Sensex, Nifty trade lower with marginal cuts in early deals

Indian markets made cautious start on Friday amid lackluster cues from Asian counterparts as most of the markets are close for holiday. Soon, markets turned volatile and swinging between gains and losses. At this point of trade, Sensex and Nifty are trading lower with marginal cuts as selling in PSU, Oil & Gas and Metal counters dragged indices down. Broader indices -- BSE Mid & Small cap -- are underperforming larger peers with losses of over one and half a percent. Overnight surge in crude oil prices dented sentiments. Oil prices rose on concerns of a broadening conflict in the Middle East after Israel rejected a ceasefire offer from Hamas. Also, foreign fund outflows dampened sentiments in the domestic markets. Provisional data from the NSE showed that foreign institutional investors (FIIs) net sold shares worth Rs 4,933.78 crore on February 8. However, downside remained capped as some support came in as the Reserve Bank of India’s (RBI) consumer confidence survey showed that the households expect improvements in general economic and employment conditions to continue over the next one year. 

On the global front, Asian markets are trading mixed, following the slightly positive cues from Wall Street overnight, with most markets in the region are fully or partially closed for Lunar New Year holidays. Japan's Nikkei is trading at fresh 34-year highs. However, uncertainty about the outlook for interest-rate trajectory continues to weigh on the markets. China, South Korea, Taiwan and Indonesia are closed for the Lunar New Year holidays. Singapore and Hong Kong will have half-days.

Back home, telecom stocks are in focus as the Cabinet approved the next spectrum auctions set to be held later this year with a reserve price of Rs 96,317 crore. All the available spectrum in 800, 900, 1800, 2100, 2300, 2500, 3300 megahertz (MHz) and 26 gigahertz (GHz) bands will be put to auction. In stock specific development, RVNL traded lower after it reported a 6 per cent decline in Q3 net profit to Rs 359 crore vs a year ago. LIC traded higher as its Q3 standalone profit grew 49 per cent YoY to Rs 9,444 crore. 

The BSE Sensex is currently trading at 71358.81, down by 69.62 points or 0.10% after trading in a range of 71200.31 and 71640.98. 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 1.62%, while Small cap index was down by 2.09%.

The only gaining sectoral indices on the BSE were Bankex up by 0.21% and Consumer Durables up by 0.10%, while PSU down by 2.94%, Oil & Gas down by 2.84%, Metal down by 2.47%, Telecom down by 2.41% and Energy down by 2.25% were the top losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 1.02%, Bajaj Finance up by 0.88%, Reliance Industries up by 0.69%, TCS up by 0.65% and Titan Company up by 0.48%. On the flip side, Mahindra & Mahindra down by 2.09%, Tata Steel down by 1.67%, Bharti Airtel down by 1.55%, Tata Motors down by 1.35% and JSW Steel down by 1.22% were the top losers.

Meanwhile, Ministry of finance and Ministry of shipping as well as commerce and industry have discussed problems being faced by exporters due to the Red Sea crisis and the commerce ministry has suggested sharing specific matters for their resolution. There is no adverse impact on the country’s exports due the crisis so far. However, according to exporters, the impact is likely to figure in the numbers of March-April. At present, exporters are executing their old orders and the impact could be visible when they would start getting new export orders.

The commerce ministry asked federation of Indian export organisations (FIEO) to coordinate with all the councils and share the problems ‘with us and those issues can be discussed in weekly meetings with commerce, and finance’. FIEO Director General Ajay Sahai said that freight rates have jumped multiple times. He added ‘High freight rates are impacting the exporting community. We are at dis-advantageous position as compared to countries which are not getting impacted from the crisis’. The exporting community has urged the commerce ministry to intervene in freight rates as the shippers are charging huge amounts. The commerce ministry has also asked the ECGC not to increase the export credit interest rates. State-owned ECGC is an export promotion organisation, seeking to improve the competitiveness of Indian exporters by providing them with credit insurance covers.

The situation around the Bab-el-Mandeb Strait, a crucial shipping route for traders connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, has escalated due to attacks by Yemen-based Houthi militants in December 2023. Because of this, the shipping costs have jumped and the consignments are taking more time to reach Europe and the US as the ships are taking the Cape of Good Hope route, encircling Africa. Longer routes are resulting in delays of about 14-20 days and also higher freight and insurance costs. Meanwhile, the country’s exports edged up 1 per cent to $38.45 billion in December 2023 while the trade deficit narrowed to a three-month low of $19.8 billion. Imports declined by 4.85 per cent to $58.25 billion in December last year due to a dip in crude oil shipments.

The CNX Nifty is currently trading at 21677.00, down by 40.95 points or 0.19% after trading in a range of 21664.45 and 21780.50. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 1.41%, ICICI Bank up by 1.11%, Bajaj Finance up by 0.87%, Britannia Industries up by 0.71% and Axis Bank up by 0.62%. On the flip side, ONGC down by 3.68%, Hindalco down by 3.35%, Coal India down by 3.14%, BPCL down by 3.13% and Mahindra & Mahindra down by 1.95% were the top losers.

Asian markets are trading mixed; Hang Seng slipped 153.11 points or 0.97% to 15,724.96 and Straits Times was down by 8.03 points or 0.26% to 3,134.88, while Nikkei 225 was up by 198.85 points or 0.54% to 37,062.13.