Domestic indices wipe out opening gains to trade in red in early deals

Indian equity benchmarks made slightly positive start on Tuesday tacking overnight gains on Wall Street. But, soon markets wiped out their gains and slipped into red in early deals owing to selling pressure in IT and select financial shares. Foreign fund outflows also dented sentiments. Provisional data from the National Stock Exchange (NSE) showed that foreign institutional investors (FIIs) net sold shares worth Rs 33.51 crore on December 18. However, downside remained limited as some support came in as provisional data shared by the Ministry of Finance showed that India's net direct tax collections from April 1 to December 17 (FY23-24) rose 20.7 percent on-year to Rs 13.70 lakh crore. Within overall direct tax collections, corporate tax mop-up amounted to Rs 6.95 lakh crore, while personal income tax and securities transaction tax together came in at Rs 6.73 lakh crore. 

On the global front, Asian markets are trading mixed as the Bank of Japan maintained its ultra-loose monetary settings on Tuesday in a widely expected move, underscoring policymakers' preference to await more clues on whether wages will rise enough to keep inflation durably around its 2 per cent target. Back home, the government cut the windfall profit tax on crude oil produced in the country and on exports of diesel. The tax, levied in the form of Special Additional Excise Duty or SAED, on domestically produced crude oil has been reduced to Rs 1,300 from Rs 5,000 per tonne. In stock specific development, Kaynes Tech jumped on getting nod to acquire Digicom Electronics for $2.5 million.

The BSE Sensex is currently trading at 71169.54, down by 145.55 points or 0.20% after trading in a range of 71137.38 and 71569.20. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.30%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were FMCG up by 0.56%, Energy up by 0.53%, Oil & Gas up by 0.30%, Healthcare up by 0.15% and Telecom up by 0.10%, while IT down by 0.92%, TECK down by 0.82%, Power down by 0.48%, Basic Materials down by 0.44% and Auto down by 0.40% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 1.78%, ITC up by 0.61%, Axis Bank up by 0.57%, Reliance Industries up by 0.55% and Larsen & Toubro up by 0.45%. On the flip side, Bajaj Finserv down by 1.39%, TCS down by 1.32%, Tech Mahindra down by 1.18%, Wipro down by 1.06% and Mahindra & Mahindra down by 0.89% were the top losers.

Meanwhile, revising upward India’s Gross Domestic Product (GDP) growth forecast to 6.5 per cent for FY24 from 6.2 per cent earlier, domestic rating agency Icra has said that the deflation in commodity prices will be sustained and there is expectation of better growth in the October-December period than previous estimates.

It said ‘the festive-led uptick in volume growth in high frequency non-agri indicators as evinced by ICRA Business Activity Monitor in October-November 2023 (11.3 per cent versus the 9.5 per cent in Q2FY24) leads us to believe that the GDP growth is likely to fare better in Q3 FY2024 than what we had penciled in’.

It added that the global commodity prices have remained benign in the ongoing quarter, partly owing to growing demand concerns from China, adequate supplies for commodities like crude oil, and normalisation of supply chains.

While October and November have seen higher activity, the early trends for December are mixed, the agency said, pointing to a moderation in electricity demand growth, a rise in daily vehicle registrations, and a contraction in diesel sales.

The CNX Nifty is currently trading at 21382.55, down by 36.10 points or 0.17% after trading in a range of 21367.30 and 21480.00. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 1.97%, Nestle up by 1.63%, Tata Consumer Products up by 1.57%, Coal India up by 1.34% and ONGC up by 0.83%. On the flip side, Bajaj Finserv down by 1.43%, TCS down by 1.28%, Adani Enterprises down by 1.26%, Tech Mahindra down by 1.09% and Hero MotoCorp down by 0.97% were the top losers.

Asian markets are trading mixed; Nikkei 225 surged 311.36 points or 0.95% to 33,070.34, Jakarta Composite gained 29.35 points or 0.41% to 7,148.88 and Straits Times rose 11.79 points or 0.38% to 3,125.02. On the other hand, Taiwan Weighted lost 103.52 points or 0.59% to 17,548.51, Hang Seng declined 102.93 points or 0.62% to 16,526.30, KOSPI dropped 1.55 points or 0.06% to 2,565.31 and Shanghai Composite was down by 0.62 points or 0.02% to 2,930.18.