Sensex, Nifty add huge losses in late morning session

Indian equity benchmarks added huge losses in late morning session, with both sensex and Nifty trading in deep red. Negative cues from other Asian markets impacted sentiments over the Street. Domestic sentiments remained cautious, as Crisil in its latest report has warned that the Russian invasion of Ukraine, and the flurry of punitive sanctions imposed on the former by the US and European nations, have the potential to cull India's imports on one hand and also lead to input cost pressure on downstream companies in India Inc. Traders also got worried, after Union Revenue Secretary Tarun Bajaj urged the Customs department to be cautious following an increase in drug hauls effected in ports and airports across the country. Noting that the Customs has also been working relentlessly on intelligence, Bajaj said things like gold, drugs, red sanders, and wildlife have been coming to the borders as reflected in a large number of seizures in the past year. Adding more worries, rating agency Icra said that the ongoing conflict between Ukraine and Russia will burden domestic steelmakers with high input costs.

On the global front, Asian markets were trading mostly in red, after the value of overall bank lending in Japan was up 0.4 percent on year in February, the Bank of Japan said on Tuesday - coming in at 580.048 billion yen. That follows the downwardly revised 0.5 percent increase in January (originally 0.6 percent).

The BSE Sensex is currently trading at 52417.25, down by 425.50 points or 0.81% after trading in a range of 52407.61 and 53024.21. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.01%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were IT up by 1.87%, TECK up by 1.68%, Healthcare up by 0.51%, Power up by 0.42% and Utilities up by 0.24%, while Metal down by 2.21%, Bankex down by 2.00%, Auto down by 1.84%, Oil & Gas down by 1.59% and Energy down by 1.40% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 2.65%, Tech Mahindra up by 2.59%, NTPC up by 2.08%, Infosys up by 2.00% and HCL Tech. up by 1.40%. On the flip side, Axis Bank down by 4.50%, Maruti Suzuki down by 3.21%, HDFC down by 3.01%, Tata Steel down by 2.98% and SBI down by 2.95% were the top losers.

Meanwhile, Rating agency ICRA in its latest report has said that the ongoing conflict between Ukraine and Russia will burden domestic steelmakers with high input costs. However, the tension between the countries provides exports opportunities to the Indian steel players. It noted that sanctions on Russia could open new export opportunities for Indian steel mills in geographies like Europe, the Middle East and the USA, which could face supply shortages in the near term.

According to the report, notwithstanding the input cost pressures, the industry earnings are expected to remain healthy in the next 12 months and its outlook for the industry remains positive. It said the domestic steel demand is also pegged to grow at 7-8 per cent in FY23 on the back of an estimated growth of 11-12 per cent in FY2022, supported by the government's large infrastructure spending plans.

It further said after reporting a steep 65-70 per cent sequential increase in the cost of coking coal in Q3 FY22, a further increase of 15 per cent Q-o-Q (quarter-on-quarter) is expected in the fourth quarter. Though the price of iron ore has moderated somewhat from the highs of Q3, and domestic mills have announced some steel price hikes from late January 2022, these will not be able to entirely compensate for the steep rise in coking coal costs. 

The CNX Nifty is currently trading at 15714.10, down by 149.05 points or 0.94% after trading in a range of 15710.05 and 15896.00. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were TCS up by 2.62%, Tech Mahindra up by 2.29%, NTPC up by 2.04%, Infosys up by 1.90% and Cipla up by 1.75%. On the flip side, Axis Bank down by 4.38%, ONGC down by 3.93%, Maruti Suzuki down by 3.22%, Hindalco down by 3.16% and HDFC down by 2.97% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 95.66 points or 0.45% to 20,961.97, Nikkei 225 slipped 350.20 points or 1.39% to 24,871.21, Taiwan Weighted dropped 380.70 points or 2.22% to 16,797.99, KOSPI fell 18.25 points or 0.69% to 2,633.06, Shanghai Composite declined 67.03 points or 1.99% to 3,305.83, Straits Times trembled 23.86 points or 0.75% to 3,163.96 and Jakarta Composite lost 0.13 points to 6,868.94.