Benchmarks trade lower in morning deals

Indian equity benchmarks were trading lower with losses of around half percent in morning deals amid foreign fund outflows. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 6,409.86 crore on Tuesday, according to exchange data. Some concern also came as the Global Trade Research Initiative (GTRI) stated that India's gold imports have surged alarmingly, posing a potential threat to its trade balance and economic stability, and the government should take action to address this issue. It said the imports are driven by multiple factors, including growing investment demand, tariff reductions, and loopholes in trade agreements and this surge has raised significant economic concerns, distorting the trade balance, weakening the rupee, and widening the current account deficit. Traders took a note of a CAG audit report that the commerce ministry needs to properly monitor the scheme to promote exports, EPCG, as it not only allows duty-free imports of capital goods but also grants a long gestation period for meeting the export obligation. On the global front, Asian markets are trading mixed as investors await the Federal Reserve's last interest rate decision of the year later in the day. 

The BSE Sensex is currently trading at 80333.78, down by 350.67 points or 0.43% after trading in a range of 80313.02 and 80868.02. 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 0.31%, while Small cap index was down by 0.41%.

The few gaining sectoral indices on the BSE were Healthcare up by 0.56% and Telecom up by 0.28%, while Utilities down by 1.41%, Power down by 1.40%, Capital Goods down by 1.24%, PSU down by 1.05% and Industrials down by 0.96% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.09%, Reliance Industries up by 0.75%, HCL Technologies up by 0.59%, Tech Mahindra up by 0.36% and Hindustan Unilever up by 0.30%. On the flip side, Power Grid Corporation down by 1.92%, Tata Motors down by 1.88%, Adani Ports &SEZ down by 1.14%, NTPC down by 0.94% and Bajaj Finserv down by 0.92% were the top losers.

Meanwhile, ICRA in its latest report has said that the domestic gold jewellery consumption in value terms is expected to continue its growth momentum in the current financial year and is likely to witness an on-year rise of 14-18 per cent. It said gold jewellery consumption growth had witnessed a growth of 18 per cent in 2023-24, primarily driven by realisations even as volume growth was subdued.

According to the report, while gold prices were volatile, improving consumer sentiments and festive-led demand aided consumption growth in the recent months. Moreover, it stated a sharp 900 bps cut in import duty in the Union Budget in July 2024, and consequent correction in gold prices for a brief period led to some pre-buying of jewellery as well as bars and coins during the second quarter of FY25, which is generally a seasonally weak quarter. This, coupled with higher number of auspicious and wedding days, and favourable monsoons aiding better rural output, is likely to help jewellery demand growth in H2 FY25.

ICRA Vice President and Sector Head - Corporate Ratings, Sujoy Saha said ‘The organised market is projected to record a healthy YoY expansion of 18-20 per cent in FY25. Planned store additions with focus on tier II and III cities, rising gold prices, shift in preferences towards branded jewellery and some likely pre-buying in the fourth quarter of FY25 on account of higher number of auspicious days in the first quarter of FY26 shall drive growth. The customs duty cut is also expected to disincentive unofficial imports, thus supporting the growth in organised trade.’

The CNX Nifty is currently trading at 24228.95, down by 107.05 points or 0.44% after trading in a range of 24228.50 and 24394.45. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 1.88%, Cipla up by 1.36%, Trent up by 1.10%, Sun Pharma Inds. up by 0.98% and Tata Consumer Product up by 0.80%. On the flip side, Power Grid Corporation down by 2.00%, Tata Motors down by 1.96%, Bharat Electronics down by 1.63%, Adani Ports &SEZ down by 1.32% and JSW Steel down by 1.14% were the top losers.

Asian markets are trading mixed; Taiwan Weighted added 140.15 points or 0.61% to 23,158.16, Hang Seng advanced 114.82 points or 0.58% to 19,815.30, KOSPI increased 27.69 points or 1.13% to 2,484.50 and Shanghai Composite strengthened 24.15 points or 0.71% to 3,385.64.

On the flip side, Straits Times fell 15.57 points or 0.41% to 3,784.36, Nikkei 225 slipped 168.76 points or 0.43% to 39,195.92 and Jakarta Composite plunged 34.25 points or 0.48% to 7,123.48.