Domestic equity markets continue to trade in red in late morning deals

Domestic equity markets continued to trade in red in late morning deals tracking weak cues from the global markets. Selling in Bajaj Finserv, Bajaj Finance, ICICI Bank, SBI and Axis Bank weighed on the markets. Government’s decision in the Union Budget to raise tax on gains from equity investments has dented investor sentiments. Additionally, foreign fund outflows further dampened sentiment in the domestic markets. Foreign institutional investors (FIIs) were net sellers on July 23 as they sold equities worth Rs 2975 crore. Traders overlooked report that Ajay Seth, Secretary at Department of Economic Affairs under Ministry of Finance has said fiscal consolidation by way of gliding down on fiscal deficit path is being done while meeting all essential expenditure. The fiscal deficit target for 2024-25 is pegged at 4.9 per cent, better than what was estimated in the Interim Budget. On the sectoral front, traders were seen pilling up positions in Utilities, Energy, Oil & Gas, Realty and Power, while selling was witnessed Bankex, Auto and FMCG. 

On the global front, Asian markets were trading in red as traders assessed July business activity data from Japan and Australia, and tech earnings from the U.S. Back home, in the stock specific development, Bajaj Finance declined despite reporting a 14 percent increase in its Q1 net profit.

The BSE Sensex is currently trading at 80130.36, down by 298.68 points or 0.37% after trading in a range of 80087.29 and 80519.58. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index up by 1.50%.

The top gaining sectoral indices on the BSE were Utilities up by 1.54%, Energy up by 1.48%, Oil & Gas up by 1.33%, Realty up by 1.10% and Power up by 1.07%, while Bankex down by 1.42%, Auto down by 0.36% and FMCG down by 0.08% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.51%, Tech Mahindra up by 2.02%, NTPC up by 1.65%, Power Grid up by 0.94% and ITC up by 0.90%. On the flip side, Bajaj Finance down by 2.47%, Bajaj Finserv down by 2.04%, Axis Bank down by 2.02%, SBI down by 1.56% and ICICI Bank down by 1.51% were the top losers.

Meanwhile, Karun Rishi, president of USA India Chamber of Commerce has said that the future ready budget presented by Union Finance Minister Nirmala Sitharaman aims to realize the vision of Viksit Bharat by raising spending to generate more jobs and spur economic growth. The finance minister has maintained fiscal discipline, with a commendable reduction in the fiscal deficit target to 4.9% of GDP for FY25, down from the 5.1% target in the interim budget. Fiscal discipline is crucial for sustainable economic growth and maintaining investor confidence. The budget focuses on micro, small, and medium enterprises (MSMEs) to drive growth through job creation. For a country like India with a large population, MSMEs can be an engine of growth. This approach is expected to enhance the contribution of MSMEs to the economy and employment generation.

According to president, the budget sets the economy on a long-term growth path through upskilling and easing unemployment. He said skilled and employable manpower is essential for industrialization, and the government aims to leverage the power of both the private and public sectors to achieve this. The abolition of the angel tax is a landmark decision for the start-up ecosystem in India. This was a much-needed course correction. This bold step will foster a more vibrant start-up ecosystem in India, leading to increased innovation, employment generation and competitiveness. 

He further said the government signaled policy continuity and focus on the infrastructure sector by continuing to allocate 3.4% of GDP. The spending plan was unchanged from the interim budget presented in February before the national elections. The government has doubled spending on infrastructure over the past three years as a way to boost the economy. As a percentage of GDP, capital expenditure has risen from 1.7% in 2019-20 to 3.4% in the current year. This investment is expected to generate demand across various sectors and create much needed jobs, providing a strong multiplier effect on the economy. 

The CNX Nifty is currently trading at 24408.30, down by 70.75 points or 0.29% after trading in a range of 24373.45 and 24504.25. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were SBI Life up by 3.20%, HDFC Life up by 2.76%, ONGC up by 2.36%, Tata Motors up by 2.33% and BPCL up by 2.12%. On the flip side, Bajaj Finance down by 2.44%, Tata Consumer down by 2.23%, Bajaj Finserv down by 2.21%, Axis Bank down by 2.10% and Nestle down by 1.54% were the top losers.

All Asian markets were trading lower; Hang Seng declined 113.18 points or 0.65% to 17,356.18, Jakarta Composite plunged 25.98 points or 0.36% to 7,287.88, Shanghai Composite weakened 5.69 points or 0.2% to 2,909.68, Straits Times fell 2.13 points or 0.06% to 3,459.03, KOSPI dropped 9.88 points or 0.36% to 2,764.41 and Nikkei 225 slipped 452.51 points or 1.14% to 39,141.88.