Domestic indices trade lower in early deals; IT, TECK led losers

Indian equity benchmarks made gap-down opening on Wednesday tracking sell-off on the Wall Street overnight as well as weakness in Asian counterparts as concerns about global economic growth and uncertainty about the pace of U.S. interest rate cuts weighed on the markets. Traders reacted to data that showed a continued decline in U.S. manufacturing activity in August, which led to renewed concerns about the economic outlook. Meanwhile, the services sector in Japan continued to expand in August, and at a steady pace, the latest survey from Jibun Bank revealed with a services PMI score of 53.7.

Closer home, domestic indices are trading lower with cut of over half a percent each in early deals led by losses in IT, TECK and Metal. Sensex and Nifty are trading below their crucial psychological levels of 82,000 and 25,100, respectively. Traders overlooked the government data showing that foreign direct investment in India jumped 47.8 per cent to $16.17 billion in April-June this fiscal on healthy inflows in services, computer, telecom and pharma sectors. FDI inflows were at $10.94 billion in April-June 2023-24. 

On the sectoral front, banking stocks are in focus with the latest data by the Reserve Bank of India (RBI) showing that the liquidity in the banking system improved to a one-month high surplus of Rs 2.23 trillion on Monday. This came about on the back of government spending. In stock specific development, Atlantaa hits 52-week high after the company announced that it has received Commencement Certificate for its project, Atlanta Enclave Phase 11, from Thane Municipal Corporation.

The BSE Sensex is currently trading at 81984.18, down by 571.26 points or 0.69% after trading in a range of 81833.69 and 82097.06. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.26%, while Small cap index was up by 0.38%.

The sole gaining sectoral index on the BSE was Healthcare up by 0.21%, while IT down by 1.33%, TECK down by 1.17%, Metal down by 1.00%, Bankex down by 0.93% and Power down by 0.75% were the top losing indices on BSE.

The only gainers on the Sensex were Asian Paints up by 2.41% and Hindustan Unilever up by 0.40%. On the flip side, Infosys down by 1.66%, Mahindra & Mahindra down by 1.38%, Tech Mahindra down by 1.24%, Larsen & Toubro down by 1.19% and TCS down by 1.16% were the top losers.

Meanwhile, the government data has showed that foreign direct investment (FDI) equity inflow in India jumped 47.8 per cent to $16.17 billion in April-June this fiscal (FY25) on healthy inflows in services, computer, telecom and pharma sectors. FDI inflows were at $10.94 billion in April-June 2023-24. The data showed that overseas inflows in May rose to $5.85 billion and in June to $5.41 billion from $2.67 billion and $3.16 billion, respectively, in the year-ago period. In April, FDI inflows were down marginally at $4.91 billion against $5.1 billion in April 2023.

The Department for Promotion of Industry and Internal Trade (DPIIT) data showed total FDI, which includes equity inflows, reinvested earnings and other capital, grew by 28 per cent to $22.49 billion during the first quarter of this fiscal from $17.56 billion in April-June 2023-24. During the period, FDI equity inflows rose from major countries, including Mauritius, Singapore, the US, the Netherlands, the UAE, Cayman Islands and Cyprus. However, inflows declined from Japan, the UK, and Germany.

Sectorally, inflows rose in services, computer software and hardware, telecommunication, pharma and chemicals. The data also showed that Maharashtra received the highest inflow of $8.48 billion during the first quarter of this last fiscal. It was followed by Karnataka ($2.28 billion), Telangana ($1.08 billion) and Gujarat ($1.02 billion). FDI inflows declined in Delhi and Rajasthan compared to the year-ago period.

The CNX Nifty is currently trading at 25095.30, down by 184.55 points or 0.73% after trading in a range of 25083.80 and 25133.10. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.29%, BPCL up by 1.79%, Hero MotoCorp up by 0.36%, Hindustan Unilever up by 0.35% and Grasim Industries up by 0.26%. On the flip side, LTIMindtree down by 2.28%, ONGC down by 2.00%, Coal India down by 1.97%, Wipro down by 1.86% and Infosys down by 1.78% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 1361.91 points or 3.52% to 37,324.40, Taiwan Weighted lost 874.98 points or 3.96% to 21,217.23, Hang Seng declined 187.87 points or 1.06% to 17,463.62, KOSPI dropped 74.04 points or 2.78% to 2,590.59, Straits Times fell 50.98 points or 1.46% to 3,429.36 and Shanghai Composite weakened 13.59 points or 0.49% to 2,789.39, while Jakarta Composite was up by 37.93 points or 0.5% to 7,654.45.