Sensex, Nifty turn negative in late morning session

Indian equity benchmarks turned negative in late morning session, with both Sensex and Nifty trading in red terrain, on the back of negative cues from other Asian markets. Traders got worried, amid a private report stating that after the record USD 23 billion of additional investments in the domestic equities in FY21, foreign funds have massively slashed their fresh exposure to the country to USD 3.7 billion in FY22, also pairing down their holdings in NSE500 to 19.9 per cent or worth USD 582 billion, down from their peak of 21.4 per cent. Domestic sentiments also remained downbeat, as India Ratings and Research (Ind-Ra) lowered India’s Gross Domestic Product (GDP) growth forecast to 7-7.2 per cent for FY23, from 7.6 per cent projected earlier, citing the rising uncertainty over Russia-Ukraine war and the resultant dampening of consumer sentiment.

On the global front, Asian markets were trading mostly in red, after China's manufacturing and service sectors contracted in March due to the lockdown. The survey results from the National Bureau of Statistics showed that the non-manufacturing Purchasing Managers' Index fell to 48.4 in March from 51.6 in February. A score below 50.0 indicates contraction in the sector. Similarly, the manufacturing PMI came in at 49.5, down from 50.2 in the previous month.

The BSE Sensex is currently trading at 58660.12, down by 23.87 points or 0.04% after trading in a range of 58620.78 and 58890.92. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.38%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were Telecom up by 1.52%, Oil & Gas up by 0.78%, Utilities up by 0.74%, Power up by 0.72% and FMCG up by 0.64%, while Healthcare down by 0.44%, TECK down by 0.24%, Capital Goods down by 0.14% and IT down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.83%, Bajaj Finance up by 1.05%, Axis Bank up by 0.97%, Asian Paints up by 0.96% and Hindustan Unilever up by 0.87%. On the flip side, Reliance Industries down by 1.19%, Bharti Airtel down by 1.01%, Infosys down by 0.89%, Wipro down by 0.74% and Power Grid down by 0.42% were the top losers.

Meanwhile, Rating agency Crisil in its latest report has said that the revenue of gold jewellery retailers is likely to increase by 12-15 per cent in 2022-23 on steady demand and sustained high prices of gold. It said during 2021-22, revenue of gold jewellery retailers is expected to rise 20-22 per cent albeit on a lower base of the pandemic-impacted last fiscal year.

According to the report, operating margins should improve 50-70 basis points (bps) year-on-year to 7.3-7.5 per cent in fiscal 2023, because of elevated gold prices and improved operating leverage. Consequently, operating profits will rise 12-15 per cent next fiscal year, resulting in better debt metrics. That will keep the credit outlook for organised jewellers 'stable' next fiscal year, despite higher capital spending and inventory.

The report further said while operating profitability is expected to moderate to 6.5-7 per cent this fiscal due to limited inventory gains, and more expenditure on rentals, employees and advertisement, higher operating leverage will help restore margins to the pre-pandemic levels of 7.3-7.5 per cent next fiscal year. With demand stabilising, it said business expansion will gather pace next fiscal year to the pre-pandemic levels of Rs 200-250 crore per annum.

The CNX Nifty is currently trading at 17488.15, down by 10.10 points or 0.06% after trading in a range of 17486.40 and 17559.80. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 1.76%, JSW Steel up by 1.76%, Hero MotoCorp up by 1.66%, Britannia up by 1.42% and Tata Consumer Products up by 1.26%. On the flip side, Hindalco down by 3.87%, Apollo Hospital Ent. down by 1.72%, Divi's Lab down by 1.30%, UPL down by 1.19% and Reliance Industries down by 1.18% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 179.54 points or 0.81% to 22,052.49, Nikkei 225 slipped 117.91 points or 0.42% to 27,909.34, Taiwan Weighted dropped 15.19 points or 0.09% to 17,725.37, Straits Times trembled 7.80 points or 0.23% to 3,434.81 and Shanghai Composite declined 3.41 points or 0.1% to 3,263.19. On the flip side, KOSPI rose 10.62 points or 0.39% to 2,757.36 and Jakarta Composite soared 14.39 points or 0.2% to 7,067.58.