Domestic indices likely to start on negative note

Indian markets continued to decline for a second straight day on Wednesday, dragged by the HDFC twins and other private sector financial stocks. Today, markets are likely to start session on a negative note mirroring weak global cues. There will be some cautiousness with a private report that the yield on the 10-year government bond inched up to nearly 7 per cent ahead of the Reserve Bank of India’s (RBI) monetary policy review scheduled for Friday on fears that the central bank may raise the inflation forecast. However, some support may come later in the day as a working paper by the International Monetary Fund (IMF) stated that extreme poverty in India was as low as 0.8% in 2019 and the country managed to keep it at that level in 2020 despite the unprecedented Covid-19 outbreak, by resorting to food transfers through the Pradhan Mantri Garib Kalyan Yojana (PMGKY). Traders may take note of report that the Centre’s gross tax receipts (GTR) grew by as much as a third on year in 2021-22, the sharpest growth in any year in recent decades if not in recorded history, representing an impressive tax buoyancy of 1.6. Meanwhile, Commerce and Industry Minister Piyush Goyal said that India and Australia should look at boosting the bilateral trade to $100 billion by 2030 from the current level of around $27.5 billion. Besides, Capital markets regulator Sebi has issued fresh guidelines for KYC Registration Agencies (KRAs) whereby such agencies will have to independently validate KYC records of all clients from July 1. Agriculture industry stocks will be in focus with report that India’s exports of agricultural products, including marine and plantation products, for 2021-22 hit a record at $50 billion. That was up 20% on year. As per the provisional figures released by DGCIS, the export growth has been achieved mostly because of a surge in shipments of rice, marine products, sugar, buffalo meat, raw cotton and wheat. There will be some reaction in power stocks amid reports of rising electricity consumption in the country. An early onset of summer coupled with rising demand from businesses with Covid-led restrictions being withdrawn across the board also raised the demand for power.

The US markets ended lower on Wednesday after FOMC minutes bring back focus on aggressive tightening of COVID-era monetary policy. Asian markets are trading mostly in red on Thursday following weakness on Wall Street, fuelled by tech and other growth stocks.

Back home, Indian equity benchmarks settled lower for a second straight session on Wednesday tracking weakness across global markets against the backdrop of hawkish comments from US Federal Reserve officials and further sanctions against Russia. Key gauges made a gap-down opening and stayed in red for whole day, as traders got anxious 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. Besides, 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 concern also came with private report stated that foreign portfolio investors dumped Indian shares worth record Rs 1.4 lakh crore in the financial year 2021-22, after pumping in whopping Rs 2.7 lakh crore in the preceding fiscal, mainly on account of sharp surge in coronavirus cases, concerns over the risk to economic recovery and global turmoil triggered by Russia-Ukraine war. Traders failed to get any sense of relief with a private survey showed India's services sector expanded at its fastest pace so far this year in March as an easing of COVID-19 restrictions boosted demand, but elevated inflationary pressures clouded business confidence. The S&P Global India Services Purchasing Managers' Index rose to 53.6 in March from 51.8 in February. The index remained above the 50-mark separating growth from contraction for an eighth straight month, input costs rose at the sharpest pace in 11 years.  Market participants overlooked report 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. Finally, the BSE Sensex fell 566.09 points or 0.94% to 59,610.41 and the CNX Nifty was down by 149.75 points or 0.83% to 17,807.65.