Benchmarks witness bloodbath in early deals; Sensex crashes over 1,000 points

Indian equity benchmarks made gap-down opening on Thursday following weakness in the global markets. Domestic indices are trading deeply in red with cut of around 2% each in early deals due to selling in all the sector indices led by Consumer Durables, Realty and IT, which are down over 2% each. Among the stocks specific action, Titan and Tata Steel are leading the losers with losses of around 4%. Traders were concerned as the International Monetary Fund (IMF) cut India's economic growth forecast to 9 per cent for the current fiscal year ending March 31, joining a host of agencies which have downgraded their projections on concerns over the impact of a spread of new variant of coronavirus on business activity and mobility. Continues selling in FIIs also weighed on the markets. As per provisional data available on the NSE, foreign institutional investors (FIIs) net sold shares worth Rs 7,094.48 crore on January 25.

On the global front, Asian markets are trading lower following the mixed cues overnight from Wall Street, as traders are reacting to hawkish comments from the US Federal Reserve, which indicated that it plans to begin raising interest rates ‘soon,’ citing elevated inflation and a strong labor market. Surging crude oil prices limited the downside. Traders also remain concerned about the raging spread of the coronavirus omicron variant across the globe and its impact on the pace of economic recovery from the pandemic.

Back home, gems and jewellery related stocks were in focus as the commerce ministry said gems and jewellery exports rose by 71 per cent during April-December 2021 to $28.9 billion as compared to $16.9 billion in the same period of the previous year. 

The BSE Sensex is currently trading at 56775.27, down by 1082.88 points or 1.87% after trading in a range of 56674.51 and 57317.38. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.93%, while Small cap index was down by 1.01%.

The top losing sectoral indices on the BSE were Consumer Durables down by 2.98%, Realty down by 2.45%, IT down by 2.20%, Metal down by 2.07%, TECK down by 2.06%, while there was no gainer on BSE sectoral front.

The only gainers on the Sensex were Maruti Suzuki up by 0.40% and Axis Bank up by 0.06%. On the flip side, Titan Company down by 4.03%, Tata Steel down by 3.44%, HCL Technologies down by 2.90%, Bajaj Finance down by 2.87% and HDFC down by 2.81% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its latest update of World Economic Outlook has cut India's economic growth forecast to 9 per cent for the current fiscal year ending March 31 (FY22) from its earlier projection of a 9.5 per cent GDP growth, on concerns over the impact of a spread of new variant of coronavirus on business activity and mobility. The Indian economy had contracted by 7.3 per cent in the 2020-21 fiscal year. As per the report, the agency put the forecast for the next fiscal FY23 (April 2022 to March 2023) at 7.1 per cent. According to the IMF, India's prospects for 2023 are marked up on expected improvements to credit growth and, subsequently, investment and consumption, building on better-than-anticipated performance of the financial sector.

The IMF said that global growth is expected to moderate from 5.9 in 2021 to 4.4 per cent in 2022, half a percentage point lower for 2022 than in the October WEO, largely reflecting forecast markdowns in the two largest economies -- the US and China. It said a revised assumption removing the Build Back Better fiscal policy package from the baseline, earlier withdrawal of monetary accommodation, and continued supply shortages produced a downward 1.2 percentage-point revision for the United States.

In China, pandemic-induced disruptions related to the zero-tolerance COVID-19 policy and protracted financial stress among property developers have induced a 0.8 percentage-point downgrade. The global growth is expected to slow to 3.8 per cent in 2023. The report said ‘Although this is 0.2 percentage point higher than in the previous forecast, the upgrade largely reflects a mechanical pickup after current drags on growth dissipate in the second half of 2022. The forecast is conditional on adverse health outcomes declining to low levels in most countries by end-2022, assuming vaccination rates improve worldwide and therapies become more effective’.

The CNX Nifty is currently trading at 16960.05, down by 317.90 points or 1.84% after trading in a range of 16927.85 and 17073.15. There were 3 stocks advancing against 47 stocks declining on the index.

The few gainers on Nifty were ONGC up by 1.91%, Cipla up by 1.63% and Maruti Suzuki up by 0.97%. On the flip side, Titan Company down by 4.06%, Tata Steel down by 3.59%, Bajaj Finance down by 3.01%, Bajaj Finserv down by 2.95% and HCL Technologies down by 2.72% were the top losers.

Asian markets are trading in red; Nikkei 225 declined 814.48 points or 3.02% to 26,196.85, Straits Times fell 20.01 points or 0.61% to 3,251.56, Hang Seng plunged 642.83 points or 2.65% to 23,647.07, KOSPI slipped 90.27 points or 3.33% to 2,618.97, Jakarta Composite dropped 3.24 points or 0.05% to 6,597.58 and Shanghai Composite was down by 30.39 points or 0.88% to 3,425.28.