Domestic indices trade under pressure in early deals amid weak global cues

Indian equity benchmarks made gap-down opening on Friday as global mood turned sour overnight. Federal Reserve Chairman Jerome Powell suggested the US central bank would move aggressively to curb inflation. Markets are trading lower with cut of around a percent each in early deals due to selling in Bankex, Auto and Realty, which are down by around a percent each. Rising crude oil prices also added pressure on domestic markets. Crude oil prices rose buffeted by concerns about tightened supply as the European Union mulls a potential ban on Russian oil imports that would further restrict worldwide oil trade. Adding more pessimism, foreign institutional investors (FII) net sold Indian shares worth Rs 713.7 crore -- a tenth straight day of outflow for the Street. Meanwhile, an Emirati minister said the historic Comprehensive Economic Partnership Agreement between India and the UAE will come into effect on May 1. The agreement will provide significant benefits to Indian and UAE businesses, including enhanced market access and reduced tariffs.

Most of the Asian markets are trading lower tracking a sell-off on Wall Street overnight, driven by hawkish comments from US Federal Reserve Chief Jerome Powell that signaled prospects of faster and sharper interest rate hikes, including a 50-basis points raise. Meanwhile, the Ministry of Internal Affairs and Communications said overall consumer prices in Japan climbed 1.2 percent on year in March. Back home, steel stocks are in focus as Steel Minister Ram Chandra Prasad Singh said India produced 120 million tonne (MT) of crude steel during financial year ended March 31, 2022. At 120 MT, the output was about 18 per cent higher compared to the country's production in the preceding fiscal year. In scrip specific development, HCL Technologies rallied after more than tripling its Q4 profit. However, BPCL fell on reports the government may revise the terms of sale for its privatization.

The BSE Sensex is currently trading at 57389.36, down by 522.32 points or 0.90% after trading in a range of 57244.83 and 57531.95. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.22%, while Small cap index was up by 0.10%.

The top gaining sectoral indices on the BSE were IT up by 0.15%, Industrials up by 0.12%, Utilities up by 0.06%, Power up by 0.05%, Telecom up by 0.01%, while Bankex down by 1.41%, Auto down by 1.36%, Realty down by 0.95%, Healthcare down by 0.83%, Metal down by 0.79% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Technologies up by 2.72%, Tech Mahindra up by 0.56%, Bharti Airtel up by 0.40%, Wipro up by 0.29% and Power Grid up by 0.24%. On the flip side, Dr. Reddy's Lab down by 2.06%, SBI down by 2.04%, Mahindra & Mahindra down by 1.90%, Kotak Mahindra Bank down by 1.67% and Indusind Bank down by 1.46% were the top losers.

Meanwhile, the International Monetary Fund’s (IMF’s) Mission Chief for India Nada Choueiri has said that the successful macroeconomic management of the Covid-19 pandemic has resulted in a strong recovery of India’s economy because of which the country is in a better position to face the economic fallout of the current Ukrainian crisis. Observing that India represents about seven per cent of the total world economy in purchasing power parity (PPP) terms and is one of the countries that are growing rapidly, she said India’s growth is lifting the global economy and is very important for a well-functioning global economy. She added the other important role that India is playing today is in the provision of vaccines. As a significant vaccine producer, India has a role also in managing future pandemics.

Giving her impression about the performance of the Indian economy during this global economic crisis beginning with the Covid-19 pandemic, she said India took important measures on a spectrum of policies. She said ‘we saw sound fiscal management to get things right, to create fiscal space, to respond to the immediate needs of the population. We also saw proactive monetary policy to respond to the needs of the financial system and of the corporate sector to support the liquidity needs during the pandemic’.

In its latest World Economic Outlook, the IMF downgraded its projections from its previous of nine per cent growth for the year 2022 to 8.2 per cent (a drop of 0.8 percentage points) this year. Choueiri explained that this was largely due to the war in Ukraine. Observing that in terms of the Ukraine war a whole slew sets of challenges are coming on top of the pandemic crisis, Choueiri asserted that a number of strengths will help India whether this shock.

Though, she also said India is on a recovery path from the economic fallout of the pandemic. There was a very sharp recession in fiscal year 2021, where GDP declined by 6.6 per cent. And there was a strong recovery from that last year. The estimate for growth for last year is 8.9 per cent. She said ‘This is a strong rebound. And this is despite a very severe second wave, which happened in the first quarter of the financial year that just ended. So, despite that we see a strong recovery having taken place last year and the recovery is still continuing’.

The CNX Nifty is currently trading at 17226.80, down by 165.80 points or 0.95% after trading in a range of 17196.05 and 17253.85. There were 9 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 2.83%, HCL Technologies up by 2.52%, ONGC up by 0.63%, Tech Mahindra up by 0.54% and Coal India up by 0.31%. On the flip side, Hindalco down by 3.59%, Eicher Motors down by 2.32%, Dr. Reddy's Lab down by 2.10%, SBI down by 2.05% and HDFC Life Insurance down by 2.04% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 plunged 494.49 points or 1.79% to 27,058.57, Hang Seng lost 109.91 points or 0.53% to 20,572.31, Taiwan Weighted declined 131.60 points or 0.77% to 16,996.35, KOSPI slipped 28.87 points or 1.06% to 2,699.34, Jakarta Composite dropped 65.30 points or 0.90% to 7,210.89 and Shanghai Composite fell 2.01 points or 0.07% to 3,077.80, while Straits Times was up by 3.23 points or 0.10% to 3,351.69.