Domestic indices continue to witness bloodbath in late morning deals

Domestic equity indices continued to witness bloodbath and were trading lower with cut of around one percent in late morning deals as market participants indulged in reducing their positions. Weak cues from other Asian markets and rising crude oil prices weighed on the domestic sentiments. Traders were cautious after Israel launched an airstrike on Iran and declared a special state of emergency, raising fears of oil supply disruption. Israel reportedly hit sites like Natanz, Fordow, and Isfahan to curb Iran's uranium enrichment and missile capabilities. Most of the sectoral indices were trading in red led by Bankex, FMCG, Utilities, Power and Auto. 

On the global front, Asian markets were trading in red amid heightening geopolitical tensions in the Middle East region. Back home, in the stock specific development, ONGC jumped as Brent crude futures experienced a significant spike.

The BSE Sensex is currently trading at 80933.88, down by 758.10 points or 0.93% after trading in a range of 80354.59 and 81037.10. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.46%, while Small cap index down by 0.29%.

The only gaining sectoral index on the BSE was IT up by 0.02%, while Bankex down by 1.20%, FMCG down by 0.98%, Utilities down by 0.95%, Power down by 0.90% and Auto down by 0.89% were the top losing indices on BSE.

The few gainers on the Sensex were Bharat Electronics up by 2.35%, Tech Mahindra up by 0.70% and TCS up by 0.03%. On the flip side, Adani Ports down by 2.59%, SBI down by 2.02%, Bajaj Finserv down by 1.83%, Ultratech Cement down by 1.66% and Power Grid down by 1.33% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that inventories of rare earth magnets may taper off by mid-July for certain automotive applications, following the export restrictions from China and ensuing shipment delays. It said while the automobile industry is exploring a range of contingency options, each of these appears ridden with logistical, regulatory, and engineering complexities, exacerbating the prevailing uncertainty.

ICRA Senior Vice President and Group Head-Corporate Ratings Jitin Makkar said the industry, having recovered from the semiconductor supply crunch of 2021-22 that shaved off nearly 100,000 units, or about 4 per cent, from passenger vehicle production, now faces a fresh disruption. He said with China tightening export controls and delaying shipment clearances, rare earth magnet inventories are projected to last only until mid-July 2025 for several, if not all, passenger vehicle and two-wheeler applications.

He said the magnets in question--neodymium-iron-boron (NdFeB)-- are known for their strength and efficiency, used for high-performance automotive applications such as traction motors in electric vehicles (two-wheelers and passenger vehicles) and power steering motors (in passenger vehicles) in both electric vehicles and internal combustion engine vehicles. The more conventional ferrite magnets are used for less performance-sensitive applications such as wiper motors, window regulators, and starter motors. 

He further said in FY2025, India imported around $200 million worth of these magnets for both automotive and non-automotive applications, with approximately 85 per cent of this sourced from China. He added that the supply uncertainty has cast a shadow on production planning, and the dependence on China for these specialised materials could upend the automobile sector, particularly the fast-growing electric vehicle segment, if the concern remains unresolved. 

The CNX Nifty is currently trading at 24657.20, down by 231.00 points or 0.93% after trading in a range of 24473.00 and 24692.50. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Bharat Electronics up by 2.28%, ONGC up by 1.30%, Tech Mahindra up by 0.75%, Wipro up by 0.49% and Apollo Hospital up by 0.16%. On the flip side, Adani Ports down by 2.66%, SBI down by 2.04%, Shriram Finance down by 1.96%, Bajaj Finserv down by 1.85% and Ultratech Cement down by 1.73% were the top losers.

All Asian markets were trading lower; Hang Seng declined 234 points or 0.98% to 23,801.38, Jakarta Composite plunged 46.25 points or 0.65% to 7,158.12, Shanghai Composite weakened 24.96 points or 0.74% to 3,377.70, Straits Times fell 17.74 points or 0.45% to 3,904.46, KOSPI dropped 34.73 points or 1.2% to 2,885.30, Nikkei 225 slipped 420.92 points or 1.11% to 37,752.17 and Taiwan Weighted lost 252.44 points or 1.15% to 22,035.38.