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Indian stock markets declined on Tuesday after weak export data was released and the country's trade deficit surged.
The Nifty 50 index opened at 24,584.80 points with a decline of 83.45 points or 0.34 per cent. The BSE Sensex also lost 236 points to open at 81,511 points. Experts stated that the surge in the country's trade deficit may be the major market event today as it highlights the need for the RBI to intervene, and a rate cut possibility has increased. The rising trade deficit is challenging as it poses the risk of further depreciation of the Indian rupee. Ajay Bagga, Banking and Market Expert said that "We expect Indian markets to end on a high but the economic data and the lack of a counter cyclical boost on the fiscal or monetary fronts has been a disappointment. India's trade deficit came at a record high of USD37.8bn in November from USD27.1 in October, caused by weak exports". He further added "The RBI's using up of over USD 50 billion of FX reserves to protect the Indian rupee is unfathomable in this scenario. However, the RBI should have let the Indian rupee depreciate instead of doing the twin damage of artificially inflating the rupee and sucking out domestic liquidity in a busy credit season. Monetary policy needed to fire with a rate cut and liquidity injection and a rupee depreciation to make exports more competitive and imports more expensive". In the sectoral indices, the selling pressure dominated the markets, with only Nifty FMCG, Nifty Media, and Nifty Pharma gaining at the opening, while Nifty Bank, Nifty Auto, and Nifty IT were in red at the time of filing this report. In the Nifty 50 shares list, 16 stocks gained and 34 declined during the opening session. The top gainers in Nifty 50 at opening include Cipla, Tata Motors, Tech Mahindra, Adani Ports, and BEL, while the top losers include Shriram Finance, Grasim, Reliance, Eicher Motors, and Britannia. "For the day, resistance rests between 24726 and 24800, while supports lie in the 24554 - 24580 range. What's also interesting is that the Friday low took support at the Bollinger-middle line, which means buyers remain active on any decline inside what will soon be a period of reduced volumes and therefore higher volatility" said Akshay Chinchalkar, Head of Research, Axis Securities. In other Asian markets, a mixed trend was visible at the time of filing this report. Japan's Nikkei 225 index was up by 0.15 per cent along with Taiwan Weighted, which rose 0.34 per cent, while other markets including Hong Kong's Hang Seng, South Korea's KOSPI, and Jakarta Composite were down by 0.39 per cent. (ANI)
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