Markets trade in red in early deals; Bharti Airtel leads losers

Indian equity benchmarks made cautious start on Tuesday tracking overnight gains on Wall Street and mostly negative cues from Asian counterparts as traders remain cautious ahead of the release of key US economic data later in the week that could impact the expectations regarding how quickly the US Fed will lower interest rates. Rising geopolitical tensions in the Middle East is also weighing on market sentiment. Sensex and Nifty are trading in red with cut of around half a percent each in early deals amid weak earnings and ongoing foreign selling. In the 21 sessions of October, FIIs sold Indian equities worth Rs 1,03,470 crore. Traders overlooked the finance ministry’s statement that India's economic outlook remains bright, underpinned by a stable external sector, positive farm prospects and chances of higher government spending to make up for the shortfall during the general elections but ‘underlying demand conditions bear watching’. It also said India's inflation appears largely under control despite sporadic spikes in prices of certain vegetable. In stock specific development, Bharti Airtel leading the losers on the indices as Q2 numbers miss estimates. Bharti Airtel's consolidated Q2FY25 revenue rose 8% to Rs 41,473 crore from Rs 38,506 crore.

The BSE Sensex is currently trading at 79616.15, down by 388.89 points or 0.49% after trading in a range of 79598.86 and 80104.59. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.01%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.41%, Realty up by 0.35%, Industrials up by 0.33%, PSU up by 0.26% and Utilities up by 0.23%, while Telecom down by 1.47%, Auto down by 1.23%, TECK down by 0.92%, Oil & Gas down by 0.68% and Healthcare down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.12%, ICICI Bank up by 0.84%, Larsen & Toubro up by 0.59%, Nestle up by 0.36% and SBI up by 0.12%. On the flip side, Bharti Airtel down by 2.75%, Mahindra & Mahindra down by 2.17%, Indusind Bank down by 1.79%, Maruti Suzuki down by 1.60% and Tata Motors down by 1.51% were the top losers.

Meanwhile, the finance ministry in its September edition of Monthly Economic Review has said that the performance of the Indian economy has been satisfactory during the first half of the ongoing fiscal year but concerns remain with regard to demand conditions going forward. The outlook for the Indian economy is good, underpinned by a stable external sector, positive agricultural outlook, expected improvements in demand supported by the festival season, and the likelihood of an increase in government spending, which will boost investment activity. However, at the margin, demand conditions in the economy bear watching.

Urban demand appears to moderate due to softening consumer sentiments, limited footfall due to above-normal rainfall, and seasonal periods during which people tend to refrain from new purchases. Further, risks to growth arise from escalating geopolitical conflicts, deepening geoeconomic fragmentation and elevated valuations in financial markets in some advanced economies. Their spillover effects on India could cause negative wealth effects, impacting household sentiments and altering spending intentions on durable goods. After two months of low inflation, consumer price inflation rose in September, primarily driven by the effects of erratic monsoon on a few vegetable supplies. Barring a sharp rise in prices of a few vegetables, inflation appears well contained.

In the medium term, it said, favourable factors, such as rejuvenated reservoir levels, healthy Kharif crop sowing brightening the agriculture output prospects, and ample food grain stocks, would help contain price pressures. Sentiment towards India among international direct and portfolio investors is positive, it said, adding that sustaining the growth momentum is essential to turn these positive sentiments into actual direct and portfolio investments in the country. However, foreign investors have continued selling in the Indian market, pulling out a massive Rs 85,790 crore (around $10.2 billion) from equities this month due to Chinese stimulus measures, attractive stock valuations, and the elevated pricing of domestic equities. October is turning into the worst-ever month in terms of foreign fund outflows. In March 2020, FPIs withdrew Rs 61,973 crore from equities. The latest outflow came after a nine-month high investment of Rs 57,724 crore in September.

The report said the external sector continues to perform well, as reflected in rising capital inflows, a stable rupee and comfortable foreign exchange reserves. Forex reserves surpassed the $700 billion mark at the end of September 2024, making India one of the top four countries with more than $700 billion reserves. With regards to the job market, the report said the manufacturing sector continued to show rising employment, as reflected in the Annual Survey of Industries results for 2022-23. Given the overall subdued inflation, barring a few food items, the real price of money may have gone up, it said ‘we maintain that the Indian economy will grow between 6.5 and 7.0 per cent in the current fiscal year’. Risks stem from global factors such as geopolitical conflicts, rising geo-economic fragmentation, uncertainties about the trade policies of major economies and consequent financial market reactions.

The CNX Nifty is currently trading at 24218.20, down by 120.95 points or 0.50% after trading in a range of 24206.75 and 24378.65. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were NTPC up by 1.99%, Bharat Electronics up by 1.26%, Eicher Motors up by 0.89%, ICICI Bank up by 0.82% and Nestle up by 0.47%. On the flip side, Bharti Airtel down by 2.68%, Cipla down by 2.60%, Mahindra & Mahindra down by 2.51%, Maruti Suzuki down by 1.93% and Bajaj Auto down by 1.83% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted lost 419.66 points or 1.81% to 22,778.41, Shanghai Composite weakened 21.68 points or 0.66% to 3,300.52, KOSPI dropped 11.03 points or 0.42% to 2,601.40, Straits Times fell 10.77 points or 0.3% to 3,573.31, Jakarta Composite declined 9.26 points or 0.12% to 7,625.37 and Hang Seng was down by 6.02 points or 0.03% to 20,593.34, while Nikkei 225 surged 191.02 points or 0.49% to 38,796.55.