Friday turns out to be yet another lousy day for markets

Friday turned out to be yet another lousy day for Indian equity markets, with the Sensex and the Nifty closing lower by around 100 and 25 points, respectively. Key indices made a positive start of the day, as Engineering exporters’ apex body Engineering Export Promotion Council of India (EEPC) urged the Reserve Bank of India (RBI) to facilitate easy and cheaper bank loans mainly for the Micro, Small, and Medium Enterprises (MSMEs). EEPC also recommended that the banks should not ask for external credit rating as they are doing internal rating and banks be advised not to charge loan application processing and credit limit renewal fee. Sentiments were also optimistic with Corporate Affairs Secretary Injeti Srinivas’ statement that the corporate affairs ministry maintained a fairly reliable database that is not a black box. He emphasized that it is up to statistical authorities to decide on which data is representative for GDP calculation.

However, markets soon turned volatile to settle the day in red terrain, amid reports that India inflation likely crept up slightly to a six-month high in April, driven mainly by food prices, although holding below the Reserve Bank of India's medium-term target of 4 percent for the ninth straight month. Market participants also got worried, as the International Monetary Fund (IMF) warned that trade tensions and the exchange of tariffs between the United States and China pose a threat to the global economy. Some worries also came with the Association of Mutual Funds in India’s (AMFI) data report stating that net inflows into equity mutual funds plunged 61 per cent to Rs 4,609 crore in April compared to the previous month, as volatility in stock markets and uncertainty over the outcome of general elections impacted investor sentiments. In March, net inflows into equity funds stood at Rs 11,756 crore.

On the global front, European markets were trading in red, even though Germany's exports rebounded at the fastest pace in three months in March, defying expectations for further decline, and added strength to hopes that the biggest euro area economy performed strongly in the first three months of the year, after narrowly escaping a recession in the previous quarter. The figures from the Federal Statistical Office showed that exports rose 1.5 percent month-on-month in March, after a revised 1.2 percent fall in February. Asian markets ended in green, even as an increase in US tariffs on $200 billion of Chinese goods kicked in and China's commerce ministry said it would take necessary counter-measures.

On the sectoral front, banking stocks ended higher, despite the Reserve Bank’s data report showed that both bank credit and deposit growth lost the momentum and slowed to 12.95 percent and 9.71 percent at Rs 96.21 lakh crore and 124.86 lakh crore respectively, in the fortnight to April 26. In the previous fortnight, credit offtake grew 14.19 per cent and deposits 10.60 percent. Further, stocks related to packaging industry remained in focus with Commerce Secretary Anup Wadhawan’s statement that the fast-growing Indian packaging industry needs to focus on key areas such as safety, environment protection, reusabilty and re-cyclability of material with a view to promote the growth of the sector in a sustainable way.

Finally, the BSE Sensex slipped 95.92 points or 0.26% to 37,462.99, while the CNX Nifty was down by 22.90 points or 0.20% to 11,278.90.

The BSE Sensex touched a high and a low of 37,721.98 and 37,370.39, respectively and there were 10 stocks advancing against 21 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index gained 0.24%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.51%, Telecom up by 0.83%, Bankex up by 0.43%, Consumer Disc up by 0.24% and PSU up by 0.22%, while Metal down by 1.54%, IT down by 1.13%, Oil & Gas down by 0.98%, TECK down by 0.82% and Energy down by 0.65% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.94%, Bharti Airtel up by 2.09%, ICICI Bank up by 0.88%, HDFC up by 0.81% and Mahindra & Mahindra up by 0.57%. On the flip side, Tata Steel down by 6.10%, HCL Tech. down by 4.07%, Yes Bank down by 3.70%, Indusind Bank down by 2.44% and ONGC down by 1.74% were the top losers.

Meanwhile, Niti Aayog CEO Amitabh Kant has said the food services and restaurant industry will play a critical role in pushing India's Gross Domestic Product (GDP) growth. He also pointed out that the restaurant sector is third largest industry among India's service sectors. He added “If India was to grow from 7.5 percent to 9-10 per cent, the restaurant industry will be very critical drivers of growth story...Food services industry will be main drivers of India's growth.”

Kant has stated that there will be a huge food revolution in India and it will be driven by Indian entrepreneurs and chefs. Noting that restaurants are great wealth and job creators, he said digital technology has played great role in expansion of restaurant industry.

Niti Aayog CEO further stated that Indian soft power will be driven by Indian restaurants and chefs. He also said that Indian regional cuisines will make a major impact on global market in the days to come. He noted that Indian regional cuisines are still waiting to be promoted and marketed. He expressed hope that young entrepreneurs will make a significant impact on the food industry.

The CNX Nifty traded in a range of 11,345.80 and 11,251.05. There were 19 stocks advancing against 29 stocks declining, while 2 stocks remained unchanged on the index.

The top gainers on Nifty were Zee Entertainment up by 3.52%, SBI up by 2.54%, Titan up by 2.26%, Bharti Airtel up by 1.92% and Indiabulls Housing Finance up by 1.86%. On the flip side, Tata Steel down by 6.20%, HCL Tech. down by 4.54%, Yes Bank down by 3.46%, Indusind Bank down by 3.08% and Indian Oil Corporation down by 2.06% were the top losers.

European markets were trading in red; UK’s FTSE 100 decreased 30.54 points or 0.42% to 7,237.95, France’s CAC slipped 33.21 points or 0.63% to 5,346.37 and Germany’s DAX was down by 96.42 points or 0.81% to 12,070.34.

Asian markets ended mostly higher on Friday as investors shrugged off the US decision to increase tariffs on $200 billion worth of Chinese goods and remained hopeful of a breakthrough in trade talks. Chinese shares ended higher and the yuan strengthened as state funds stepped in to prop up markets following the Trump administration's latest tariff hike. Though, Japanese shares ended lower after the US hiked tariffs on more than $200 billion in goods from China, raising concerns the trade dispute will dent global growth.