Markets trade with cut of over half percent in late morning deals

Domestic equity indices remained in red and were trading lower with cut of over half a percent in late morning deals on account of selling by funds and retail investors. Hectic selling in Indusind Bank, Titan, Bharti Airtel, Bajaj Finance and Power Grid dragged the markets lower. Traders were cautious after minutes from the Federal Reserve's January 30-31 meeting revealed most officials remain wary of cutting interest rates too quickly, fearing progress on inflation could stall out. Besides, sentiments were also weak as a research report by CRISIL Market Intelligence and Analytics showed that financial conditions have tightened the economy with liquidity going into a deeper deficit putting upward pressure on short-term rates.

On the global front, Asian markets were trading mostly in green following mostly positive cues from the US markets overnight. Japan’s Nikkei 225 hit a record high, powered by banking, electronics and consumer stocks as robust earnings and investor-friendly measures fuel a blistering rally in Japanese equities this year. Back home, traders were seen pilling up position in IT, Capital Goods, Metal, Realty and TECK, while selling was witnessed in Oil & Gas, Consumer Durables, Bankex, PSU and Energy. 

The BSE Sensex is currently trading at 72210.72, down by 412.37 points or 0.57% after trading in a range of 72081.36 and 72724.53. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.05%, while Small cap index down by 0.04%.

The top gaining sectoral indices on the BSE were IT up by 0.49%, Capital Goods up by 0.28%, Metal up by 0.26%, Realty up by 0.21% and TECK up by 0.18%, while Oil & Gas down by 1.24%, Consumer Durables down by 1.20%, Bankex down by 0.90%, PSU down by 0.75% and Energy down by 0.71% were the top losing indices on BSE.

The top gainers on the Sensex were HCL up by 1.91%, Axis Bank up by 0.77%, ITC up by 0.77%, TCS up by 0.69% and Tech Mahindra up by 0.67%. On the flip side, Indusind Bank down by 2.40%, Titan down by 2.29%, Bharti Airtel down by 1.96%, Bajaj Finance down by 1.69% and Power Grid Corp down by 1.62% were the top losers.

Meanwhile, CRISIL Market Intelligence and Analytics in its latest research report has said that financial conditions have tightened the economy with liquidity going into a deeper deficit putting upward pressure on short-term rates. It also said that foreign portfolio investors turned net sellers further aggravating the tight liquidity conditions.

It stated with tightening of the liquidity, the transmission of interest rates improved across lending and deposit rates in January. However, the cumulative rise in most deposit and lending rates remained lower than the 250 basis points of repo rate increase by the Reserve Bank of India (RBI) since May 2022.

This incomplete transmission of monetary policy prompted the Reserve Bank of India to keep the interest rates unchanged. According to the report, the deficit in domestic systemic liquidity almost doubled in January compared with December. This has led to a net infusion of Rs 2.07 lakh crore into the system, which is one per cent of net demand and time liabilities (NDTL) by the RBI. It said that liquidity has been in deficit in the economy since September 2023. Besides, it said due to a crunch in liquidity, money market rates are under pressure with the call money rate hovering above 6.75 per cent.

The CNX Nifty is currently trading at 21910.20, down by 144.85 points or 0.66% after trading in a range of 21875.25 and 22094.30. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were HCL up by 1.95%, Eicher Motors up by 1.66%, Hindalco up by 0.93%, ITC up by 0.78% and Tech Mahindra up by 0.78%. On the flip side, Grasim Industries down by 3.23%, BPCL down by 3.01%, Indusind Bank down by 2.79%, Titan down by 2.43% and SBI Life down by 1.95% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 140.48 points or 0.84% to 16,643.58, Nikkei 225 surged 856.75 points or 2.19% to 39,118.91, Taiwan Weighted added 176.47 points or 0.94% to 18,852.78, KOSPI increased 10.49 points or 0.39% to 2,663.80 and Shanghai Composite strengthened 26.45 points or 0.89% to 2,977.41. However, Jakarta Composite plunged 1.23 points or 0.02% to 7,347.79 and Straits Times fell 7.24 points or 0.23% to 3,209.87.