Benchmarks continue to trade in deep red

Indian bourses continued to trade in deep red in the morning session, with the Sensex losing over 1550 points and Nifty falling below the 15800 level, amid weak Asian cues. Selling pressure in the banking, Realty and Auto stocks pressured the markets. The mood on the street got impacted as a private report lowered India’s economy growth forecast to 7.8 per cent for 2022 due to the nation’s exports being impacted by the Russia-Ukraine war and spiking oil prices causing ripple effects. It said rupee is likely to further depreciate against US dollar while soaring commodity prices will push inflation up. Meanwhile, the Goods and Services Tax (GST) Council in its next meeting may look at raising the lowest tax slab to 8 per cent, from 5 per cent, and prune the exemption list in the GST regime as it looks to increase revenues and do away with states' dependence on Centre for compensation.

Asian markets are trading in red, as the war between Russia and Ukraine showed no signs of ebbing and oil soared to as high as $139 a barrel after reports of a possible Western ban of Russian oil. Worries about Ukraine overshadowed the Labor Department report that showed U.S. employment once again jumped by much more than expected in February. Back home, Agriculture industry stocks remained in focus as India’s exports of agricultural items and processed foods rose 23% year on year to $19,709 million during April-January 2021-22, indicating continued robustness of the segment in the country’s exports basket. Besides, stocks related to Footwear and Leather industry also remained in watch as the Department for Promotion of Industry and Internal Trade (DPIIT) has notified continuation of a central sector scheme - Indian Footwear and Leather Development Programme (IFLDP) - with an approved expenditure of Rs 1,700 crore till March 31, 2026.

The BSE Sensex is currently trading at 52770.75, down by 1563.06 points or 2.88% after trading in a range of 52590.49 and 53172.51. There were 1 stocks advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 2.85%, while Small cap index was down by 2.55%.

The top gaining sectoral indices on the BSE were Metal up by 0.45%, IT up by 0.19% and TECK up by 0.01%, while Bankex down by 4.68%, Realty down by 4.48%, Auto down by 4.40%, Capital Goods down by 3.97% and Industrials down by 3.75% were the top losing indices on BSE.

The top gainer on the Sensex was Infosys up by 0.95%. On the flip side, Maruti Suzuki down by 5.80%, Indusind Bank down by 5.73%, Larsen & Toubro down by 5.41%, Axis Bank down by 5.23% and SBI down by 5.18% were the top losers.

Meanwhile, Jayanth R Varma, who is a member of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI), has said the Russia-Ukraine conflict is likely to have adverse effects on both economic growth as well as inflation and policy makers must remain alert and ready to respond rapidly to the emerging situation. Varma said inflation is higher than target, though it is within the tolerance band.

Further, listing challenges faced by the Indian economy, he  said while the economy has yet to recover from the cyclical economic slowdown which began around three years ago, investment has remained subdued during this period, and private consumption has not fully recovered from the pandemic. The economy faces new stresses emanating from geopolitical tensions, he said, adding that inflation is higher than the target though within the tolerance band.

He stated RBI projected 2022-23 inflation to be not much above the target of 4 per cent, but the degree of confidence in this point estimate is quite low, and there is a non-trivial chance of inflation ending up above the tolerance band.  Besides, he noted that the opposite is also true and the possibility of inflation being much lower than the estimate cannot also be ruled out. He pointed out that the reason why it is so difficult to forecast inflation (both in India and globally) is that supply disruptions have been a big contributor to rising prices, and it is hard to say how long these disruptions will last. He said the pandemic shifted demand from contact intensive services to goods.

The CNX Nifty is currently trading at 15795.40, down by 449.95 points or 2.77% after trading in a range of 15750.55 and 15905.95. There were 5 stocks advancing against 45 stocks declining on the index.

The top gainers on Nifty were ONGC up by 4.24%, Hindalco up by 2.91%, Coal India up by 1.57%, Infosys up by 0.85% and Cipla up by 0.08%. On the flip side, Maruti Suzuki down by 5.66%, Indusind Bank down by 5.64%, Hero MotoCorp down by 5.37%, Tata Motors down by 5.28% and Axis Bank down by 5.24% were the top losers.

Asian markets are trading in red; Hang Seng decreased 747.80 points or 3.41% to 21,157.49, Nikkei 225 slipped 686.30 points or 2.64% to 25,299.17, Taiwan Weighted dropped 524.18 points or 2.96% to 17,212.34, KOSPI fell 53.54 points or 1.97% to 2,659.89, Shanghai Composite declined 52.22 points or 1.51% to 3,395.43, Straits Times trembled 20.35 points or 0.63% to 3,206.43 and Jakarta Composite lost 55.54 points or 0.8% to 6,872.79.