Post Session: Quick Review

Indian equity benchmarks ended in red terrain on Thursday, with both Sensex and Nifty ending lower by around 1%. Markets made a negative start of the day, impacted with a private report stating 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.

Key indices remained negative during the entire trading session, on the back of negative cues from other Asian markets. Some concerns came after Union Road Transport and Highways Secretary Giridhar Aramane said that India's national highway construction slowed to 28.64 km a day in 2021-22 due to COVID-19 pandemic related disruptions and a longer-than-usual monsoon in some parts of the country.

Markets failed to hold recovery which they have staged in early afternoon deals, as losses got intensified in the last hours of the trading session. Traders got cautious, amid another private report stating that India’s central bank will likely raise its inflation outlook this week to reflect costlier oil, but leave borrowing costs steady and tap other policy tools it’s used before to support an economy facing new risks to recovery.

On the global front, European markets were trading mostly in green as healthcare stocks surged to a record high even though risks from a hawkish Federal Reserve and Washington's new sanctions on Russia kept investors on edge. Asian markets ended mostly lower on Thursday, after Hong Kong's private sector contracted at a sharper pace in March amid lingering COVID-19 disruptions.

Back home, traders failed to get any sense of relief with a working paper by the International Monetary Fund (IMF) stating 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).

The BSE Sensex ended at 59034.95, down by 575.46 points or 0.97% after trading in a range of 58977.35 and 59504.92. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.42%, while Small cap index down by 0.75%. (Provisional)

The top gaining sectoral indices on the BSE were Healthcare up by 0.44%, Bankex up by 0.06%, Realty up by 0.03% and FMCG up by 0.02%, while Oil & Gas down by 2.59%, Energy down by 2.28%, Consumer Durables down by 1.98%, Utilities down by 1.54% and Power down by 1.47% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Axis Bank up by 2.38%, ICICI Bank up by 1.12%, Hindustan Unilever up by 1.09%, Dr. Reddy's Lab up by 0.87% and Mahindra & Mahindra up by 0.82%. On the flip side, Titan Co down by 3.24%, HDFC down by 2.91%, HDFC Bank down by 2.19%, Wipro down by 2.13% and TCS down by 1.90% were the top losers. (Provisional)

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has maintained a neutral outlook for the corporate healthcare for FY23 and the same neutral outlook has been kept for the hospital sub-sector, on the account of robust demand drivers, a strong improvement in profitability, and calibrated capacity enhancement capex which together support a comfortable liquidity position and aid in sustaining the credit profile improvement.

As per the report ‘FY23 Corporate Healthcare Outlook’, normalisation of international travel restrictions can lead to a recovery in international patient revenue. Given that the operating procedures have been standardised across hospitals during the past two years of COVID-19, any intermittent local lockdowns owing to the resurgence of infections are unlikely to impact the hospitals significantly. With most of the sector players having expansion plans, the sector is likely to remain exposed to competition, leading to a longer gestation period in ramping-up operations at greenfield facilities.

Ind-Ra further noted that the outlook for the diagnostic companies’ sub-sector is also neutral for FY23, supported by a recovery in non-COVID-19 related revenue and a moderate demand for COVID-19 tests, robust cash generation and strong credit profiles. While increasing competition and acquisition-led expansion could compress margin, the headroom available to absorb shocks remains comfortable.

The CNX Nifty ended at 17639.55, down by 168.10 points or 0.94% after trading in a range of 17623.70 and 17787.50. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were Axis Bank up by 2.38%, Divi's Lab up by 1.40%, Hindustan Unilever up by 1.06%, Dr. Reddy's Lab up by 0.95% and ICICI Bank up by 0.94%. On the flip side, Adani Ports & SEZ down by 3.82%, Titan Co down by 3.22%, HDFC down by 2.89%, ONGC down by 2.29% and Power Grid Corp down by 2.24% were the top losers. (Provisional)

European markets were trading mostly in green, France’s CAC increased 11.23 points or 0.17% to 6,510.06 and Germany’s DAX was up by 10.80 points or 0.08% to 14,162.49. On the flip side, UK’s FTSE 100 was down by 27.84 points or 0.37% to 7,559.86.

Asian markets ended mostly lower on Thursday, tracking weakness in US stocks overnight following surge in bond yields with expectations that the US central bank will hike interest rates by a hefty 50 basis points at its meetings in May and June. Meanwhile, a slew of US central bank officials, including St. Louis Fed President James Bullard, Atlanta Fed President Raphael Bostic and Chicago Fed President Charles Evans are scheduled to speak at separate events later in the day. Moreover, worries over the war in Ukraine also adding pressure on market sentiments. Chinese shares declined as the country’s worst coronavirus outbreak clouded the economic growth outlook, despite pledges by Chinese authorities to roll out more policy support.