Weakness persists over Dalal Street

A weak trade persisted over the Dalal Street in early afternoon session, with both Sensex and Nifty trading lower, amid selling in all sectors, despite positive cues from other Asian markets. Sentiments remained weak, as a report by National Stock Exchange highlighted that the revenue disparity among Indian states continues to be significant, while some states have shown revenue growth in FY25 but others have reported a revenue contraction. However, the retirement fund body, Employees' Provident Fund Organisation (EPFO) in its latest ‘Provisional payroll data’ report has showed that 18.53 lakh net members have been added in the month of August  2024, a 9.07% year-on-year growth compared to August 2023, signifying increased employment opportunities and heightened awareness of employee benefits, bolstered by EPFO’s effective outreach initiatives.

On the global front, Asian markets were trading mostly in green, after China reduced its benchmark lending rates by 25 basis points on Monday as the economic growth slowed further amid persistent deflationary pressures. The People's Bank of China cut its one-year loan prime rate to 3.10 percent from 3.35 percent. Likewise, the five-year LPR, the benchmark for mortgage rates, was lowered to 3.60 percent from 3.85 percent.

The BSE Sensex is currently trading at 81020.09, down by 204.66 points or 0.25% after trading in a range of 80811.23 and 81770.02. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 0.71%, while Small cap index was down by 1.00%.

The top losing sectoral indices on the BSE were Metal down by 1.31%, Oil & Gas down by 1.25%, PSU down by 1.16%, Basic Materials down by 1.13% and TECK down by 1.08%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were HDFC Bank up by 3.38%, Asian Paints up by 1.28%, Tech Mahindra up by 0.89%, Reliance Industries up by 0.65% and Nestle up by 0.57%. On the flip side, Kotak Mahindra Bank down by 5.59%, Indusind Bank down by 3.00%, Bajaj Finserv down by 2.49%, Bajaj Finance down by 2.19% and Mahindra & Mahindra down by 1.79% were the top losers.

Meanwhile, Global Trade Research Initiative (GTRI) in its report has said that the country's target of installing 500 GW of renewable energy by 2030 may push solar equipment import bill to about $30 billion per year and increase dependence on Chinese goods. It said developing a self-reliant solar manufacturing industry in India will require significant investment to create an integrated supply chain, especially in areas like polysilicon and wafer production. Without this, India may continue to face high import costs and struggle to meet its renewable energy goals.

GTRI said India installed 15 GW of solar capacity in 2023-24, raising the total to 90.8 GW by September, compared to just 2.8 GW in 2014. To meet the government's target of installing 500 GW of renewable energy by 2030, India needs to significantly ramp up installations to 65-70 GW each year, with over 80 per cent of this target expected to come from solar power. This target seems ambitious, particularly given India's reliance on imports, which could push solar import to $30 billion annually. In 2023-24, India imported $7 billion worth of solar equipment, with China supplying 62.6 per cent. China controls 97 per cent of global polysilicon production and 80 per cent of solar module manufacturing, making it difficult for India or any country to compete due to lower prices from China.

The report said India's solar manufacturing industry is in early stages, with most projects relying on imported ready-to-use modules. During the last fiscal year, ready-to-use solar modules' imports reached $4.4 billion. The country also imported solar cells worth $1.9 billion and $1 billion worth of other essential parts such as inverters, and cables, junction boxes, transformers, and other electrical components needed for solar installations. Local production is import-dependent and mainly focuses on the final two stages. 90 per cent of solar manufacturing in India involves assembling solar modules from imported cells with 15 per cent local value addition. It added that few Indian companies manufacture commercial scale solar cells from imported polysilicon or wafers that add 30-40 per cent value locally and no one produces solar cells from scratch-using silica sands.

The CNX Nifty is currently trading at 24752.35, down by 101.70 points or 0.41% after trading in a range of 24679.60 and 24978.30. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were HDFC Bank up by 3.26%, Bajaj Auto up by 2.98%, Asian Paints up by 1.21%, Tech Mahindra up by 0.86% and Eicher Motors up by 0.72%. On the flip side, Tata Consumer Products down by 7.08%, Kotak Mahindra Bank down by 5.55%, BPCL down by 3.23%, Indusind Bank down by 3.08% and Bajaj Finserv down by 2.47% were the top losers.

Asian markets were trading mostly in green; Jakarta Composite gained 7.3 points or 0.09% to 7,767.36, Shanghai Composite strengthened 3.8 points or 0.12% to 3,265.36, KOSPI increased 11.10 points or 0.43% to 2,604.92 and Taiwan Weighted added 55.26 points or 0.23% to 23,542.53, while Hang Seng declined 322.3 points or 1.55% to 20,481.81, Straits Times fell 24.95 points or 0.69% to 3,615.24 and Nikkei 225 slipped 27.15 points or 0.07% to 38,954.60.