Sensex, Nifty trade under pressure in early deals amid escalating Middle East tensions

Indian equity benchmarks made negative start on Monday and soon extend their losses amid mixed cues from global markets and escalating Middle East tensions due to Israel intensifying attacks on Iranian-backed forces. Sensex and Nifty are trading lower with cut of around 0.80% each in early deals amid foreign fund outflows. On September 27, 2024, Foreign Institutional Investors (FIIs) sold shares worth Rs 1,209.10 crore. Some cautiousness also came amid higher oil prices, in early deals, on increasing concerns of potential supply disruptions from the Middle East producing region after Israel stepped up attacks on Iranian-backed forces. Investors also avoided to take any long positions ahead of key economic indicators from India, including manufacturing, services, composite indices, current account deficit (CAD), external debt, and government budget figures, during this week. 

On the global front, Asian markets are trading mixed, following the mixed cues from Wall Street on Friday, aided by strong gains in China and Hong Kong, partially offset by steep losses in Japan. Traders continue to react to the additional stimulus measures from the Chinese government to spur growth in the world's second largest economy. The Chinese government announced further steps to revive the nation's economy, with the central bank cutting interest rates and adding to stimulus measures already announced recently. Besides, industrial production in Japan was down a seasonally adjusted 3.3 percent on month in August.

Back home, textile stocks are in focus as the Union Minister of Textiles Giriraj Singh said the textiles industry will grow to $350 billion by 2030 generating crores of jobs. He added the 100-day achievements lay the foundation for achieving the set targets by 2030 and focus on all aspects of the value chain of the textiles sector. In stock specific development, Tamilnad Mercantile Bank traded higher as the bank is developing a roadmap to enhance its MSME portfolio, including new branch openings and establishing MSME hubs.

The BSE Sensex is currently trading at 84884.57, down by 687.28 points or 0.80% after trading in a range of 84844.47 and 85359.65. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.76%, while Small cap index was down by 0.71%.

The few gaining sectoral indices on the BSE were Metal up by 0.63%, Basic Materials up by 0.23%, Consumer Durables up by 0.14% and FMCG up by 0.10%, while Realty down by 1.98%, Telecom down by 1.47%, Energy down by 1.46%, Oil & Gas down by 1.35% and Bankex down by 1.27% were the top losing indices on BSE.

The top gainers on the Sensex were JSW Steel up by 1.65%, Tata Steel up by 1.14%, Asian Paints up by 1.12%, Titan Company up by 0.93% and Hindustan Unilever up by 0.92%. On the flip side, ICICI Bank down by 2.02%, Axis Bank down by 1.93%, Reliance Industries down by 1.65%, Tech Mahindra down by 1.51% and Tata Motors down by 1.28% were the top losers.

Meanwhile, the Union Minister of Commerce & Industry Piyush Goyal has said that the 14 sectors covered under the production linked incentive (PLI) schemes have witnessed investments of Rs 1.46 lakh crore till August and the capital infusion is expected to reach Rs 2 lakh crore in the coming years. This has resulted in production/sales worth Rs 12.50 lakh crore and employment generation of around 9.5 lakh (direct and indirect), which is expected to reach 12 lakh soon. Exports have exceeded Rs 4 lakh crore, with substantial contribution from key sectors such as electronics, pharmaceuticals and food processing.

Goyal urged the Indian industry to focus on prioritising the production of high-quality goods to promote Brand India through sustainable practices. He also called for focusing on increasing domestic value addition and extending support to domestic manufacturers in this regard. He added that the government is committed to fast-tracking all the necessary approvals related to PLI industry and also providing handholding support in achieving greater market access.

The government has rolled out the scheme in 2021 for 14 sectors including electronics, pharmaceuticals, white goods, telecommunication and drones with an outlay of Rs 1.97 lakh crore. It aims to boost domestic manufacturing, attract investments and increase exports. In the electronics sector, mobile phone manufacturing now accounts for half of India's total output, with a ‘3x’ increase in exports since 2020-21. Further in the automobile sector, global champions have rolled out electric vehicles, with substantial investment in the country.

The CNX Nifty is currently trading at 25969.45, down by 209.50 points or 0.80% after trading in a range of 25961.55 and 26134.70. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 1.72%, JSW Steel up by 1.68%, Tata Steel up by 1.14%, Asian Paints up by 1.07% and Titan Company up by 0.83%. On the flip side, Hero MotoCorp down by 2.85%, Bharat Electronics down by 2.39%, Coal India down by 2.30%, ICICI Bank down by 2.01% and Axis Bank down by 1.94% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 1880.51 points or 4.72% to 37,949.05, Taiwan Weighted lost 294.59 points or 1.29% to 22,528.20, Jakarta Composite fell 94.66 points or 1.23% to 7,602.26, KOSPI was down by 20.60 points or 0.78% to 2,629.18. On the other hand, Hang Seng jumped 689.67 points or 3.23% to 21,321.97, Shanghai Composite strengthened 176.06 points or 5.39% to 3,263.59 and Straits Times was up by 5.04 points or 0.14% to 3,578.40.