Domestic indices turn volatile to trade in red after positive start ahead of macroeconomic data

Indian equity benchmarks started the Monday’s trading session in green terrain following the mostly positive cues from Wall Street on Friday. Easing crude oil prices also supported domestic markets. Oil prices fell in early Asian trade after Israel said it had concluded a series of strikes in southern Gaza, slightly easing concerns about supply from the Middle East. Domestic indices soon turned volatile and struggling for direction ahead of major macroeconomic data -- Consumer Price Index (CPI) for January and India Industrial Production (IIP) for December -- to be out later in the day. At this point of trade, Sensex and Nifty are trading lower with around 0.20% cut amid muted trading elsewhere in Asia on account of Lunar New Year holidays. Traders took note of Piyush Goyal’s statement that India may not get the same amount of foreign direct investment (FDI) in the current financial year as compared to FY23, but I don’t see it as a material factor. However, losses remained capped amid the finance ministry data showing that direct tax collections grew 20.25 per cent till February 10 of the current financial year (FY24), which is more than the 17.24 per cent pegged in the revised estimates (RE) for the entire year. 

On the global front, among the Asian markets, Jakarta Composite is trading higher in thin trade amid dovish Bank of Japan. Markets in China, Hong Kong, Singapore, Malaysia, Taiwan and South Korea are closed for the Lunar New Year holiday and the Japanese stock market is closed for National Foundation Day holiday. Back home, the centre has released about Rs 15,948 crore under different schemes in the last five years till January 31 to various sugar mills to improve their liquidity for clearing cane price dues of farmers. In stock specific development, Navin Fluorine gained as Life Insurance of India (LIC) increased stake in the company to 7.07 per cent from 5.03 per cent earlier.

The BSE Sensex is currently trading at 71452.66, down by 142.83 points or 0.20% after trading in a range of 71418.19 and 71756.58. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.54%, while Small cap index was down by 0.88%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.01%, IT up by 0.69%, TECK up by 0.46% and Auto up by 0.07%, while PSU down by 1.80%, Utilities down by 1.73%, Energy down by 1.46%, Oil & Gas down by 1.34% and Power down by 1.31% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 2.33%, HCL Technologies up by 1.35%, Infosys up by 0.99%, Tech Mahindra up by 0.77% and Sun Pharma up by 0.72%. On the flip side, Power Grid down by 1.78%, NTPC down by 1.37%, SBI down by 1.33%, Reliance Industries down by 1.11% and Bajaj Finance down by 1.02% were the top losers.

Meanwhile, expressing optimism over India’s growth prospects, Commerce and Industry Minister Piyush Goyal has said that India continues to be a preferred FDI (foreign direct investment) destination despite soaring global interest rates. He said that interest rates rose worldwide including in the US and that led to the flow of capital back in the developed nations. He said ‘That was a period where one would have imagined a much deeper impact on the developing economies than what India witnessed, but the strength of demand in India, the strength of opportunities that people saw in India, ensured that we did not see the drastic fall that many of our other peer countries (witnessed)’. 

The total FDI -- which includes equity inflows, reinvested earnings and other capital -- contracted 15.5 per cent to $32.9 billion during April-September this fiscal against $38.94 billion in April-June 2022. He further said ‘We continue to have significant FDI coming in...a lot of reinvestment of earnings happened even during this period when ideally I would have thought global balance sheets were very stressed’. 

He added that India continues to see traction for investments and the country ‘continues to see money coming in’. He also said ‘The material factor is that it (FDI) continues to come in. Very often when you see a very rapid growth on any statistic, you need some time for it to cool down also’. He said a very continuous and rapid growth of money flow sometimes is 'very harmful' for an economy also, ‘so I think India has been able to create a very fine balance in our control of inflation’.

The CNX Nifty is currently trading at 21734.55, down by 47.95 points or 0.22% after trading in a range of 21729.95 and 21831.70. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Divi's Lab up by 3.80%, Wipro up by 2.11%, Dr. Reddy's Lab up by 1.88%, UPL up by 1.64% and HCL Technologies up by 1.40%. On the flip side, Coal India down by 3.32%, Hero MotoCorp down by 2.60%, ONGC down by 2.39%, Power Grid down by 1.83% and BPCL down by 1.73% were the top losers.

In the Asian markets, Jakarta Composite rose 38.31 points or 0.53% to 7,273.46.