Benchmarks trade deeply in red after gap-down opening; IT stocks crash

Indian equity markets started session with deep cuts on Monday as large-caps Infosys and HDFC twins opened sharply lower on disappointing Q4 earnings. Trading activity resumed after a four-day holiday weekend as markets were shut on April 14 on account of Mahavir Jayanti and Dr Baba Saheb Ambedkar Jayanti and on April 15 for Good Friday. Indices are trading lower with around one and half a percent cut in early deals mainly due to selling in IT and TECK stocks. Sentiments got dented as the World Bank cut its economic growth forecast for India and the whole South Asian region, citing worsening supply bottlenecks and rising inflation risks caused by the Ukraine crisis. The international lender lowered its growth estimate for India to 8% from 8.7% for the current fiscal year to March, 2023. Meanwhile, a private report stated that a normal monsoon season this year is expected to mitigate some inflationary pressures, especially being witnessed in certain food commodities. In terms of predictions, both Skymet and IMD have given a forecast for a 'normal' Southwest Monsoon for the current year at 99 per cent and 98 per cent of the long period average (LPA) respectively. Investors are eyeing the wholesale-price index (WPI) reading for March that to be announced later in the day.

Weak global cues also added pressure on domestic indices with most of the Asian markets trading lower as higher oil prices and Treasury yields stoked worries about inflation and investors awaited the release of Chinese GDP data as well as monthly activity figures for March. Meanwhile, Shanghai has reported its first death due to Covid-19 ever since lockdown was re-imposed to contain the outbreak of the deadly virus in the city. Market in Hong Kong is closed for Easter holiday. Back home, coal industry stocks were in focus as Coal minister Pralhad Joshi said the country's coal production grew 8.5 per cent to a record 777.23 million tonnes (MT) in FY22. In scrip specific development, Tata Steel traded higher amid reports that the company is likely to consider a stock split on May 3.

The BSE Sensex is currently trading at 57305.66, down by 1033.27 points or 1.77% after trading in a range of 57152.75 and 57420.80. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index plunged 1.03%, while Small cap index was down by 0.80%.

The only gaining sectoral indices on the BSE were Metal up by 0.45% and FMCG up by 0.06%, while IT down by 4.14%, TECK down by 4.10%, Bankex down by 1.62%, Telecom down by 1.52%, Capital Goods down by 1.24% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.31%, Tata Steel up by 1.96%, Maruti Suzuki up by 0.76%, Mahindra & Mahindra up by 0.70% and Power Grid Corp up by 0.63%. On the flip side, Infosys down by 6.69%, Tech Mahindra down by 4.49%, HDFC down by 3.05%, TCS down by 2.94% and HDFC Bank down by 2.69% were the top losers.

Meanwhile, with economic reforms and ease of doing business in recent years, industry body PHD Chamber of Commerce and Industry (PHDCCI) has said that India is expected to attract $100 billion foreign direct investment (FDI) in 2022-23. It also said the current financial year is expected to attain a GDP growth of more than 8 per cent.

However, it said the inflation scenario has been stoked by rising international commodity prices, particularly of crude oil. It has suggested a ten-pronged strategy to strengthen the economic growth and achieve the target of becoming a $5 trillion economy in next five years.

It noted that the suggestions include speedy infrastructure investments, inclusion of more sectors under the PLI scheme, increase in public investments in agriculture sector, addressing the high commodity prices and shortages of raw materials.

The CNX Nifty is currently trading at 17229.70, down by 245.95 points or 1.41% after trading in a range of 17160.70 and 17237.75. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were NTPC up by 3.31%, Tata Steel up by 2.06%, ONGC up by 1.66%, Divi's Lab up by 1.48% and Coal India up by 1.29%. On the flip side, Infosys down by 6.69%, Tech Mahindra down by 4.48%, HDFC down by 3.14%, TCS down by 3.00% and Wipro down by 2.66% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 402.55 points or 1.49% to 26,690.64, Straits Times declined 22.15 points or 0.66% to 3,313.70, Taiwan Weighted lost 96.30 points or 0.57% to 16,907.88 and Shanghai Composite was down by 24.89 points or 0.78% to 3,186.35. On the other hand, KOSPI rose 4.87 points or 0.18% to 2,700.93 and Jakarta Composite added 29.53 points or 0.41% to 7,265.06.