Benchmarks continue to trade lower in morning deals

Indian equity benchmarks continued to trade lower in morning deals, tracking global market selloff. The investors were worried following hotter-than-expected US inflation data that pushed Fed rate cut hopes further back to second half of 2024. Traders took a note of former Reserve Bank Governor C Rangarajan stating that India needs to grow at seven to eight per cent annually in order to become a developed nation with $13000 per capita income by 2047. Asserting that innovation cannot be a single solution to reduce inequalities or poverty, he said besides faster growth rate, the country may need social safety nets such as subsidies in kind of cash and basic income. Sectorally, majority of automobile industry's stocks were trading in red as the Federation of Automobile Dealers Associations (FADA) stated that the February outlook for the automobile industry leans toward cautious optimism with growth potential. It said though in January the industry logged good growth, there are challenges and market complexities as regards the prospects for the current month.  

The BSE Sensex is currently trading at 71068.40, down by 486.79 points or 0.68% after trading in a range of 70809.84 and 71153.56. There were 8 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.02%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were PSU up by 0.69%, Telecom up by 0.69%, Power up by 0.49%, Energy up by 0.48% and Oil & Gas up by 0.39%, while IT down by 1.69%, TECK down by 1.50%, Healthcare down by 1.01%, Bankex down by 0.38% and Consumer Durables down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 0.53%, Bajaj Finance up by 0.46%, Power Grid Corporation up by 0.44%, SBI up by 0.25% and Bajaj Finserv up by 0.21%. On the flip side, Tech Mahindra down by 2.59%, Infosys down by 2.55%, Wipro down by 1.85%, Sun Pharma down by 1.65% and HDFC Bank down by 1.62% were the top losers.

Meanwhile, rating firm Icra has said annual revenue growth of leading auto component manufacturing companies will come down to 5-7 per cent in the next fiscal due to moderation in domestic volumes and a drop in exports. According to Icra estimates, its sample of 45 auto ancillaries, with aggregate annual revenues of Rs 2.7 lakh crore in FY23, is likely to grow by 9-11 per cent in FY24, driven by healthy domestic demand despite a high base and moderate growth in exports.

It also noted that capex towards capacity enhancements and technological development resulted in higher investment in FY24, which is likely to continue in FY25. It stated the industry is estimated to incur a capex of at least Rs 20,000-25,000 crore in FY2025, with incremental investments being towards new product additions, product development for committed platforms, and development of advanced technology.

It added the capex would also go into EV components, capacity enhancements and upcoming regulatory changes. Besides, it said factors like rising supplies to new platforms because of vendor diversification initiatives by global original equipment manufacturers (OEMs), higher value addition and aftermarket demand potential in overseas markets, with the ageing of vehicles augur well for Indian auto component suppliers.

The CNX Nifty is currently trading at 21608.70, down by 134.55 points or 0.62% after trading in a range of 21530.20 and 21632.50. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Coal India up by 1.60%, BPCL up by 1.33%, Adani Enterprises up by 0.81%, Bajaj Auto up by 0.68% and Apollo Hospital up by 0.54%. On the flip side, Infosys down by 2.58%, Tech Mahindra down by 2.52%, Sun Pharma down by 1.72%, Cipla down by 1.71% and Wipro down by 1.68% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 213.52 points or 0.56% to 37,750.45, Straits Times fell 13.07 points or 0.42% to 3,128.80 and KOSPI dropped 26.05 points or 0.98% to 2,623.59.

On the flip side, Hang Seng advanced 23.37 points or 0.15% to 15,769.95.