Benchmarks trim opening gains; trade flat in early deals

Indian equity benchmarks made positive start on Tuesday rebounding from near one-month closing lows in previous session. But, soon markets trimmed most of their gains and are trading flat in early deals dragged by index heavyweight HDFC twin and Infosys amid mixed global cues. Initially, markets took some support with the commerce department’s preliminary data showing that India exported goods worth $18.79 billion during the first two weeks of April, up 37 per cent compared to the same period last year, as external demand continued to remain robust. Excluding petroleum products, the growth in this period was 23.64 per cent over the same period of 2021-22. Though, soon traders turned cautious as flagging risks of disruptive spillovers from geopolitical hostilities, an RBI article said India faces these challenges from a position of strength built on broadened vaccine coverage, financial sector resilience and robust exports. Also, the International Monetary Fund (IMF) warned that the debt piled on by the private sector during the coronavirus pandemic could lower growth for emerging markets by 1.3 percent over three years.

Most of the Asian markets traded higher despite a sluggish session on Wall Street overnight. Gains in markets were limited with investors weighing China's measures to cushion an economic slowdown and the prospect of aggressive Federal Reserve monetary policy tightening. Investors are also bracing for a barrage of earnings that will help them assess the impact of the Ukraine war and a spike in inflation on company financials.

Back home, the aviation industry stocks were in focus as Civil Aviation Minister Jyotiraditya Scindia expressed confidence about India's aviation industry getting back to the normal pre-pandemic level. The aviation industry of India touched over four lakh domestic passengers in a day on April 18, 2022. In scrip specific development, Ashok Leyland edged up after it tied up with Mahindra First Choice Wheels to enter the used commercial vehicle business.

The BSE Sensex is currently trading at 57120.04, down by 46.70 points or 0.08% after trading in a range of 57027.86 and 57459.89. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.52%, while Small cap index was up by 0.74%.

The top gaining sectoral indices on the BSE were Metal up by 1.81%, Oil & Gas up by 1.23%, Energy up by 1.19%, Basic Materials up by 1.07%, Utilities up by 0.98%, while TECK down by 0.50%, IT down by 0.34%, Realty down by 0.25%, Telecom down by 0.21%, Capital Goods down by 0.15% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.68%, SBI up by 1.06%, Reliance Industries up by 1.03%, Axis Bank up by 1.02% and ICICI Bank up by 0.98%. On the flip side, HDFC down by 2.32%, HDFC Bank down by 1.90%, Infosys down by 1.19%, Dr. Reddy's Lab down by 0.56% and Bharti Airtel down by 0.50% were the top losers.

Meanwhile, an Reserve Bank of India (RBI) article on 'State of the Economy', published in the April 2022 RBI Bulletin, has flagged risks of disruptive spillovers from geopolitical hostilities and said India faces these challenges from a position of strength built on broadened vaccine coverage, financial sector resilience and robust exports and remittances and fiscal reprioritisation to spur capital spending on infrastructure. The article said India enters Samvat 2079 having crested the third wave of the pandemic with economic activity returning to speed in several sectors.

However, these gains are at risk from disruptive spillovers from geopolitical hostilities as increasingly evident in inflation prints, tightening financial conditions and a terms of trade shock accompanied by portfolio outflows. It pointed out that going forward, spurring private investment remains a key thrust area for sustaining growth on a durable basis. However, it said views expressed in the article are those of the authors and do not necessarily represent the opinion of the central bank.

It said the near-term global outlook appears grim, caught up in a vortex of geopolitical risks materialising rapidly, strained supply chains and the quickening pace of monetary policy normalisation. It added that the Indian economy is not immune to these negative externalities. The surge in commodity prices is already posing inflation risks, especially through the conduit of surging imports. Rapidly widening trade and current account deficits co-existing with portfolio capital outflows weigh on external sustainability, although the strength of underlying fundamentals and the stock of international reserves provide buffers.

The CNX Nifty is currently trading at 17184.20, up by 10.55 points or 0.06% after trading in a range of 17152.60 and 17275.65. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 2.29%, Coal India up by 2.19%, Eicher Motors up by 2.02%, Tata Steel up by 1.75% and UPL up by 1.73%. On the flip side, HDFC down by 2.35%, HDFC Bank down by 1.90%, Infosys down by 1.06%, SBI Life Insurance down by 0.76% and Dr. Reddy's Lab down by 0.49% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 jumped 171.38 points or 0.64% to 26,971.09, Straits Times advanced 18.67 points or 0.57% to 3,321.74, Taiwan Weighted rose 130.95 points or 0.77% to 17,029.82, KOSPI added 27.26 points or 1.01% to 2,720.47 and Shanghai Composite edged up by 3.78 points or 0.12% to 3,199.30. On the other hand, Hang Seng slipped 388.56 points or 1.81% to 21,129.52 and Jakarta Composite was down by 54.74 points or 0.75% to 7,220.55.