Benchmarks add some losses in morning deals

Indian equity benchmarks added some losses in morning deals, dragged by Banking, TECK and FMCG stocks amid a largely muted trend in Asia. Traders remained cautious as Ministry of Finance has warned the ongoing crisis along the Red Sea shipping route poses a risk to 80 percent of India’s goods trade with Europe and could lead to higher inflation and lower growth in India due to rising transport costs. Traders overlooked report that S&P Global Ratings has raised India's Gross domestic product (GDP) growth forecast for the next financial year (FY25) to 6.8 per cent, but flagged restrictive interest rates as a dampener for economic growth. In November 2023, it had projected India's growth to be 6.4 per cent in FY25 on robust domestic momentum. It said the Indian economy is estimated to have clocked a growth of 7.6 per cent in the current fiscal (FY24). 

On the global front, Asian markets were trading mostly in red following the broadly negative cues from Wall Street, as traders seemed reluctant to make more significant moves ahead of the release of some key economic data in the coming days, including US inflation numbers on Friday.

The BSE Sensex is currently trading at 72513.74, down by 318.20 points or 0.44% after trading in a range of 72363.03 and 72705.29. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.05%, while Small cap index was down by 0.19%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.61%, Oil & Gas up by 0.44%, Industrials up by 0.42%, Energy up by 0.41% and PSU up by 0.26%, while, Bankex down by 0.55%, TECK down by 0.46%, FMCG down by 0.38%, IT down by 0.37% and Healthcare down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.17%, Bajaj Finserv up by 1.43%, Tata Motors up by 1.13%, Larsen & Toubro up by 0.65% and HCL Technologies up by 0.64%. On the flip side, Power Grid Corporation down by 2.01%, Maruti Suzuki down by 1.35%, Wipro down by 0.95%, Ultratech Cement down by 0.93% and Bharti Airtel down by 0.93% were the top losers.

Meanwhile, an analysis by Care Edge Ratings has said that the demand for vehicles powered by traditional fuels is progressively shifting towards those that utilise alternative fuels. The share of petrol vehicle sales, as a percentage of total vehicle sales, has recorded a significant decline, decreasing from 86 percent in 2020 to 76 percent in 2023 while for diesel vehicles it has slightly decreased from 12 percent in 2020 to 11 percent in 2023.

It stated the sales volume of alternative fuel-driven vehicles recorded a growth of more than 400% in Calendar Year (CY) 2023 as compared to CY2020, though on a much smaller base. At present, EVs offer the lowest lifetime cost, followed by CNG. Demand for EVs is booming, driven by government incentives, reducing battery costs, and rising fuel costs, especially petrol and diesel. India aims for 30 percent of all vehicle sales to be electric by 2030.

To encourage the growth of charging stations, the Indian government has launched several schemes to incentivize the development of alternative fuel infrastructure, such as subsidies and grants. While EVs have a higher upfront cost, their lower fuel and maintenance expenses, coupled with government incentives, make them relatively more cost-competitive compared with petrol and diesel vehicles in the long run, especially for high-mileage drivers.

The recent announcement of enhanced allocation of FAME-II by Rs 1,500 crore is a positive step towards encouraging EV adoption in India. The enhanced allocation and strategic focus of FAME-II are expected to accelerate EV adoption in India by March 2024 to encourage potential buyers to take advantage before it exhausts. Arti Roy, Associate Director, CareEdge Ratings said ‘Overall, the Indian automobile market is at a crossroads, with EVs and CNG emerging as strong contenders to challenge the traditional dominance of petrol and diesel fuel-driven vehicles. The future will depend on factors like government policies, technological advancements, and consumer preferences.’

The CNX Nifty is currently trading at 22018.05, down by 78.70 points or 0.36% after trading in a range of 21947.55 and 22073.20. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 2.21%, Coal India up by 1.68%, Adani Ports & SEZ up by 1.47%, Bajaj Finserv up by 1.43% and Tata Motors up by 1.05%. On the flip side, Power Grid Corporation down by 2.03%, Tata Consumer Product down by 1.39%, Maruti Suzuki down by 1.36%, Divi's Lab down by 1.30% and SBI Life Insurance down by 1.10% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 51.16 points or 0.13% to 40,362.96, Taiwan Weighted lost 25.74 points or 0.13% to 20,166.51, Hang Seng declined 12.53 points or 0.08% to 16,461.11, Jakarta Composite plunged 21.94 points or 0.3% to 7,355.82 and Shanghai Composite weakened 11.41 points or 0.38% to 3,014.90.

On the flip side, Straits Times rose 27.05 points or 0.85% to 3,225.15 and KOSPI increased 20.00 points or 0.73% to 2,757.57.