Sensex, Nifty remain lower amid rising wholesale inflation

Indian equity benchmarks remained lower during early afternoon deals, amid rising wholesale inflation data along with negative cues from other Asian markets. Inflation based on wholesale price index (WPI) in India jumped in the month of October 2024 to 2.36% from 1.84% in September 2024, due to increase in prices of food articles, crude petroleum & natural gas and electricity. Adding anxiety among traders, a WTO report said that there has been an increase in the trade restrictive measures introduced by G20 member countries during mid-October 2023 to mid-October 2024. It said that during the review period, G20 economies introduced 91 new trade-restrictive and 141 trade-facilitating measures on goods, both of which mostly dealt with imports.

On the global front, Asian markets were trading mostly in red, following the mixed cues from Wall Street overnight. Back home, mining and mineral sector stocks were in watch, as ratings agency CareEdge in its latest report has said that with India having limited resources of lithium, cobalt, nickel and other critical minerals, domestic players need to secure long-term supply from countries having sizable reserves and focus on battery reuse and recycling. It said this would provide environmental benefits and reduce price and supply risk associated with imports of these minerals.

The BSE Sensex is currently trading at 77508.01, down by 182.94 points or 0.24% after trading in a range of 77424.81 and 78055.52. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.60%, while Small cap index was up by 1.09%.

The top gaining sectoral indices on the BSE were Realty up by 1.55%, Consumer discretionary up by 0.77%, Auto up by 0.55%, Metal up by 0.42% and Basic Materials up by 0.42%, while FMCG down by 1.29%, PSU down by 0.47%, Oil & Gas down by 0.39%, Consumer Durables down by 0.27% and Utilities down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC Bank up by 1.13%, Reliance Industries up by 1.09%, Kotak Mahindra Bank up by 0.88%, Tech Mahindra up by 0.30% and Asian Paints up by 0.12%. On the flip side, Hindustan Unilever down by 2.51%, ITC down by 1.86%, Adani Ports & SEZ down by 1.79%, Titan down by 1.54% and Nestle down by 1.40% were the top losers.

Meanwhile, ratings agency CareEdge in its latest report has said that with India having limited resources of lithium, cobalt, nickel and other critical minerals, domestic players need to secure long-term supply from countries having sizable reserves and focus on battery reuse and recycling. It said this would provide environmental benefits and reduce price and supply risk associated with imports of these minerals. India has set an ambitious target to meet 50 per cent of its primary energy requirement from renewable energy sources by 2030 (as a percentage of annual sales). 

To achieve this, the report said India needs significant penetration of electric vehicles (EVs) as well as grid level energy storage capacity and this envisaged transition would significantly increase India's need for advanced chemistry batteries, particularly lithium-ion (Li-ion) batteries, due to the limitations of traditional batteries like lead-acid and nickel-metal hydride batteries. The demand for lithium-ion battery storage in India is expected to grow significantly, driven predominantly by migration towards EVs and renewable energy storage requirements. Consequently, India's dependence on imports is expected to decline sharply to around 20 per cent by FY27 from near-full dependence presently, due to giga-size integrated battery capacities coming onstream in India.

The report further said the relative cost-competitiveness of Indian manufacturers, in the context of capacity addition and pricing policy of large global integrated players, especially Chinese manufacturers, will be a key factor to monitor. India, in the previous fiscal, had a demand for around 15 GWh of Li-ion battery storage, largely from EVs and consumer electronics, which is expected to reach around 54 GWh by FY27 and around 127 GWh by FY30. It added that the demand is currently being met mostly through imports. However, it expects India's import dependency to decline to around 20 per cent by FY27, despite significant growth in demand due to large scale integrated capacities being built for Li-ion battery storage. 

The CNX Nifty is currently trading at 23521.70, down by 37.35 points or 0.16% after trading in a range of 23486.10 and 23675.90. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 7.58%, Hero MotoCorp up by 2.30%, HDFC Life Insurance up by 1.27%, Coal India up by 1.18% and Hindalco up by 1.11%. On the flip side, BPCL down by 2.60%, Hindustan Unilever down by 2.55%, Tata Consumer Products down by 1.93%, ITC down by 1.87% and Adani Ports & SEZ down by 1.81% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 427.93 points or 2.16% to 19,395.52, Jakarta Composite plunged 43.94 points or 0.6% to 7,264.73, Shanghai Composite weakened 62.7 points or 1.82% to 3,376.58, Nikkei 225 slipped 185.96 points or 0.48% to 38,535.70 and Taiwan Weighted lost 144.85 points or 0.64% to 22,715.38, while Straits Times rose 1.15 points or 0.03% to 3,721.49 and KOSPI increased 1.30 points or 0.05% to 2,418.38.