Benchmarks continue to trade lower in morning deals

Indian equity benchmarks continued to trade lower in morning deals, mirroring weak cues from global markets. Investors remained cautious ahead of the India’s Consumer Price Index (CPI) inflation and Index of Industrial Production (IIP) data to be out later in the week. However, losses were limited as traders took some support with data from the Reserve Bank of India (RBI) showing that foreign exchange reserves rose $6.6 billion to a two-year high of $625.6 billion in the week ended March 1. In the previous week, reserves had risen $3 billion to $619.1 billion. Traders took note of a report that India and the European Free Trade Association (EFTA) signed a landmark trade and economic partnership agreement (TEPA) to open up the EFTA markets for Indian businesses and the Indian markets for the EFTA. As part of the deal, the EFTA countries have committed to invest $100 billion in India over the next 15 years. On the global front, Asian markets are trading mostly in red as investors digest mixed U.S. jobs data and look ahead to the release of upcoming U.S. inflation data this week for cues on the timing and pace of interest-rate cuts. 

The BSE Sensex is currently trading at 73947.97, down by 171.42 points or 0.23% after trading in a range of 73844.08 and 74187.35. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.41%, while Small cap index was down by 0.86%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.60%, Oil & Gas up by 0.32%, FMCG up by 0.26%, Energy up by 0.23% and Realty up by 0.22%, while Telecom down by 0.65%, IT down by 0.65%, TECK down by 0.40%, Auto down by 0.35% and Bankex down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 1.93%, Bajaj Finserv up by 1.23%, ITC up by 0.80%, Sun Pharma Inds. up by 0.79% and Axis Bank up by 0.59%. On the flip side, Tata Steel down by 1.75%, Infosys down by 1.19%, Power Grid Corporation down by 1.16%, HDFC Bank down by 0.99% and Kotak Mahindra Bank down by 0.98% were the top losers.

Meanwhile, Icra in its latest report has said that India's domestic steel consumption growth is likely to come down to 7-8 per cent in the next financial year (FY25) against an estimated 12-13 per cent this fiscal (FY24) due to moderate government spending during the election period. It stated elevated input costs, import pressures, along with softer steel prices are expected to sequentially pull down the steel industry's operating profit margins by 110-115 basis points in FY2025. 

It said the domestic steel consumption could decelerate to 7-8 per cent in FY 2024-25 after three back-to-back years of double-digit growth. As per report, the demand in the ongoing 2023-24 fiscal is estimated to be in the range of 12-13 per cent while the growth of demand was 14.5 per cent in 2022-23 financial year, and 13.3 per cent in the preceding year.

Jayanta Roy, Senior Vice-President & Group Head, Corporate Sector Ratings, Icra said in the six-month period between June and November of 2023, as the government accelerated infrastructure spending ahead of the union elections, domestic steel demand grew at a brisk pace of around 16 per cent over the same period of last fiscal. However, the prints for December 2023 and January 2024 reveal a marked slowdown in consumption growth. He said while these are early trends, these numbers nonetheless hint at demand remaining soft over the next two quarters as the government spending moderates around the election period.

The CNX Nifty is currently trading at 22455.50, down by 38.05 points or 0.17% after trading in a range of 22424.20 and 22526.60. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.26%, Nestle up by 1.72%, Britannia Industries up by 1.30%, Bajaj Finserv up by 1.21% and Adani Ports &SEZ up by 1.09%. On the flip side, Tata Consumer Product down by 3.02%, Tata Steel down by 1.81%, Bajaj Auto down by 1.77%, Power Grid Corporation down by 1.25% and Infosys down by 1.15% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 1143.71 points or 2.88% to 38,545.23, Taiwan Weighted lost 124.21 points or 0.63% to 19,661.11, Straits Times fell 6.09 points or 0.19% to 3,141.00 and KOSPI dropped 14.52 points or 0.54% to 2,665.83.

On the flip side, Hang Seng advanced 209.59 points or 1.27% to 16,562.98 and Shanghai Composite strengthened 6.26 points or 0.21% to 3,052.28.