Benchmarks end marginally lower on Thursday

In highly volatile trade, Indian equity benchmarks traded in red for most part of the day and ended marginally lower on Thursday, as geopolitical tensions between Ukraine and Russia remained unabated. Besides, Brent crude prices above $120 per barrel also added to investor woes. Key indices made a gap-down opening, as traders got worried with the Ministry of Commerce & Industry stated that total foreign direct investment (FDI) inflow to India declined to $74.01 billion in the calendar year 2021, which is 15 per cent lower from $87.55 billion recorded in the previous year.  Traders remained cautious with private report stated that domestic banks' share in the overall commercial credit has plunged to a low of 34 per cent in FY2021 from 56 per cent in FY2011 partly due to the pandemic and more because companies are moving away from banks for funds. However, markets pared losses and traded flat with a positive bias in late morning session, as traders took some support with the government data showed that the country’s exports for the first time crossed the $400 billion mark in a fiscal on healthy performance by sectors such as petroleum products, engineering, gems and jewellery, and chemicals.

But, key gauges failed to hold recovery and once again fell into negative terrain in afternoon deals, as Commerce and Industry Minister Piyush Goyal expressed concerns over the country’s bilateral trade and said the government is in continuous dialogue with exporters to address the problems and challenges that are emerging due to the ongoing Russia-Ukraine war and could lead to some kind of disruption in trade.  Meanwhile, the commerce ministry will extend the existing foreign trade policy (FTP) for some more months beyond March 31. Last year in September, the government extended the Foreign Trade Policy 2015-20 till March 31, 2022, due to the COVID-19 pandemic. The present policy came into force on April 1, 2015. The policy provides guidelines related to imports and exports in India.

On the global front, Asian markets ended mixed on Thursday as the conflict between Russia and Ukraine showed no signs of abating and more hawkish comments by Federal Reserve officials on rate hikes dented sentiment. European markets were trading mostly in red as investors assess the risks of rising inflation and faster tightening by the U.S. Federal Reserve. Back home, real estate industry stocks were in focus with a private report that investments in the real estate sector in India are bound to grow by 5-10 per cent in 2022, with the sector poised to hit the pre-pandemic levels of 2019. Stocks related to cement industry remained in watch as ICRA said the cement industry is expected to record an 18-20 per cent volume-based growth and even surpass pre-COVID levels by 6 per cent in the current fiscal. However, it said high input costs on account of inflationary pressure are resulting in a decline in operating margins by 440-480 basis points to around 19.8-20.2 per cent in FY2022. 

Finally, the BSE Sensex fell 89.14 points or 0.15% to 57,595.68 and the CNX Nifty was down by 22.90 points or 0.13% to 17,222.75.     

The BSE Sensex touched high and low of 57,827.99 and 57,138.51, respectively. There were 15 stocks advancing against 14 stocks declining, while 1 stock remains unchanged on the index. 

The broader indices ended in green; the BSE Mid cap index rose 0.34%, while Small cap index was up by 0.16%.

The top gaining sectoral indices on the BSE were Metal up by 1.61%, Energy up by 1.21%, TECK up by 1.13%, Oil & Gas up by 1.13% and IT up by 1.01%, while Bankex down by 1.69%, Consumer Durables down by 1.58%, Finance down by 1.30%, Auto down by 0.54%, Consumer Discretionary down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy's Lab up by 4.90%, Ultratech Cement up by 1.77%, Tech Mahindra up by 1.75%, Reliance Industries up by 1.50% and Tata Steel up by 1.48%. On the flip side, Kotak Mahindra Bank down by 3.09%, Titan Company down by 2.63%, HDFC Bank down by 2.23%, ICICI Bank down by 1.94% and HDFC down by 1.50% were the top losers.

Meanwhile, expressing concerns over the country’s bilateral trade, Commerce and Industry Minister Piyush Goyal has said that the government is in continuous dialogue with exporters to address the problems and challenges that are emerging due to the ongoing Russia-Ukraine war and could lead to some kind of disruption in trade. He said that there are challenges of commodity prices, inflation, disruption in shipping lines, and container shortages.

He said ‘those challenges are there before us and that certainly may lead to some kind of disruption because it is coming along with Covid, which is also rearing its head. But we are completely on top of these issues and are in continuous dialogue and hand holding our exporters on a regular basis’. Bilateral trade between India and Russia stood at $9.4 billion so far this fiscal, against $8.1 billion in 2020-21. The bilateral trade with Ukraine stood at $2.3 billion so far this fiscal, as against $2.5 billion in the last fiscal. He added due to the war, challenges would definitely increase, but ‘we would deal with that’.

About the implementation of India-UAE free trade agreement, Goyal said the UAE has formally ratified the pact. He added ‘it (implementation of the pact) could happen anytime in the next six weeks time’. Talking about the proposed India-Australia trade pact, the minister said negotiations are going on and ‘we are working towards’ concluding the talks for interim trade pact. About the new SEZ law, he said that the ministry will start consultations with stake holders from the next month.

The CNX Nifty traded in a range of 17,291.75 and 17,091.15. There were 22 stocks advancing against 27 stocks declining, while 1 stock remains unchanged on the index. 

The top gainers on Nifty were Dr. Reddy's Lab up by 4.72%, Coal India up by 2.19%, Ultratech Cement up by 1.77%, Hindalco up by 1.72% and JSW Steel up by 1.50%. On the flip side, Kotak Mahindra Bank down by 3.10%, Titan Company down by 2.60%, HDFC Bank down by 2.46%, ICICI Bank down by 1.96% and HDFC down by 1.66% were the top losers.

European markets were trading mostly in red; France’s CAC decreased 20.20 points or 0.31% to 6,561.23 and Germany’s DAX decreased 76.32 points or 0.53% to 14,207.33, while UK’s FTSE 100 increased 4.07 points or 0.05% to 7,464.70.

Asian markets ended mixed on Thursday as more hawkish comments by Federal Reserve officials on interest rate hikes made investors more cautious. Federal Reserve policymakers on Wednesday signaled that they stand ready to take more aggressive action to cool down inflation, including a possible of 50-basis-point interest rate hike at the next policy meeting in May. Meanwhile, ongoing conflict between Russia and Ukraine also weighed on market sentiments. Chinese shares declined amid rising Sino-US tensions after Washington sought to deter China from aiding sanctions-hit Russia. Japanese shares gained after manufacturing data for March showed improvement from the previous month. Data showed that Japan’s Manufacturing Industry PMI rose to 53.2 and the service sector PMI to 48.7. Seoul shares declined after jump in oil prices raised concerns about persistently high inflation.