Benchmarks surrender early gains to end lower on Tuesday

Indian equity benchmarks surrendered early gains and ended lower for the third straight session on Tuesday, dragged by a decline in PSU, Telecom and Consumer Durables stocks amid global uncertainties which has led to profit booking. Markets started the day on an upbeat note and stayed in green for most part of the day, buoyed by a rebound in Asian markets. Traders took encouragement as a private report stated that India's economy is expected to grow at 7-7.2 per cent in the current fiscal year driven by robust economic fundamentals and continuity in domestic policy reforms. Sentiments remained up-beat as think tank GTRI stated that reforms in certain customs and banking rules, access to credit, and incentives at par with China will be key for India to boost its exports through e-commerce medium to $350 billion by 2030. 

However, in the late afternoon deals, selling pressure intensified and the indices wiped off all their gains to end the session with losses. Traders turned cautious with reports that the finance ministry has intensified its monitoring of the West Asian conflict following last week's assassination of the Hamas chief in Iran, an act attributed to Israel, which has raised fears of a broader regional escalation. This conflict could impact global oil prices, capital flows, currency movements, and shipping costs. Despite these concerns, the conflict is unlikely to pose any major risk yet, with India's robust macroeconomic fundamentals expected to help it withstand any potential crisis without significant damage. Besides, the exchange data showed Foreign Institutional Investors (FIIs) offloaded equities worth Rs 10,073.75 crore on Monday.   

On the global front, European markets were trading mostly in green even as Eurostat reported that Eurozone's retail sales dropped at an annual rate of 0.3 percent in June after increasing by 0.5 percent in May. Asian markets settled mostly higher on Tuesday after a brutal global sell-off the day before on heightened Middle East tensions, an unwinding of yen carry trades, lukewarm tech earnings, and concerns about slowing U.S. economic growth. 

Back home, port sector stocks were in focus as the data released by major ports' apex body Indian Ports Association showed that cargo traffic at 12 major ports in the country grew 5.92 per cent to 70.08 million tonnes (MT) in July from 66.17 MT handled in the year-ago period. The data also showed that 10 of these major ports logged positive growth in cargo traffic handling, while the remaining two saw a negative growth. There were some reactions in edible oil industry stocks with a private report that the country is aiming to increase domestic palm oil production from the current level of 0.4 million tonne (MT) to 2.5 MT by 2032 under the national oil palm mission through adding at least 0.1 million hectare (MH) of new plantation annually in the five to six years. 

Finally, the BSE Sensex fell 166.33 points or 0.21% to 78,593.07, and the CNX Nifty was down by 63.05 points or 0.26% points to 23,992.55.  

The BSE Sensex touched high and low of 79,852.08 and 78,496.57 respectively. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.80%, while Small cap index was down by 0.59%.

The few gaining sectoral indices on the BSE were Realty up by 0.70%, IT up by 0.25% and FMCG up by 0.16%, while PSU down by 1.35%, Telecom down by 1.19%, Consumer Durables down by 0.99%, Oil & Gas down by 0.79% and Bankex down by 0.76% were the top losing indices on BSE.

The top gainers on the Sensex were JSW Steel up by 2.32%, Tech Mahindra up by 1.63%, Larsen & Toubro up by 1.62%, Hindustan Unilever up by 1.55% and HCL Technology up by 1.40%. On the flip side, Bharti Airtel down by 1.44%, Mahindra & Mahindra down by 1.32%, SBI down by 1.28%, HDFC Bank down by 0.75% and Titan Company down by 0.72% were the top losers.

Meanwhile, the Global Trade Research Initiative (GTRI) has said that reforms in certain customs and banking rules, access to credit, and incentives at par with China will be key for India to boost its exports through e-commerce medium to $350 billion by 2030. It also suggested creation of separate regulations and ecosystems to support two different types of e-commerce exports - direct export and overseas warehouse models; supporting firm to open warehouses in key foreign cities; export incentives at par with physical shipments; marketing support; and creation of regional hubs for MSMEs. 

GTRI said the global cross-border e-commerce exports are projected to grow from $1 trillion in 2023 to $8 trillion by 2030 on account of the ability of online firms to deliver overseas products to consumers within 1-2 days, matching the speed and convenience of local supplies. India's e-commerce exports could grow from $5 billion to $350 billion by 2030, thanks to strengths in customized products, traditional crafts, and a growing base of over 100,000 sellers. At present, the domestic sector is facing different issues and as successful e-commerce policies in China, Korea, Japan, and Vietnam have helped many firms sell globally, India too needs to publish an e-commerce export policy and these steps.  

It said that Indian regulations primarily cater to the direct export model, and separate regulations need to be introduced for meeting the needs of the warehouse model which has several benefits such as over 50 per cent savings in freight, no customs delays, and faster delivery. Warehouses can be established by the government, private sector, or e-commerce firms and efficient warehouse management including using foreign warehouses will immediately boost India's e-commerce exports. Currently, over 60 per cent of China's global cross-border e-commerce exports use overseas warehouses.

The CNX Nifty traded in a range of 24,382.60 and 23,960.40. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Britannia Industries up by 2.81%, JSW Steel up by 2.35%, Tech Mahindra up by 1.74%, Larsen & Toubro up by 1.70% and Hindustan Unilever up by 1.54%. On the flip side, HDFC Life Insurance down by 4.28%, SBI Life Insurance down by 2.43%, BPCL down by 1.84%, Shriram Finance down by 1.71% and SBI down by 1.47% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 increased 10.67 points or 0.13% to 8,018.90 and Germany’s DAX gained 22.21 points or 0.13% to 17,361.21, while France’s CAC fell 13.34 points or 0.19% to 7,135.65.

Asian markets settled mostly higher on Tuesday after a day of brutal sell-off around the world over concerns about a potential US recession. Japan's Nikkei 225 jumped following the index's biggest one-day decline since October 1997, while the Japanese yen retreated modestly after a strong rally in recent days. Chinese shares gained ahead of a string of economic data. July’s Chinese trade figures are set to be released on Wednesday, and inflation data is due to be released on Friday.