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Indian Markets Trim Gains Amid Profit Booking and Slightly Decreased Forex Reserves

Strategic Insights

— 2 min read

Indian stock markets opened the session with a positive bias, influenced by the broader indices being in the green. The BSE Mid cap and Small cap indices rose by 0.41% and 0.57%, respectively. However, a cautiousness crept in the markets due to the Reserve Bank of India's data showing a $2.9 billion decline in the country's forex reserves to $593.2 billion as of June 23. Meanwhile, the manufacturing sector experienced a slowdown in June compared to May, as per a private survey by S&P Global India. The Purchasing Managers' Index (PMI) fell to 57.8 in June from 58.7 in May. Despite the aforementioned concerns, markets continued to trade higher due to aggressive buying in HDFC twins, Ultratech Cement, and Tata Steel. The BSE Sensex rose by 0.37% to 64,961.10, while the CNX Nifty gained 0.42% to 19,269.65.

Key Takeaways:

  • The BSE Mid cap index increased by 0.41% and the Small cap index rose by 0.57%. The sectors with the highest gains were Oil & Gas (up 2.19%), Energy (up 1.68%), Metal (up 1.59%), PSU (up 1.01%), and Telecom (up 0.74%). The losing sectors were IT (down 0.56%), TECK (down 0.41%), Auto (down 0.22%), Consumer Durables (down 0.07%), and Healthcare (down 0.05%).
  • HDFC, Tata Steel, Ultratech Cement, Mahindra & Mahindra, and HDFC Bank were the top gainers on the Sensex, with increases of 2.00%, 1.74%, 1.71%, 1.46%, and 1.37%, respectively. On the flip side, Power Grid, Sun Pharma, Tech Mahindra, HCL, and Nestle were the top losers.
  • The output of the eight core industries grew 4.3% year-on-year in May 2023, a slower rate compared to the 19.3% in the year-ago period. Coal production, fertilizer production, steel production, and cement production increased by 7.2%, 9.7%, 9.2%, and 15.5%, respectively, while crude oil production and natural gas production declined by 1.9% and 0.3%, respectively. Electricity generation also decreased by 0.3% in May 2023 compared to May 2022.
  • Asian markets were trading higher, with Taiwan's Weighted Index, Hang Seng, Shanghai Composite, KOSPI, Jakarta Composite, Straits Times, and Nikkei 225 increasing by 0.99%, 1.92%, 1.37%, 1.27%, 0.32%, 0.16%, and 1.63%, respectively.

Statistics:

  • $593.2 billion: The country's forex reserves as of June 23 (RBI data)
  • 57.8: The Purchasing Managers' Index (PMI) in June, a decrease from 58.7 in May (S&P Global India survey)
  • 2.9 billion: The decline in the country's forex reserves (RBI data)
  • 4.3%: The output growth of eight core industries in May 2023, a slower rate compared to the 19.3% in the year-ago period
  • 7.2%, 9.7%, 9.2%, and 15.5%: The increases in coal production, fertilizer production, steel production, and cement production, respectively
  • 1.9% and 0.3%: The declines in crude oil production and natural gas production, respectively
  • 0.3%: The decline in electricity generation
  • 0.42% and 0.37%: The gains in the CNX Nifty and BSE Sensex, respectively

Sources:

  • Reserve Bank of India (RBI)
  • S&P Global India
  • Accord Fintech
  • Contify.com

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