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Sensex, Nifty add losses in late morning session
Aug-18-2022

Indian equity benchmarks, Sensex and Nifty, added losses in late morning session, impacted by negative cues from other Asian markets. Domestic sentiments remained pessimistic, amid a private report stating that India’s economy grew at a slower pace than the monetary policy committee's (MPC’s) projection of 16.2 per cent in the first quarter of financial year 2022-23 (Q1FY23). Their projections range between 14.5 per cent and 16 per cent.

The street failed to take any sense of relief with reports that the Union Cabinet approved raising the outlay of the Emergency Credit Line Guarantee Scheme (ECGLS) by Rs 50,000 crore to Rs 5 lakh crore and the additional amount will be earmarked for enterprises in the hospitality and related sectors.

On the global front, Asian markets were trading mostly in red, even after Hong Kong's unemployment and underemployment decreased in the May to July period. The labor force statistics from the Census and Statistics Department showed that the unemployment rate fell to a seasonally adjusted 4.3 percent in May to July period from 4.7 percent in April to June period. The underemployment rate also decreased in the three months ended July, to 2.2 percent from 3.0 percent during the April-June period.

The BSE Sensex is currently trading at 60034.53, down by 225.60 points or 0.37% after trading in a range of 59969.08 and 60287.13. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.26%, while Small cap index was up by 0.23%.

The top gaining sectoral indices on the BSE were Realty up by 0.92%, Telecom up by 0.59%, FMCG up by 0.44%, Utilities up by 0.26% and Industrials up by 0.21%, while Oil & Gas down by 1.02%, IT down by 0.98%, Energy down by 0.88%, Healthcare down by 0.84% and TECK down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.63%, Kotak Mahindra Bank up by 1.45%, Ultratech Cement up by 0.51%, SBI up by 0.44% and Hindustan Unilever up by 0.40%. On the flip side, Dr. Reddy's Lab down by 2.93%, Wipro down by 1.86%, Sun Pharma down by 1.47%, Infosys down by 1.44% and HCL Tech. down by 0.95% were the top losers.

Meanwhile, credit ratings agency ICRA in its latest report has said that elevated Aviation Turbine Fuel (ATF) prices and rupee depreciation are likely to pose a serious threat to the recovery process for domestic carriers. In India, ATF accounts for around 45 per cent of the operational cost of an airline. Besides, as much as 35-50 per cent of the airlines' operating expenses are US dollar driven.

According to the report, an area of concern remains the ATF prices, which surged by around 77 per cent Y-o-Y in August, given the elevated crude oil prices due to geo-political issues arising from the Russian invasion of Ukraine. On an aggregate basis, it said a return to normalcy will lead to recovery in passenger load factors, which, in turn, will aid revenues; however, these two factors will continue to weigh on the domestic airlines’ earnings in FY23. It believes that the domestic air traffic yields have moved up by 25-30 per cent over pre-Covid levels on domestic routes. The industry earnings in FY2023 will continue to reel under pressure owing to the elevated jet fuel prices, coupled with the depreciation of the Indian Rupee against the US dollar.

On a month-on-month basis, the ratings agency said domestic air passenger traffic was 7 per cent lower in July compared to the June passenger volumes of 10.05 million, given some impact of the cyclicality in passenger travel, mainly arising from the lean period during the monsoon. It also said the hardening of fares impacted leisure travel during the month which, in turn, also impacted the volumes. It also said the removal of ceiling on airfares from August 31 will help domestic airlines to bring their ticket prices in line with the supply-demand dynamics. 

The CNX Nifty is currently trading at 17881.55, down by 62.70 points or 0.35% after trading in a range of 17861.50 and 17954.65. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Tata Consumer Products up by 2.10%, SBI Life Insurance up by 1.67%, Kotak Mahindra Bank up by 1.66%, Bharti Airtel up by 1.56% and Hindustan Unilever up by 0.53%. On the flip side, Dr. Reddy's Lab down by 2.87%, ONGC down by 2.79%, Wipro down by 1.84%, BPCL down by 1.57% and Sun Pharma down by 1.50% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 280.63 points or 0.96% to 28,942.14, Hang Seng decreased 119.68 points or 0.60% to 19,802.77, Taiwan Weighted dropped 68.69 points or 0.44% to 15,396.76, Shanghai Composite declined 15.91 points or 0.48% to 3,276.62 and KOSPI fell 15.13 points or 0.6% to 2,501.34. On the flip side, Jakarta Composite soared 6.63 points or 0.09% to 7,140.08 and Straits Times advanced 14.41 points or 0.44% to 3,277.17.
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