Domestic indices extend opening losses in early deals amid foreign fund outflows

Indian equity benchmarks made slightly negative start on Monday, tracking mixed cues from Asian counterparts as well as following the mixed cues from Wall Street overnight on Friday, on ongoing concerns over the tensions in the middle-east with reports of Israel retaliating to last weekend's attacks. Interest rates continued to weigh on markets as the US Fed is now widely expected to hold off on cutting rates until at least July. Domestic indices -- Sensex and Nifty – soon enlarged their losses and are trading with cut of around 0.75% each in early deals amid sustained foreign fund outflows. Indian markets have witnessed aggressive selling by Foreign Portfolio Investors (FPIs) in May, with a staggering amount of Rs 17,082 crores as per data by National Securities Depository.

Weak macro-economic data also added to the cautiousness on Dalal Street. The government data showed that India’s industrial production growth slowed marginally to 4.9 per cent month-on-month in March 2024, mainly due to poor show by the mining sector. The factory output growth, measured in terms of the Index of Industrial Production (IIP), was 5.6 per cent in February 2024. Meanwhile, investors are eyeing India’s retail inflation data to be out later in the day for more directional cues. Also, markets will track the fourth phase of the voting, going on today. 

On the sectoral front, coal industry stocks are in focus with a private report that India's coal import rose by 7.7 per cent to 268.24 million tonne (MT) in FY24 driven by softness in seaborne prices and likelihood of increase in power demand during summer. The country's coal import was 249.06 MT in FY23. Moreover, shares of Indegene will debut on the stock markets.

The BSE Sensex is currently trading at 72072.32, down by 592.15 points or 0.81% after trading in a range of 71950.69 and 72603.18. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.28%, while Small cap index was down by 1.38%.

The sole gaining sectoral index on the BSE was Healthcare up by 0.14%, while Auto down by 2.14%, Metal down by 1.93%, PSU down by 1.91%, Utilities down by 1.88% and Energy down by 1.62% were the top losing indices on BSE.

The few gainers on the Sensex were Asian Paints up by 0.84%, Sun Pharma up by 0.48% and TCS up by 0.03%. On the flip side, Tata Motors down by 7.51%, JSW Steel down by 1.93%, SBI down by 1.90%, Tata Steel down by 1.88% and NTPC down by 1.84% were the top losers.

Meanwhile, citing several macroeconomic parameters that are doing pretty well, India’s G20 Sherpa and former CEO of Niti Aayog Amitabh Kant has projected that the country is all set to overtake Japan as 4th largest economy in the world by 2025. The size of India’s GDP is currently ranked 5th, after the US, China, Germany, and Japan. It overtook the UK in 2022.

Just a decade ago, Indian GDP was the eleventh largest in the world. Currently, India’s GDP is estimated to be around $3.7 trillion. Some highlights of India’s journey to the top 5 economies of the world in 2024 from Fragile 5 in 2013, according to Kant, among others, record GST collection, over 8 per cent GDP growth in the past three quarters, trading in Indian currency Rupee with various countries (to be precise 27), inflation at manageable levels.

The term Fragile 5 was coined by a Morgan Stanley analyst in 2013 and refers to a set of five emerging countries, including India, whose economy was not doing well back then. The other four countries were Brazil, Indonesia, South Africa, and Turkey. Double-digit growth in the steel, cement, and automobile manufacturing sectors; global leader in digital public infrastructure, with e-transactions surging to 134 billion, accounting for 46 per cent of all global digital payments; accounts opened under Jan Dhan, Aadhaar and Mobile trinity have over Rs 2.32 lakh crore as current balance; average annual inflation between 2013-14 and 2022-23 declined to 5 per cent from 8.2 per cent between 2003-04 and 2013-14 are some other things he attributed to India’s firm growth.

The CNX Nifty is currently trading at 21895.70, down by 159.50 points or 0.72% after trading in a range of 21851.60 and 22067.30. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Cipla up by 4.76%, HDFC Life Insurance up by 2.50%, Eicher Motors up by 0.89%, Asian Paints up by 0.60% and Sun Pharma up by 0.60%. On the flip side, Tata Motors down by 7.38%, BPCL down by 2.72%, Coal India down by 2.18%, JSW Steel down by 2.16% and ONGC down by 2.11% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 134.61 points or 0.35% to 38,094.50, KOSPI lost 13.58 points or 0.50% to 2,714.05, Jakarta Composite fell 6.07 points or 0.09% to 7,082.73 and Shanghai Composite was down by 2.61 points or 0.08% to 3,151.94. on the other hand, Taiwan Weighted rose 175.42 points or 0.85% to 20,884.26, Hang Seng gained 86.25 points or 0.45% to 19,049.93 and Straits Times was up by6.76 points or 0.21% to 3,297.46.