Markets trade under pressure in early deals amid foreign fund outflows

Indian equity benchmarks extended their previous session’s southward journey with negative start on Thursday tracking overnight losses on Wall Street amid fading optimism about an early rate cut by the US Fed. Markets are trading under pressure with cut of around a percent each in early deals. Sensex and Nifty are lingering below their crucial 70,900 and 21,350 levels, respectively. The weekly F&O expiry added some volatility in the markets. Foreign fund outflows also dented sentiments. Provisional data from the NSE showed that foreign institutional investors (FIIs) sold shares worth Rs 10,578.13 crore on January 17. Traders largely overlooked Governor Shaktikanta Das’ statement that consumer price index-based inflation, the main yardstick for the Reserve Bank of India’s policy making, is likely to average 4.5 per cent in the next financial year and gross domestic product (GDP) growth is likely to stay above 7 per cent. 

Most of the Asian markets are trading higher despite the broadly negative cues from global markets overnight. Nikkei 225 traded in green amid continued weakness in the yen. Meanwhile, the value of core machine orders in Japan was down a seasonally adjusted 4.9 percent on month in November, the Cabinet Office said - coming in at 816.7 billion yen. That was well shy of expectations for a fall of 0.8 percent following the 0.7 percent increase in October.

Back home, in stock specific development, LTIMindtree dropped after the company missed Q3 estimates. Asian Paints declined on weak management commentary. Asian Paints revenue grew 5.4 per cent on-year, while the sales volumes were up 12 per cent. On the other hand, Oracle Financial soared after it reported a 69.4 per cent Y-o-Y increase in net profit at Rs 740.8 crore for Q3FY24.

The BSE Sensex is currently trading at 70880.48, down by 620.28 points or 0.87% after trading in a range of 70857.65 and 71190.85. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.89%, while Small cap index was down by 1.50%.

The top losing sectoral indices on the BSE were Utilities down by 2.74%, Power down by 2.53%, PSU down by 2.16%, Metal down by 2.05% and Realty down by 2.02%, while there was no gainer on the BSE sectoral front.

The few gainers on the Sensex were Axis Bank up by 1.02%, Bharti Airtel up by 0.66%, ICICI Bank up by 0.20% and Tata Motors up by 0.15%. On the flip side, Power Grid down by 3.81%, Asian Paints down by 3.00%, NTPC down by 2.75%, HDFC Bank down by 2.40% and Wipro down by 2.34% were the top losers.

Meanwhile, expressing optimism over India’s economic growth, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the country’s Gross Domestic Product (GDP) should record a growth rate of 7 per cent in the next fiscal year 2024-25 (FY25). He added that inflation is likely to ease further. He noted the real GDP growth in India is expected at 7.2 per cent this year.

He also credited the government for structural reforms undertaken in recent years, and said that they have boosted the medium and long-term growth prospects of the Indian economy. He said that amidst a challenging global macroeconomic environment, India presents a picture of growth and stability.

Das said recent information on the global economic front has been reassuring with inflation falling, though growth remains low. He said ‘Chances of soft landing have improved and markets have reacted positively. However, geopolitical risks and climate risks remain matters of concern’.

The CNX Nifty is currently trading at 21345.90, down by 226.05 points or 1.05% after trading in a range of 21342.10 and 21474.40. There were 3 stocks advancing against 47 stocks declining on the index.

The few gainers on Nifty were Axis Bank up by 1.06%, Bharti Airtel up by 0.89% and HDFC Life Insurance up by 0.14%. On the flip side, LTIMindtree down by 11.28%, Power Grid down by 4.10%, Divi's Lab down by 3.43%, NTPC down by 2.99% and Asian Paints down by 2.98% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 131.87 points or 0.37% to 35,609.62, Hang Seng advanced 105.15 points or 0.68% to 15,382.05, Taiwan Weighted rose 76.65 points or 0.44% to 17,238.44, Jakarta Composite gained 49.7 points or 0.69% to 7,250.34, KOSPI increased 9.42 points or 0.39% to 2,445.32 and Straits Times was up by 5.36 points or 0.17% to 3,147.58, while Shanghai Composite weakened 44.93 points or 1.61% to 2,788.69.