Sensex drops over 250 points on US debt ceiling concerns; Nifty below 18,600

Amid US debt deal concerns and weak manufacturing data from the world's second-largest economy China, Indian equity markets opened in the red on Wednesday. Investors also await India's GDP data, due post market hours today.

The BSE Sensex was trading 245 points or 0.39% lower at 62,724. Nifty50 was trading at 18,559, down 74 points or 0.40% at around 9.23 am.

Among Sensex stocks, SBI, Reliance, Tata Steel, IndusInd Bank, HDFC, ITC, and NTPC opened with cuts, while Tata Motors, HCL Tech, Asian Paints, Sun Pharma, Bharti Airtel, and Tech Mahindra opened higher.

Torrent Pharma opened 8% higher after the firm reported a net profit of Rs 287 crore for the quarter ended March 2023, as against a net loss of Rs 118 crore for the corresponding period a year ago.

On the sectoral front, Nifty Metal declined 1.13% and Nifty PSU Bank fell 1.02%. Financials, auto, FMCG, realty, and oil & gas also opened with cuts. In the broader market, Nifty Smallcap 100 gained 0.25%., while Nifty Midcap 100 opened flat.

Global Markets
Wall Street stocks finished mixed following a choppy session Tuesday, as markets weighed the remaining risk of a US debt default following the White House deal with House Speaker Kevin McCarthy.

The Dow Jones Industrial Average finished 0.2%. The broad-based S&P 500 was flat, while the tech-rich Nasdaq Composite Index gained 0.3%.

Asia's stock markets slid toward a second month of losses in a row on Wednesday, and even the glittering Nikkei paused, as weak Chinese factory activity fed growing doubts about the post-pandemic recovery in the world's second-biggest economy. Japan's Nikkei 225 fell 1.37%, and China's Shanghai Composite declined 0.74%.

Experts View
"The GDP data expected today is likely to show FY 24 growth rate to be around 7%. If it comes slightly above 7%, that can further aid the market momentum," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

"FPI flows are now moving more to India, South Korea and Taiwan where growth and corporate earnings prospects are bright. Sustained FPI flows can take the markets higher and into over-valued territory if new Nifty records are set," Vijayakumar added.

Deepak Jasani, Head of Retail Research at HDFC Securities said, "Previous swing high of 18458 is now expected to act as a support in the Nifty. On the upside next resistance is seen around 18,900 levels."

FIIs tracker
Foreign institutional investors (FIIs) bought Rs 2,086 crore worth of Indian equities on Tuesday. FIIs have been net buyers in Indian stocks in 23 of the last 24 sessions.

Crude oil price falls
Oil prices extended losses early on Wednesday as worries of slowing demand from top oil importer China after the release of weaker-than-expected economic data.

Brent crude futures for August delivery fell 28 cents to $73.43 a barrel, while US West Texas Intermediate crude (WTI) slipped 26 cents to $69.20 a barrel, with earlier gains reversed after China manufacturing data was released. Both benchmarks fell by more than 4% on Tuesday.

Rupee weakens
The Indian rupee fell 6 paise to $82.73 against the US dollar in early trade after the Chinese yuan dropped to a fresh six-month low to the US dollar. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, increased 0.15% to 104.32 level.

(With inputs from agencies)

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