Indian equity benchmarks extended their losses and were trading near the day's lows in late-afternoon trade as persistent foreign investor outflows continued to weigh on market sentiment. Foreign institutional investors (FIIs) extended their selling streak in the cash market to an 11th consecutive session, recording net sales of Rs 3,568.90 crore on October 9.
The Sensex and Nifty were trading nearly 1% lower each amid selling pressure in IT, FMCG and banking stocks. Some cautiousness came as the RBI data showed that India's forex reserves dropped by $12.952 billion to $734.606 billion during the week ended October 2.
On global front, most of the European markets were trading higher as investors balanced relatively resilient Middle Eastern supply flows against escalating regional tensions and a US claim that Russia and Ukraine had agreed to an energy ceasefire. Asian markets were trading mostly lower as investors braced for earnings season which could test elevated technology valuations.
The BSE Sensex is currently trading at 71692.65, down by 779.68 points or 1.08% after trading in a range of 71681.69 and 72884.25. There were 7 stocks advancing against 23 stocks declining on the index.
The top gaining sectoral indices on the BSE were Capital Goods up by 1.12%, Realty up by 1.00%, Auto up by 0.65%, Industrials up by 0.34% and Power up by 0.28%, while FMCG down by 1.35%, TECK down by 1.33%, IT down by 0.93%, Telecom down by 0.88% and Bankex down by 0.86% were the top losing indices on BSE.
The top gainers on the Sensex were Bharat Electronics up by 1.44%, Mahindra & Mahindra up by 1.05%, HCL Technologies up by 0.49%, Kotak Mahindra Bank up by 0.43% and Sun Pharma up by 0.42%. On the flip side, Tech Mahindra down by 4.22%, ITC down by 3.10%, Bharti Airtel down by 1.99%, Hindustan Unilever down by 1.79% and State Bank of India down by 1.68% were the top losers.
Meanwhile, former NITI Aayog chief executive Amitabh Kant has called for a reduction in the statutory liquidity ratio (SLR) to boost job-intensive manufacturing. He described the production-linked incentive (PLI) as a short-term solution for the manufacturing sector. But he said ‘in the long term, we need to reduce the cost of doing business through measures like cutting the SLR, which can reduce the cost of credit.’ He also said ‘statutory liquidity ratio at 18% is too high for India ... I am a great believer in bringing it down because flow of credit to manufacturing sectors will be the key in the long run.’
Without sharing the ideal level of SLR, kant maintained that the cost of credit and availability of resources will be essential to help the manufacturing sector. The SLR, which is the mandatory percentage of net demand and time liabilities or deposits that banks must invest in government securities, was cut to 18 per cent over a few years but has remained at that level since then. While it helps the government's borrowing programme, it is also criticised for crowding out capital that private enterprises across sectors could use.
He further said that without adequate credit availability, startups in new-age sectors like geospatial will not be able to grow into large companies that can disrupt. Underlining that manufacturing creates employment opportunities, which is important for a country like India, he also flagged land acquisition as important. He said ‘we need to look at how China and its 'proxies' like Vietnam and Mexico are supporting the manufacturing sector in their countries through easy land acquisition or long-term land leasing as well.’ Similarly, he said the cost and availability of power also needs to be looked at, and reminding that this is a state subject and the states must look into it.
The CNX Nifty is currently trading at 22315.10, down by 205.35 points or 0.91% after trading in a range of 22312.45 and 22651.10. There were 14 stocks advancing against 35 stocks declining, while 1 stock remain unchanged on the index.
The top gainers on Nifty were Dr. Reddy's Lab up by 2.86%, Bajaj Auto up by 2.61%, Bharat Electronics up by 1.43%, BSE up by 1.38% and Tata Motors Passenger Vehicles up by 1.29%. On the flip side, Tech Mahindra down by 3.97%, ITC down by 3.33%, Larsen & Toubro down by 2.42%, State Bank of India down by 2.21% and Bharti Airtel down by 1.93% were the top losers.
Asian markets were trading mostly in red; KOSPI dropped 241.69 points or 3.79% to 6,384.24, Jakarta Composite plunged 153.63 points or 2.59% to 5,940.13, Shanghai Composite weakened 16.55 points or 0.44% to 3,797.24 and Taiwan Weighted lost 11.48 points or 0.02% to 49,301.96.
On the other hand, Straits Times rose 22.4 points or 0.41% to 5,424.29 and Hang Seng was up by 9.65 points or 0.04% to 24,221.00.
European markets were trading mostly in green; UK’s FTSE 100 increased 57.55 points or 0.55% to 10,609.60 and Germany’s DAX gained 130.13 points or 0.52% to 25,217.40, while France’s CAC was down by 4.83 points or 0.06% to 7,798.50.
