Markets slip in red after positive start on Monday

Indian equity benchmarks made slightly positive start on Monday amid foreign fund inflows. Provisional data from the NSE showed that foreign institutional investors (FIIs) bought shares worth Rs 1,696.86 crore on January 5. But, soon markets wiped out their gains and slipped into red terrain and are trading marginally in red in early deals amid rising geopolitical crisis. China announced sanctions on five US defence-related companies in response to sanctions on Chinese companies and arm sales to Taiwan. Domestically, traders were concerned as a report by economic think tank GTRI said the increasing Red Sea crisis may impact trade as it is expected to push shipping costs by up to 60 per cent and insurance premium by 20 per cent. Traders avoided taking any long position ahead of kick start of Q3FY24 earnings season later in the week. 

However, down side remained capped as the first advance estimates of national income released by the National Statistical Office (NSO) projected the Indian economy to grow at 7.3 per cent in 2023-2024 - higher than the Reserve Bank of India’s estimate of 7 per cent - assuming an investment-led recovery in the world’s fifth largest economy. 

On the global front, Asian markets are trading mostly lower, despite the slightly positive cues from Wall Street on Friday, as traders reacted to key U.S. economic data, including a closely watched job growth data that came in stronger than expected in December, raising concerns about the outlook for interest rates. The Japanese stock market is closed for Coming of Age Day holiday. Back home, insurance industry stocks are in focus as the monthly premiums of non-life insurance companies grew by 14.74 per cent in December 2023 to Rs 25,098.18 crore from Rs 21,874.61 crore in the year-ago month. In stock specific development, Godrej Industries jumped after it signed a MoU with the Government of Gujarat.

The BSE Sensex is currently trading at 71888.29, down by 137.86 points or 0.19% after trading in a range of 71844.85 and 72181.77. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.39%, while Small cap index was down by 0.29%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.59%, Energy up by 0.35%, Auto up by 0.28%, Realty up by 0.24% and Consumer Discretionary up by 0.05%, while FMCG down by 1.05%, Healthcare down by 0.73%, IT down by 0.50%, Power down by 0.48% and Basic Materials down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 0.64%, Bharti Airtel up by 0.44%, Reliance Industries up by 0.30%, Sun Pharma up by 0.22% and HCL Technologies up by 0.19%. On the flip side, Hindustan Unilever down by 1.44%, ITC down by 0.95%, Bajaj Finance down by 0.92%, TCS down by 0.79% and Bajaj Finserv down by 0.78% were the top losers.

Meanwhile, notwithstanding geopolitical headwinds and inflationary concerns, Union Commerce and Industry Minister Piyush Goyal has expressed optimism that the country will meet its ambitious $2 trillion export target by 2030. He cited the Ukraine war, the Israel conflict and issues related to the Red Sea as factors impacting trade. 

He said ‘India’s exports increased from around Rs 38 lakh crore in 2020-21 to around Rs 60 lakh crore in 2022-23. When this sort of increase in exports took place in just two years, you can imagine how much income has increased during this time. Our entrepreneurs, start-ups and farmers, among others, got many opportunities’.
He said ‘To address low food grain production and curb domestic inflation, we have implemented restrictions. However, despite all these challenges, India’s exports will continue to grow, aiming at reaching $2 trillion by 2030 from the current $770-775 billion’.

He highlighted the potential of the jute industry, stating that with ‘contribution from the jute sector and concerted efforts from the Centre and state governments, we can achieve new heights’. India currently exports around Rs 1,500 crore worth of jute. He also urged industry players to increase the figure.

The CNX Nifty is currently trading at 21670.35, down by 40.45 points or 0.19% after trading in a range of 21655.20 and 21763.95. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.41%, Hero MotoCorp up by 1.22%, ONGC up by 0.95%, Eicher Motors up by 0.92% and Bharti Airtel up by 0.71%. On the flip side, UPL down by 2.12%, Hindustan Unilever down by 1.32%, Tata Consumer Products down by 1.32%, Apollo Hospital down by 1.25% and Divi's Lab down by 1.18% were the top losers.

Asian markets are trading mostly in red; Hang Seng slipped 344.89 points or 2.09% to 16,190.44, Shanghai Composite weakened 26.78 points or 0.92% to 2,902.40, Jakarta Composite fell 19.6 points or 0.27% to 7,331.02, KOSPI was down by 10.77 points or 0.42% to 2,567.31. On the other hand, Taiwan Weighted added 75.04 points or 0.43% to 17,594.18 and Straits Times was up by 2.69 points or 0.08% to 3,186.99.