Domestic inequities trade lower in early deals

Indian equity benchmarks extended their previous session’s losses with gap-down opening on Monday tracking sell-off in the global markets. Domestic markets are trading lower with cut of over half a percent each in early deals due to selling in almost all the sector indices, except Oil & Gas. Traders were concerned as the government data showed that the production of eight infrastructure sectors slowed down to 4.3% in March against 12.6% in the year-ago period. Some cautiousness also came in as RBI data showed the country’s foreign exchange reserves decreased by $3.271 billion to $600.423 billion in the week ended April 22. Though, downside remained capped as the Finance Ministry stated that the monthly collection under the Goods and Services Tax (GST) has peaked to an all-time high of Rs 1.68 lakh crore in April 2022. Some support also came in as Department for the Promotion of Industry and Internal Trade (DPIIT) secretary Anurag Jain said foreign direct investment (equity) inflows into manufacturing surged 78% until February last fiscal to $20 billion, far exceeding the pace of rise in overall FDI, despite the pandemic blues. Meanwhile, investors are eyeing manufacturing PMI data to be out later in the day.

On the global front, Asian markets are trading lower in thin trading due to a holiday in most markets, following the broadly negative cues from Wall Street on Friday, amid lingering concerns about inflation and the prospect of aggressive rate hikes by central banks around the world. Besides, the manufacturing sector in Japan continued to expand in April, albeit at a slower rate, the latest survey from Jibun Bank showed on Monday with a manufacturing PMI score of 53.5. Most of the regional markets are closed on Monday for Labor Day, including Singapore, Taiwan, China, Hong Kong and Indonesia (Eid-ul-Fitr).

Back home, pharma industry stocks were in focus as the commerce ministry said pharma exports have touched Rs 1,83,422 crore in 2021-22 against Rs 90,415 crore in 2013-14. Auto stocks were also in limelight reacting to their sales numbers. In scrip specific developments, IndusInd Bank was the top Sensex gainer on strong Q4 results. The bank reported a 51% jump in net profits, aided by lower provisions and higher net interest income. However, Just Dial fell as its Q4 consolidated net profit declined 34.3% to Rs 22.05 crore for the quarter ended March 2022 vs Rs 33.57 crore in the year ago quarter.

The BSE Sensex is currently trading at 56747.57, down by 313.30 points or 0.55% after trading in a range of 56412.62 and 56783.13. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.64%, while Small cap index was down by 0.87%.

The only gaining sectoral index on the BSE was Oil & Gas up by 0.02%, while Consumer Durables down by 1.86%, Telecom down by 1.44%, IT down by 1.26%, Metal down by 1.22%, TECK down by 1.15% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.98%, NTPC up by 2.15%, Mahindra & Mahindra up by 1.08%, Axis Bank up by 0.80% and Ultratech Cement up by 0.55%. On the flip side, Asian Paints down by 2.08%, Titan Company down by 2.05%, Sun Pharma down by 1.71%, Infosys down by 1.65% and Tech Mahindra down by 1.48% were the top losers.

Meanwhile, expressing views over India’s economic situation, the Reserve Bank of India (RBI) in the Report on Currency and Finance for 2021-22 stated that the country’s economy may take more than a decade to overcome the losses emanating from the COVID-19 pandemic. The report has estimated the output losses during the pandemic period at around Rs 52 lakh crore. The Report said ‘the perturbations from repeated waves of COVID-19 have come in the way of sustained recovery and the quarterly trends in GDP essentially followed the ebbs and flows of the pandemic’.

Following a sharp contraction in the first quarter of FY21, the economic momentum progressively picked up till it was hit by the second wave in April-June 2021. Similarly, the impact of the third wave in January 2022 partially dented the recovery process. It noted that with the ongoing Russia-Ukraine war, the downward risks to global and domestic growth are getting accentuated through a surge in commodity prices and global supply chain disruptions. It said ‘the pandemic is a watershed moment and the ongoing structural changes catalysed by the pandemic can potentially alter the growth trajectory in the medium-term’.

As per the report, the pre-COVID-19 trend growth rate works out to 6.6% (CAGR for 2012-13 to 2019-20) and excluding the slowdown years, it stood at 7.1% (CAGR for 2012-13 to 2016-17). Taking the actual growth rate of (-) 6.6% for 2020-21, 8.9% for 2021-22 and assuming growth rate of 7.2% for 2022-23, and 7.5% beyond that, India is expected to overcome COVID-19 losses in 2034-35. It pegged the output losses for individual years at Rs 19.1 lakh crore, Rs 17.1 lakh crore and Rs16.4 lakh crore for FY21, FY22 and FY23, respectively.

The report has been authored by officials in the RBI’s Department of Economic and Policy Research. However, the central bank said that the findings and conclusions expressed in the report are entirely those of the contributors and do not represent the views of the banking regulator.

The CNX Nifty is currently trading at 17012.40, down by 90.15 points or 0.53% after trading in a range of 16917.25 and 17014.35. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 4.05%, Mahindra & Mahindra up by 0.97%, Axis Bank up by 0.80%, HDFC up by 0.70% and Ultratech Cement up by 0.56%. On the flip side, SBI Life Insurance down by 2.32%, Titan Company down by 2.08%, Asian Paints down by 2.02%, Apollo Hospital down by 1.78% and Infosys down by 1.76% were the top losers.

Asian markets are trading in red; Nikkei 225 fell 42.09 points or 0.16% to 26,805.81 and KOSPI was down by 11.14 points or 0.41% to 2,683.91.