Markets trade tad lower in early deals after positive opening

Indian equity benchmarks made slightly positive start on Friday tracking overnight gains on Wall Street, but failed to hold the momentum and soon slipped below natural lines. Markets are trading lower with cut of around 0.15% each in early deals on account of selling in Consumer Durables stocks. Traders got concerned as India’s projected economic growth for 2022 has been downgraded by over 2 per cent to 4.6 percent by the United Nations, a decrease attributed to the ongoing war in Ukraine, with New Delhi expected to face restraints on energy access and prices, reflexes from trade sanctions, food inflation, tightening policies and financial instability. Adding some cautiousness, a private report stated that after crossing the $550-billion mark in the first 11 months of the financial year, India’s import bill is set to hit record highs in FY22 and probably touch $600 billion. Meanwhile, the Income Tax department said it has issued refunds of over Rs 1.93 lakh crore to over 2.26 crore taxpayers till March 20 this fiscal.

Most of the Asian markets are trading lower despite the broadly positive cues overnight from Wall Street. Traders kept an eye on developments out of Europe, where President Joe Biden is meeting with U.S. allies in Brussels after imposing additional sanctions against Russia. Traders are also concerned amid rising Sino-U.S. tensions after Washington sought to deter Beijing from aiding sanctions-hit Russia.

Back home, OMCs were under pressure after Moody’s Investors Service said state-run fuel retailers IOC, BPCL and HPCL have together lost around $2.25 billion (Rs 17,000 crore) in revenue between November and March third week by keeping petrol and diesel prices unchanged despite a sharp rise in crude oil prices. In scrip specific development, market heavyweight Reliance Industries was in focus after the government selected Reliance New Energy Solar among other companies for investment under the Rs 18,100 crore production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage.

The BSE Sensex is currently trading at 57492.81, down by 102.87 points or 0.18% after trading in a range of 57391.49 and 57845.37. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.22%, while Small cap index was up by 0.53%.

The top gaining sectoral indices on the BSE were Realty up by 0.95%, Metal up by 0.84%, Telecom up by 0.83%, Oil & Gas up by 0.75%, Energy up by 0.67%, while Consumer Durables down by 1.26%, FMCG down by 0.29%, IT down by 0.28%, TECK down by 0.23%, Consumer discretionary down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 0.97%, SBI up by 0.80%, Bharti Airtel up by 0.76%, Kotak Mahindra Bank up by 0.50% and Reliance Industries up by 0.32%. On the flip side, Titan Company down by 2.57%, Maruti Suzuki down by 1.63%, Tech Mahindra down by 1.27%, Asian Paints down by 0.95% and Nestle down by 0.71% were the top losers.

Meanwhile, the UN Conference on Trade and Development (UNCTAD) in its latest report has downgraded India’s economic growth by over 2 per cent to 4.6 percent for 2022 from earlier forecast of 6.7 percent. A decrease has been attributed to the ongoing war in Ukraine, with New Delhi expected to face restraints on energy access and prices, reflexes from trade sanctions, food inflation, tightening policies and financial instability. The report also downgraded its global economic growth projection for 2022 to 2.6 percent from 3.6 percent due to shocks from the Ukraine war and changes in macroeconomic policies that put developing countries particularly at risk.

The report said while Russia will experience a deep recession this year, significant slowdowns in growth are expected in parts of Western Europe and Central, South and South-East Asia. The report said as some of the other economies in South and Western Asia may gain some benefits from fast growth of demand and prices of energy, they will be hampered by the adversities in primary commodity markets, especially food inflation, and will be further hit by inherent financial instabilities.

It said India in particular will face restraints on several fronts: energy access and prices, primary commodity bottlenecks, reflexes from trade sanctions, food inflation, tightening policies and financial instability. The report has downgraded the GDP growth of the US from three per cent to 2.4 per cent. China will also see growth decrease to 4.8 per cent from 5.7 per cent. The report projects a deep recession for Russia, with growth decelerating from 2.3 per cent to -7.3 per cent. The report said the Russian economy faces stringent external constraints imposed by the sanctions.

The UNCTAD said the added pressure of price increases is intensifying calls for a policy response in advanced economies, including on the fiscal front, threatening a sharper than expected slowdown in growth. Soaring food and fuel prices will have an immediate effect on the most vulnerable in developing countries, resulting in hunger and hardship for households who spend the highest share of their income on food. But the loss of purchasing power and real spending will ultimately be felt by everyone. It said the danger for many of the developing countries that are heavily reliant on food and fuel imports is more profound as higher prices threaten livelihoods, discourage investment and raise the spectre of widening trade deficits.

The CNX Nifty is currently trading at 17201.75, down by 21.00 points or 0.12% after trading in a range of 17169.25 and 17294.90. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 1.13%, Tata Steel up by 1.07%, Bajaj Auto up by 1.01%, Bharti Airtel up by 0.76% and UPL up by 0.76%. On the flip side, Titan Company down by 2.53%, Tata Consumer Products down by 2.19%, Maruti Suzuki down by 1.44%, Tech Mahindra down by 1.16% and Asian Paints down by 0.77% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 lost 71.35 points or 0.25% to 28,039.04, Hang Seng slipped 421.40 points or 1.92% to 21,524.55, Taiwan Weighted fell 28.84 points or 0.16% to 17,670.22, KOSPI decreased 1.48 points or 0.05% to 2,728.18, Jakarta Composite declined 61.91 points or 0.88% to 6,987.78 and Shanghai Composite was down by 15.22 points or 0.47% to 3,235.04, while Straits Times rose 16.07 points or 0.47% to 3,415.77.