Key gauges slip into red terrain in morning deals

Indian equity benchmarks erased their initial gains and slipped into red terrain in morning deals, tracking weak cues from global markets. Traders turned cautious as exchange data showed foreign institutional investors (FIIs) offloaded equities worth Rs 2,261.83 crore on October 21. Meanwhile, the Reserve Bank of India's article on 'State of the Economy' published in the October Bulletin stated that India's growth outlook is supported by robust domestic engines and private investment showing some encouraging signs despite geopolitical tensions. It said the global economy remained resilient in the first half of 2024, with declining inflation supporting household spending. 

On the global front, Asian markets were trading mostly in red following the mixed cues from Wall Street overnight, as bond yields surged on cooling expectations on US Fed interest rate cuts. Traders also booked some profits after the recent surge in the markets. The uncertainty over wars in the Middle East and Europe as well as the U.S. presidential election weighed on market sentiment. 

The BSE Sensex is currently trading at 80912.57, down by 238.70 points or 0.29% after trading in a range of 80727.85 and 81504.24. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.24%, while Small cap index was down by 2.30%.

The top losing sectoral indices on the BSE were Realty down by 2.80%, Industrials down by 2.15%, Capital Goods down by 1.89%, PSU down by 1.71% and Metal down by 1.48%, while there were no gaining sectoral indices on the BSE. 

The top gainers on the Sensex were ICICI Bank up by 1.56%, Nestle up by 0.87%, Tech Mahindra up by 0.52%, Hindustan Unilever up by 0.43% and Infosys up by 0.35%. On the flip side, Tata Motors down by 2.11%, Maruti Suzuki down by 2.03%, Tata Steel down by 1.87%, Mahindra & Mahindra down by 1.79% and Larsen & Toubro down by 1.56% were the top losers.

Meanwhile, Ratings agency ICRA has said that Indian apparel exporters are expected to register a 9-11 per cent revenue expansion in current fiscal (FY25) aided primarily by gradual liquidation of retail inventory in key end markets and a shift in global sourcing to India. With the revival in demand, it expects the capex spending to increase in FY25 and FY26 and may stay in the range of 5-8 per cent of the turnover.

Further, it stated that the long-term prospects for Indian apparel exports are favourable, aided by enhanced product acceptance in end markets, evolving consumer trends and a boost from the government in the form of the production-linked incentive (PLI) scheme, export incentives, the proposed free trade agreement with the UK and the EU, among others.

It added that the expected growth this fiscal follows a tepid performance in FY24 when exports were affected because of high retail inventory, sluggish demand from the key end markets, supply chain issues, including the Red Sea crisis and heightened competition from neighbouring countries.

The CNX Nifty is currently trading at 24691.95, down by 89.15 points or 0.36% after trading in a range of 24636.75 and 24882.00. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 1.61%, Shriram Finance up by 0.89%, Nestle up by 0.85%, Hindustan Unilever up by 0.53% and Tech Mahindra up by 0.52%. On the flip side, Bharat Electronics down by 2.23%, Tata Motors down by 2.18%, Maruti Suzuki down by 1.98%, Tata Steel down by 1.92% and Mahindra & Mahindra down by 1.82% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 518.37 points or 1.33% to 38,436.23, Taiwan Weighted lost 124.46 points or 0.53% to 23,418.07, KOSPI dropped 29.40 points or 1.13% to 2,575.52, Straits Times fell 6.48 points or 0.18% to 3,608.10 and Jakarta Composite plunged 17.53 points or 0.23% to 7,755.07.

On the flip side, Hang Seng advanced 107.05 points or 0.52% to 20,585.51 and Shanghai Composite strengthened 17.38 points or 0.53% to 3,285.49.