Markets trade lower in early deals amid profit booking after recent rally

Indian equity benchmarks made negative start in the final session of the year 2023 tracking mixed cues from global markets. Markets are trading lower with cut of around 0.25% each in early deals on Friday as investors booked profits after five consecutive session of gains. Traders are concerned as the RBI’s Financial Stability Report said that the increase in risk weights for personal loans and loans to non-banking financial companies (NBFCs) may lead to a decline in the capital adequacy ratio of 71 basis points (bps) of the banking system. However, downside remained capped as Assocham said India is likely to remain the fastest-growing major economy in the world in 2024 on the back of strong consumer demand leading to a pick-up in investment across sectors such as construction, hospitality and infrastructure including railways and aviation. 

On the global front, Asian markets are trading mixed in the final session of the year, following the lackluster cues from Wall Street overnight, amid optimism about the likelihood of near-term interest rate cuts by the US Fed, but traders are cautious and remain reluctant to make significant moves going into the end of the year and ahead of the New Year's long weekend. 

Back home, oil marketing companies’ stocks are trading in under pressure with a private report that the Petroleum Ministry has prepared a proposal incorporating the cuts on petrol and diesel ahead of general elections of 2024. As per the report, the cuts could be in the range of Rs 4 to Rs 10 per litre. In stock specific development, Adani Enterprises edged up after it partnered with Sirius International Holding, to create a joint venture named Sirius JV.

The BSE Sensex is currently trading at 72232.20, down by 178.18 points or 0.25% after trading in a range of 72173.82 and 72417.01. There were 9 stocks advancing against 21 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 0.27%.

The top gaining sectoral indices on the BSE were Auto up by 0.71%, Telecom up by 0.65%, FMCG up by 0.46%, Consumer Discretionary up by 0.27% and Industrials up by 0.26%, while Utilities down by 0.52%, Bankex down by 0.49%, Energy down by 0.39%, Power down by 0.39% and Oil & Gas down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.95%, Maruti Suzuki up by 0.79%, Bajaj Finserv up by 0.63%, Sun Pharma up by 0.55% and Hindustan Unilever up by 0.50%. On the flip side, NTPC down by 1.02%, SBI down by 0.96%, Infosys down by 0.89%, Kotak Mahindra Bank down by 0.88% and Power Grid down by 0.80% were the top losers.

Meanwhile, expressing optimism over India’s economic growth, Assocham has said that India is likely to remain the fastest-growing major economy in the world in 2024 on the back of strong consumer demand leading to a pick up in investment across sectors such as construction, hospitality and infrastructure including railways and aviation. India retained the tag of the world’s fastest-growing major economy, with its GDP expanding by a faster-than-expected rate of 7.6 per cent in the July-September quarter on booster shots from government spending and manufacturing.

The country’s Gross domestic product (GDP) growth of 7.6 per cent beat most estimates, including 6.5 per cent projected by the Reserve Bank of India (RBI). The growth compares to 6.2 per cent in the same quarter last year and 7.8 per cent expansion in the preceding quarter. India’s GDP growth beat China’s 4.9 per cent rise in July-September, while the Western economies are getting crushed under high-interest rates and energy prices.

Assocham Secretary General Deepak Sood said ‘India’s macro picture looks quite convincing with the overall economy following a trend growth of seven per cent with critical building blocks combining to give it brighter prospects’. According to the industry body, India Inc led by financials, construction, hotels, aviation, automobile and other manufacturing areas like electronics are on a strong pitch to further improve performance in the coming year. The trajectory is being helped by the low crude oil prices, keeping inflation in check with a big positive on raw material cost.

It noted ‘Sectors like construction have several related industries which too have gained momentum. These include steel, cement, mining, electricity generation and consumer durables’. It said the macroeconomic indicators including government balance sheet reflected in strong tax collections, record foreign exchange reserves, stability in the rupee against major currencies and signs of revival in merchandise exports are expected to further improve.

The CNX Nifty is currently trading at 21732.80, down by 45.90 points or 0.21% after trading in a range of 21703.90 and 21770.30. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Tata Consumer Products up by 3.09%, Tata Motors up by 1.94%, Eicher Motors up by 0.80%, Maruti Suzuki up by 0.75% and Sun Pharma up by 0.54%. On the flip side, BPCL down by 1.88%, SBI down by 1.10%, NTPC down by 1.05%, Apollo Hospital down by 0.98% and Kotak Mahindra Bank down by 0.97% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 107.35 points or 0.32% to 33,432.27, Hang Seng declined 66.54 points or 0.39% to 16,976.99, Jakarta Composite plunged 31.25 points or 0.43% to 7,272.64 and Taiwan Weighted lost 10.77 points or 0.06% to 17,899.60. On the other hand, Straits Times rose 26.47 points or 0.82% to 3,240.87 and Shanghai Composite was up by 9.98 points or 0.34% to 2,964.68.