Domestic indices trade deeply in red; Nifty slips below 17K mark

Indian equity benchmarks extended their previous session’s losses with gap-down opening on Monday tracking downbeat global sentiment. Markets are trading deeply in red with cut of over a percent each in early deals due to selling in all the sector indices led by Realty, Metal and IT, which are down by over 2% each. Traders were concerned as India's crude oil import bill nearly doubled to $119 billion in the fiscal year that ended on March 31, as energy prices soared globally following the return of demand and war in Ukraine. Some cautiousness came in as the Centre for Monitoring of Indian Economy stated that India’s labour force fell by 38 lakhs in the month of March to the lowest level in the last eight months, comprising a decline in the count of both employed and unemployed. Also, a private report cut India's 2022-23 economic growth forecast by 70 basis points to 7 percent, citing slowing global growth due to high commodity prices, and weak local demand because of energy price hikes, inflationary pressures and a struggling labour market.

On the global front, all the Asian markets are trading lower following the broadly negative cues from Wall Street on Friday, extending the sell-off amid rising prospects of sharper interest rate hikes by the US Federal Reserve in the near term after comments by US Fed Chair Powell that indicated the US central bank was preparing a 50 bps interest rate hike at its May meeting. Back home, power stocks were in focus with report that the current power crisis is mainly on account of sharp decline in electricity generation from different fuel sources and not due to non-availability of domestic coal. In scrip specific development, Mahindra CIE Automotive gained ahead of its Q4 results later today.

The BSE Sensex is currently trading at 56607.01, down by 590.14 points or 1.03% after trading in a range of 56412.14 and 56760.66. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.50%, while Small cap index was down by 1.37%.

The top losing sectoral indices on the BSE were Realty down by 3.00%, Metal down by 2.75%, IT down by 2.06%, TECK down by 1.91%, Telecom down by 1.91%, while there was no gainer on the BSE sectoral front.

The few gainers on the Sensex were ICICI Bank up by 1.08%, Axis Bank up by 0.44%, Maruti Suzuki up by 0.32% and Mahindra & Mahindra up by 0.20%. On the flip side, Tata Steel down by 3.18%, Hindustan Unilever down by 2.73%, Tech Mahindra down by 2.56%, Wipro down by 2.07% and HCL Technologies down by 1.89% were the top losers.

Meanwhile, the oil ministry's Petroleum Planning & Analysis Cell (PPAC) in its latest data has showed that India's crude oil import bill nearly doubled to $119 billion in the fiscal year that ended on March 31, as energy prices soared globally following the return of demand and war in Ukraine. The data showed that India, the world's third biggest oil consuming and importing nation, spent $119.2 billion in 2021-22 (April 2021 to March 2022), up from $62.2 billion in the previous fiscal year. It spent $13.7 billion in March alone, when oil prices surged to 14-year high. This compared with $8.4 billion spending in the same month last year. Oil prices started to surge from January and rates crossed $100 per barrel in the following month before touching $140 per barrel in early March. Prices have since receded and are now around $106 per barrel.

According to PPAC, India imported 212.2 million tonnes of crude oil in 2021-22, up from 196.5 million tonnes in the previous year. Though, this was lower than pre-pandemic imports of 227 million tonnes in 2019-20. The spending on oil imports in 2019-20 was $101.4 billion. The imported crude oil is turned into value-added products like petrol and diesel at oil refineries, before being sold to automobiles and other users. India, which is 85.5% dependent on imports to meet crude oil needs, has a surplus refining capacity and it exports some petroleum products but is short on production of cooking gas LPG, which is imported from nations like Saudi Arabia. The nation consumed 202.7 million tonnes of petroleum products in 2021-22, up from 194.3 million tonnes in the previous fiscal, but lower than pre-pandemic 214.1 million tonnes demand in 2019-20.

Import of petroleum products in 2021-22 fiscal was 40.2 million tonnes worth $24.2 billion. On the other hand, 61.8 million tonnes of petroleum products were also exported for $42.3 billion. Besides, India also spent $11.9 billion on import of 32 billion cubic meters of LNG in 2021-22. This compared to $7.9 billion spent on import of 33 bcm of gas in the previous fiscal and $9.5 billion on import of 33.9 bcm in 2019-20. Net oil and gas import bill, after adjusting for exports, came to $113 billion, up from $63.5 billion in 2020-21 and $92.7 billion in 2019-20. India had spent $62.2 billion on the import of 196.5 million tonnes of crude oil in the previous 2020-21 fiscal, when global oil prices remained subdued in the wake of the COVID-19 pandemic.

Higher crude oil import bill is expected to dent the macroeconomic parameters. As per the data, the country's import dependence has increased owing to a steady decline in domestic output. The nation produced 32.2 million tonnes of crude oil in 2019-20, which fell to 30.5 million tonnes in the following year and to 29.7 million tonnes in FY22. According to PPAC, India's oil import dependence was 85% in 2019-20, which declined marginally to 84.4% in the following year before climbing to 85.5% in 2021-22.

The CNX Nifty is currently trading at 16971.55, down by 200.40 points or 1.17% after trading in a range of 16928.60 and 17022.65. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 1.81%, Hero MotoCorp up by 1.43%, ICICI Bank up by 0.75%, Axis Bank up by 0.49% and Mahindra & Mahindra up by 0.41%. On the flip side, BPCL down by 4.41%, Tata Steel down by 3.35%, JSW Steel down by 3.14%, Britannia Industries down by 3.08% and Hindustan Unilever down by 2.77% were the top losers.

Asian markets are trading in red; Nikkei 225 plunged 494.14 points or 1.82% to 26,611.12, Straits Times fell 7.45 points or 0.22% to 3,353.66, Hang Seng slipped 527.23 points or 2.55% to 20,111.29, Taiwan Weighted declined 397.99 points or 2.34% to 16,627.10, KOSPI lost 39.84 points or 1.47% to 2,664.87, Jakarta Composite dropped 12.15 points or 0.17% to 7,213.46 and Shanghai Composite was down by 74.74 points or 2.42% to 3,012.18.