Bourses trade deep in red in late afternoon session

Indian equity markets entered into red territory and currently traded near day’s low levels in late afternoon session amid profit booking. All the sectoral indices traded in red. Heavy selling pressure was witnessed in Metal and Banking sectors’ stocks. Investors shrugged off report that Federal Reserve will trim interest rates earlier in 2024. Meanwhile, Parliament has given its approval for a net additional spending of Rs 58,378.21 crore in the current fiscal ending March 2024 (FY24), with a large chunk allocated to MGNREGA and fertiliser subsidies. The gross additional spending would be more than Rs 1.29 lakh crore, out of which Rs 70,968 crore would be matched by savings and receipts.

On the global front, Asian markets were trading mostly in green after Wall Street extended its rally overnight on bets of interest rate cuts in 2024. European markets were trading higher after Richmond Fed President Thomas Barkin suggested the U.S. central bank would lower interest rates if recent progress on inflation continued. Soft inflation data from Germany and the U.K. also boosted hopes for rate cuts next year. 

The BSE Sensex is currently trading at 70949.28, down by 487.91 points or 0.68% after trading in a range of 70824.07 and 71913.07. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 2.00%, while Small cap index was down by 2.51%.

The top losing sectoral indices on the BSE were Utilities down by 3.50%, Telecom down by 3.24%, Power down by 3.21%, PSU down by 2.65% and Metal was down by 2.32%, while there were no gaining sectoral indices on the BSE.

The only gainers on the Sensex were HDFC Bank up by 0.55% and Titan Company up by 0.08%. On the flip side, Tata Steel down by 2.70%, Tata Motors down by 2.67%, SBI down by 2.50%, NTPC down by 2.39% and Power Grid down by 2.22% were the only losers.

Meanwhile, building on the fast-paced recovery in FY23, Credit rating agency ICRA in its latest report has said that the domestic air passenger traffic is expected to grow by 8-13% in FY24, thus reaching 150-155 million, surpassing the pre-Covid levels of 141.2 million seen in FY20. It said the momentum is expected to continue in FY25 as well with a similar estimated YoY growth, aided by rising demand for air travel and improving airport infrastructure. 

According to the report, during 8M FY24, domestic air passenger traffic stood at 100.7 million, witnessing a YoY growth of 17%, and 5% higher than the pre-Covid levels (8M FY20) of 95.7 million. Further, the international passenger traffic for Indian carriers, at 23.9 million in FY23, surpassed the pre-Covid levels, although it trailed the peak levels of 25.9 million in FY19. The same is expected to cross this level in the current fiscal (FY24), with an estimated 25-27 million passengers. Moreover, the airlines witnessed better pricing power, as reflected in improved yields and in the spread between revenue per available seat kilometre and cost per available seat kilometre (RASK-CASK) for the airlines. ICRA thus maintains its Stable outlook on the industry in view of healthy passenger traffic growth, improved yields and stable cost environment.

It further stated that despite a healthy recovery in passenger traffic and improvement in yields, the movement of the latter will remain monitorable amidst elevated ATF prices and depreciation of the INR vis-a-vis the $ compared to pre-Covid levels, both of which have a major bearing on the airlines’ cost structure. The average ATF prices stood at Rs 103,189/KL in 9M FY2024, 59% higher compared to an average of Rs 64,715/KL during FY2020, albeit a decline of 17% compared to Rs 121,013 /KL in FY2023.

The CNX Nifty is currently trading at 21283.65, down by 169.45 points or 0.79% after trading in a range of 21252.40 and 21593.00. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.25%, Tata Consumer up by 2.21%, Britannia up by 1.17%, HDFC Bank up by 0.60% and Hero MotoCorp up by 0.42%. On the flip side, Adani Ports down by 4.36%, Adani Enterprises down by 3.85%, UPL down by 3.08%, Tata Steel down by 2.70% and Coal India down by 2.60% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 456.55 points or 1.36% to 33,675.94, Hang Seng advanced 108.81 points or 0.65% to 16,613.81, Taiwan Weighted added 58.65 points or 0.33% to 17,635.20, KOSPI increased 45.75 points or 1.75% to 2,614.30 and Jakarta Composite was up by 23.63 points or 0.33% to 7,211.48. On the flip side, Straits Times fell 5.56 points or 0.18% to 3,111.06 and Shanghai Composite was down by 30.28 points or 1.04% to 2,902.11.

European markets were trading higher; UK’s FTSE 100 increased 96.83 points or 1.25% to 7,734.86, France’s CAC rose 15.68 points or 0.21% to 7,590.35 and Germany’s DAX was up by 27.57 points or 0.16% to 16,771.98.