Benchmarks snap two session gaining streak on Wednesday

Indian equity benchmarks snapped two session gaining streak and ended over a per cent lower on Wednesday weighed by automobiles, banking and financial stocks. Additionally, the escalating Ukraine crisis along with rising crude oil prices further weighed on investor sentiment. Markets made negative start and stayed in red for whole day, as India’s economic growth slowed to 5.4 percent in the third quarter of 2021-22 from Gross Domestic Product (GDP) growth of 8.5 percent in the previous quarter (July-September) and 20.3 per cent in April-June quarter. But, the growth is higher than China’s GDP expansion of 4 per cent during the same period and the country retained its position as the world’s fastest growing major economy. Some concern also came as India Ratings said the ongoing geopolitical risks arising from the Russia-Ukraine war would push India's import bills higher for items such as mineral oils and gas, gems and jewellery, edible oils and fertilisers. Investors are eyeing the manufacturing PMI data to be out later in the day.

Benchmarks continued to trade lower in late afternoon deals, as traders remained cautious with data showing that investments in the Indian capital market through Participatory notes (P-notes) dropped to Rs 87,989 crore at the end of January and foreign investors will continue with their negative stance amid the Ukraine crisis. Adding more pessimism, a private report stated that the initial or short term impact of Russia's invasion of Ukraine for India will be experienced through inflationary pressures as the country is dependent on imported oil. However, markets managed to trim some losses, taking support from the survey report stated that Indian manufacturing activity improved in the month of February, as firms responded to strong increases in new work intakes by lifting production, input buying and stocks of purchases. As per the survey report, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) - a composite single-figure indicator of manufacturing performance - surged to 54.9 in February from 54.0 in January.

On the global front, Asian markets ended mostly lower on Wednesday as nervous investors shifted money into bonds amid renewed concerns about Russia's escalating war on Ukraine. It is feared that the Ukraine tensions may push up the commodity prices and peg the global economic recovery.  European markets were trading higher with investors focusing on market bets about UK and euro zone rate hikes amid concerns about the economic impact of the war in Ukraine. Back home, aviation industry stocks were in focus as jet fuel prices were increased by 3.3 per cent to all-time high levels across the country, in step with international oil prices surging to over seven-year-high. There was some reaction in power industry stocks as India’s power consumption growth remained subdued at 2.2 per cent year-on-year in February to 105.54 billion units (BU), showing the impact of local restrictions imposed by the states due to the third wave of COVID-19.

Finally, the BSE Sensex fell 778.38 points or 1.38% to 55,468.90 and the CNX Nifty was down by 187.95 points or 1.12% to 16,605.95.

The BSE Sensex touched high and low of 55,755.09 and 55,020.10, respectively. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.17%, while Small cap index was down by 0.12%.

The top gaining sectoral indices on the BSE were Metal up by 4.58%, Energy up by 1.73%, Utilities up by 1.52%, Power up by 1.38% and Basic Materials up by 1.07%, while Auto down by 2.87%, Bankex down by 2.25%, Finance down by 2.07%, Consumer Discretionary down by 1.73% and Telecom down by 1.62% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 5.54%, Titan Company up by 1.88%, Reliance Industries up by 1.67%, Nestle up by 1.06% and Axis Bank up by 1.03%. On the flip side, Maruti Suzuki down by 6.00%, Dr. Reddy's Lab down by 5.14%, Asian Paints down by 4.53%, ICICI Bank down by 3.74% and HDFC down by 3.70% were the top losers.

Meanwhile, India’s economic growth slowed to 5.4 percent in the third quarter of 2021-22 from Gross Domestic Product (GDP) growth of 8.5 percent in the previous quarter (July-September) and 20.3 per cent in April-June quarter. But, the growth is higher than China’s GDP expansion of 4 per cent during the same period and the country retained its position as the world’s fastest growing major economy. The National Statistical Office (NSO) in its second advance estimates of national accounts pegged the country’s growth for 2021-22 at 8.9 percent, a tad lower than 9.2 percent estimated in its first advance estimates released in January.

Data released by the NSO showed that GDP at Constant (2011-12) Prices in Q3 of 2021-22 is estimated at Rs 38.22 lakh crore, as against Rs 36.26 lakh crore in Q3 of 2020-21, showing a growth of 5.4 per cent. Nominal GDP or GDP at Current Prices in the year 2021-22 is estimated to attain a level of Rs 236.44 lakh crore, as against Rs 198.01 lakh crore in 2020-21, showing a growth rate of 19.4 percent.

Gross Value Added (GVA) growth in the manufacturing sector growth remained almost flat at 0.2 per cent in the third quarter of 2021-22, compared to a growth 8.4 per cent a year ago. Farm sector GVA growth was slow at 2.6 per cent in the third quarter compared to 4.1 per cent growth a year ago. Construction sector GVA declined by 2.8 per cent as against a growth of 6.6 per cent a year ago. Mining sector grew by 8.8 per cent, as against a contraction of 5.3 per cent.

Electricity, gas, water supply and other utility services segment posted a growth of 3.7 per cent in the third quarter of this fiscal against 1.5 per cent expansion a year ago. Similarly, trade, hotel, transport, communication and services related to broadcasting grew by 6.1 per cent compared to 10.1 per cent contraction a year ago. Financial, real estate and professional services growth stood at 4.6 per cent in Q3 FY22 compared to a growth of 10.3 per cent a year ago. Public administration, defence and other services grew at 16.8 per cent during the quarter under review compared to 2.9 per cent contraction a year earlier.

The CNX Nifty traded in a range of 16,678.50 and 16,478.65. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Coal India up by 8.52%, HDFC Life Insurance up by 7.03%, SBI Life Insurance up by 5.65%, Tata Steel up by 5.57% and Hindalco up by 4.34%. On the flip side, Maruti Suzuki down by 6.00%, Dr. Reddy's Lab down by 5.15%, Bajaj Auto down by 4.62%, Asian Paints down by 4.21% and Hero MotoCorp down by 4.08% were the top losers.

European markets were trading higher;  UK’s FTSE 100 increased 48.38 points or 0.66% to 7,378.58, France’s CAC increased 25.00 points or 0.39% to 6,421.49 and Germany’s DAX increased 52.98 points or 0.38% to 13,957.83.

Asian markets ended mostly lower on Wednesday as nervous investors shifted money into bonds amid renewed concerns about Russia's escalating war on Ukraine. It is feared that the Ukraine tensions may push up the commodity prices and peg the global economic recovery. Meanwhile, in his first State of the Union address, U.S. president Joe Biden said that Russian president Vladimir Putin badly miscalculated with his invasion of Ukraine. Japanese shares ended lower, with electrical machinery and transport stocks leading losses amid increasing risks of a global recession.