Markets trade in red after gap-down opening

Indian equity benchmarks extended their previous session’s losses with gap-down opening on Wednesday tracking weak global cues. Markets are trading in red with cut of over half a percent each in early deals as investors booked profits in banking stocks after recent sharp gains. Sensex and Nifty lost over 450 and 100 points, respectively. Continuous rise in petrol and diesel prices weighed down on the market sentiments. Oil companies increased the price of petrol and diesel in Delhi by 80 paise each, marking the 14th such hike in two weeks. Petrol costs Rs 105.41 and diesel Rs 96.67 per litre after the hike. Some cautiousness also came in with a private report stating that the Reserve Bank of India will delay its first interest rate rise by at least four months to August at the earliest, as the central bank must now start worrying about inflation. Market participants overlooked that Asian Development Bank projected a 7% collective growth for South Asian economies in 2022 with the subregion's largest economy India growing by 7.5% in the current fiscal year before picking up to 8% the next year. Meanwhile, broader indices - BSE Mid & Small cap indices were outperforming larger peers with modest gains.

Global cues remained weak with all the Asian markets trading lower following the broadly negative cues overnight from Wall Street, on concerns about inflation and geopolitical tensions. Traders also were concerned about the outlook for monetary policy following comments from Federal Reserve Governor Lael Brainard. Back home, aviation industry stocks were in focus as the government started discussions with airlines on the removal of price bands for passenger fares.

The BSE Sensex is currently trading at 59703.80, down by 472.70 points or 0.79% after trading in a range of 59694.64 and 59941.57. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.19%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Utilities up by 1.51%, Power up by 1.43%, Telecom up by 1.18%, Oil & Gas up by 1.01%, PSU up by 0.76%, while Bankex down by 1.15%, IT down by 0.83%, Realty down by 0.69%, TECK down by 0.68%, Auto down by 0.64% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.75%, Tata Steel up by 1.44%, Power Grid up by 0.75%, Bharti Airtel up by 0.72% and Larsen & Toubro up by 0.67%. On the flip side, HDFC Bank down by 1.80%, HDFC down by 1.69%, Kotak Mahindra Bank down by 1.52%, Tech Mahindra down by 1.46% and Axis Bank down by 1.29% were the top losers.

Meanwhile, Asian Development Bank (ADB) in its flagship Asian Development Outlook (ADO) 2022 has projected a 7% collective growth for South Asian economies in 2022 before picking up to 7.4% in 2023, with the sub-region's largest economy India growing by 7.5% in the current fiscal year (FY23) and 8% in next fiscal year (FY24).

It said the sub-region's growth dynamics are largely driven by India and Pakistan. Pakistan's growth is forecast to moderate to 4% in 2022 on weaker domestic demand from monetary tightening and fiscal consolidation before picking up to 4.5%in 2023. It said developing Asia's economies are predicted to grow by 5.2% this year and 5.3% in 2023, thanks to a robust recovery in domestic demand and continued expansion in exports.

However, it stated  uncertainties stemming from the Russian invasion of Ukraine, the continuing coronavirus disease (COVID-19) pandemic, and tightening by the United States Federal Reserve pose risks to the outlook’. Developing Asia comprises 46 member countries of ADB by geographic group: the Caucasus and Central Asia, East Asia, South Asia, Southeast Asia and the Pacific. South Asia comprises Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.

The CNX Nifty is currently trading at 17837.65, down by 119.75 points or 0.67% after trading in a range of 17819.15 and 17901.00. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were NTPC up by 2.62%, Coal India up by 2.39%, UPL up by 1.63%, Tata Steel up by 1.27% and BPCL up by 1.08%. On the flip side, HDFC Bank down by 1.84%, HDFC down by 1.72%, Bajaj Auto down by 1.63%, Kotak Mahindra Bank down by 1.51% and Tech Mahindra down by 1.37% were the top losers.

All the Asian markets are trading in red; Nikkei 225 slipped 457.62 points or 1.65% to 27,330.36, Straits Times fell 19.54 points or 0.57% to 3,425.47, Hang Seng plunged 325.76 points or 1.45% to 22,176.55, Taiwan Weighted declined 166.77 points or 0.95% to 17,458.82, KOSPI lost 24.50 points or 0.89% to 2,734.70, Jakarta Composite dropped 41.17 points or 0.58% to 7,107.13 and Shanghai Composite was down by 7.27 points or 0.22% to 3,275.45.