Weak trade continues over Dalal Street

A weak trade continued over the Dalal Street in early afternoon deals, with both Sensex and Nifty trading lower, on the back of mixed cues from other Asian markets along with selling at Realty and Banking counters. Sentiments were negative, amid a private report stating that Reserve Bank of India's (RBI) decision to keep the repo rate unchanged and change the policy stance to neutral indicates that inflation is still the main concern for the central bank. However, losses were limited, as traders got some relief, after the Union Government has released tax devolution of Rs 1,78,173 crore to State Governments on October 10, 2024, as against the normal monthly devolution of Rs 89,086.50 crore, in view of the upcoming festive season and to enable States to accelerate capital spending, and also finance their development/ welfare related expenditure.

On the global front, Asian markets were trading mixed, after Malaysia's industrial output growth moderated for the first time in three months in August. The figures from the Department of Statistics showed that industrial production climbed 4.1 percent yearly in August, slower than the 5.3 percent surge in the previous month. Among sectors, the annual growth in manufacturing production eased to 6.5 percent from 7.7 percent. Similarly, electricity production grew at a slower pace of 4.1 percent versus 7.0 percent increase in July. 

The BSE Sensex is currently trading at 81408.24, down by 203.17 points or 0.25% after trading in a range of 81334.51 and 81671.38. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.16%, while Small cap index was up by 0.28%.

The top gaining sectoral indices on the BSE were Metal up by 1.45%, Healthcare up by 0.58%, Basic Materials up by 0.48%, Oil & Gas up by 0.43% and Energy up by 0.39%, while Realty down by 0.90%, Bankex down by 0.64%, Utilities down by 0.46%, Auto down by 0.43% and Power down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 1.25%, Tata Steel up by 1.19%, Sun Pharma up by 1.11%, Tech Mahindra up by 1.09% and JSW Steel up by 0.93%. On the flip side, TCS down by 2.51%, Mahindra & Mahindra down by 1.58%, ICICI Bank down by 1.46%, Axis Bank down by 0.91% and Power Grid down by 0.85% were the top losers.

Meanwhile, the World Trade Organisation (WTO) has slightly raised its outlook for global goods trade for the year 2024, but cautioned that increasing geopolitical tensions and uncertainty over economy policy pose ‘substantial’ risks to its forecast. It projected that global goods trade will increase by 2.7 per cent this year, compared with the 2.6 per cent it forecast in April. But it predicted growth of 3 per cent next year, down from the 3.3 per cent it forecast previously. Last year, the volume of world merchandise trade was down 1.1 per cent, pushed lower by high inflation and rising interest rates.

The global trade body cautioned that rising geopolitical tensions and increased economic policy uncertainty continue to pose substantial downside risks to the forecast. Still, it pointed to a 2.3 per cent year-on-year increase in global merchandise trade in this year's first six months and noted that inflation had fallen far enough by mid-year for central banks to start cutting interest rates.

WTO Director-General Ngozi Okonjo-Iweala said ‘we are expecting a gradual recovery in global trade for 2024, but we remain vigilant of potential setbacks, particularly the potential escalation of regional conflicts like those in the Middle East’. He said the impact could be most severe for the countries directly involved, but they may also indirectly affect global energy costs and shipping routes. The WTO said there is ‘some limited upside potential’ to its forecast if interest rate cuts in advanced economies fuel stronger-than-expected growth without reigniting inflation. 

The CNX Nifty is currently trading at 24961.75, down by 36.70 points or 0.15% after trading in a range of 24920.05 and 25028.65. There were 25 stocks advancing against 23 stocks declining, while 2 stocks remained unchanged on the index.

The top gainers on Nifty were Hindalco up by 2.51%, HCL Technologies up by 1.50%, Trent up by 1.47%, Tech Mahindra up by 1.36% and Eicher Motors up by 1.20%. On the flip side, TCS down by 2.33%, Mahindra & Mahindra down by 1.71%, Cipla down by 1.43%, ICICI Bank down by 1.41% and Adani Enterprises down by 1.11% were the top losers.

Asian markets were trading mixed; Taiwan Weighted jumped 242.56 points or 1.06% to 22,901.64, Nikkei 225 surged 224.91 points or 0.57% to 39,605.80, Jakarta Composite was up by 44.34 points or 0.59% to 7,524.42. On the other hand, Shanghai Composite weakened 94.93 points or 2.87% to 3,207.00, KOSPI fell 2.25 points or 0.09% to 2,596.91 and Straits Times was down by 0.77 points or 0.02% to 3,584.52.