Benchmarks remain in red in late morning deals

Indian equity benchmarks remained in red in late morning deals, amid weak trends from Asian markets. Traders preferred to stay on the sidelines ahead of the earnings season which kick starts on Thursday. Traders also remained cautious with India Ratings and Research Chief Economist Devendra Kumar Pant’s statement that the Indian economy is facing the challenge of lower consumption growth as high inflation is impacting people in the lower income bracket. He said although the country's economy is now resilient enough to deal with the dual shocks of below-normal monsoon and high global oil prices, the challenge is to bring down inflation so that people can have more disposable income in their hands. On the global front, Asian markets are trading mostly in red after Wall Street snapped its winning streak, while investors braced for U.S. inflation data and a corporate reporting season where good results are needed to justify high stock valuations.

The BSE Sensex is currently trading at 71879.86, down by 146.29 points or 0.20% after trading in a range of 71813.28 and 72181.77. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.28%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were Realty up by 0.91%, Oil & Gas up by 0.40%, Auto up by 0.34%, Power up by 0.18% and Energy up by 0.16%, while FMCG down by 1.12%, Basic Materials down by 0.82%, Healthcare down by 0.81%, IT down by 0.57% and Metal down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 1.06%, Power Grid Corporation up by 0.91%, HCL Tech. up by 0.73%, Bharti Airtel up by 0.71% and Tata Motors up by 0.61%. On the flip side, Hindustan Unilever down by 1.49%, ITC down by 1.14%, Tech Mahindra down by 0.96%, Nestle down by 0.88% and TCS down by 0.69% were the top losers.

Meanwhile, India Ratings and Research Chief Economist Devendra Kumar Pant has said the Indian economy is facing the challenge of lower consumption growth as high inflation is impacting people in the lower income bracket. He said although the country's economy is now resilient enough to deal with the dual shocks of below-normal monsoon and high global oil prices, the challenge is to bring down inflation so that people can have more disposable income in their hands.

He stated 'One percentage point reduction in inflation will lead to 64 basis points increase in GDP or 1.12 percentage points increase in PFCE (Private final consumption expenditure) growth... If inflation can be brought down by 1 percentage point, it would be a win win.’ PFCE denotes money spent by individuals on goods and services for personal consumption.'

As per the estimates of Ind-Ra, which is a subsidiary of global rating agency Fitch Ratings, PFCE would grow 5.2 per cent year on year in current fiscal, as against 7.5 per cent in last fiscal. Pant said economic growth is being driven by government expenditure and such high level of capex year after year poses risks to fiscal deficit and debt, which in turn will keep interest rates elevated. Besides, the Indian economy grew 7.2 per cent in 2022-23 fiscal and as per government estimates, the growth in the current fiscal would be 7.3 per cent.

The CNX Nifty is currently trading at 21650.05, down by 60.75 points or 0.28% after trading in a range of 21644.75 and 21763.95. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were ONGC up by 1.27%, Bajaj Finance up by 1.07%, Adani Ports &SEZ up by 0.96%, Hero MotoCorp up by 0.80% and Bharti Airtel up by 0.71%. On the flip side, UPL down by 2.55%, Divi's Lab down by 2.20%, Tata Consumer Product down by 1.95%, Dr. Reddy's Lab down by 1.51% and Hindustan Unilever down by 1.50% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 335.45 points or 2.03% to 16,199.88, KOSPI dropped 9.38 points or 0.36% to 2,568.70, Jakarta Composite plunged 24.31 points or 0.33% to 7,326.31 and Shanghai Composite weakened 30.11 points or 1.03% to 2,899.07.

On the flip side, Taiwan Weighted added 71.87 points or 0.41% to 17,591.01 and Straits Times rose 5.82 points or 0.18% to 3,190.12.