnerable to uneven monsoons that could lower crop yields and farm income. On supply side, expanding manufacturing and services PMIs and healthy core industries’ output growth add to evidence of solid economic momentum.

It further said ‘With exports remaining weak amid an unfavourable global economic backdrop, strong domestic demand will likely sustain growth in the near term. Domestic demand dynamics beyond the festive season will depend on the trajectory of inflation and the lagged impact of the RBI’s monetary policy tightening’. Headline inflation in September eased to 5 per cent from 6.8 per cent in the month prior, dropping back within the RBI’s target range. It said although core inflation also moderated to 4.5 per cent, from 4.8 per cent in August, upside risks to headline CPI from potential spikes in food and energy prices amid erratic weather and geopolitical uncertainty will keep the RBI vigilant.

The CNX Nifty is currently trading at 19343.20, down by 52.10 points or 0.27% after trading in a range of 19329.45 and 19366.00. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 1.13%, Power Grid up by 1.10%, ONGC up by 0.67%, Adani Ports & SEZ up by 0.58% and Coal India up by 0.48%. On the flip side, Mahindra & Mahindra down by 1.61%, Asian Paints down by 1.09%, Titan Company down by 0.88%, Hero MotoCorp down by 0.81% and Dr. Reddy's Lab down by 0.77% were the top losers.

All Asian markets are trading lower; Hang Seng declined 278.74 points or 1.59% to 17,232.55, Nikkei 225 slipped 152.96 points or 0.47% to 32,493.50, Taiwan Weighted lost 83.71 points or 0.5% to 16,661.94, Straits Times fell 26.75 points or 0.85% to 3,108.57, KOSPI dropped 21.98 points or 0.91% to 2,405.10, Shanghai Composite weakened 13.62 points or 0.45% to 3,039.66 and Jakarta Composite was down by 7.59 points or 0.11% to 6,830.64.