Bourses trim most of gains in late afternoon session

The Indian benchmarks pared earlier gains but continued to trade above neutral line in late afternoon session. Weakness in select Realty and FMCG shares dragged key gauges lower, while buying in IT and TECK stocks helped markets to trade near neutral lines with positive bias. Traders found some support after Reserve Bank Governor Shaktikanta Das stated that the worsening of terms of trade, driven by high commodity prices could have implications for the current account deficit in 2022-23, but it is expected to be comfortably financed. He said ‘Net foreign direct investment flows have remained robust, despite some recent moderation. Long term flows such as external commercial borrowings also remain stable. India’s foreign exchange reserves are sizeable with net forward assets providing a strong back-up. On the global front, Asian markets were trading mixed and European markets were trading higher after the U.S. Federal Reserve raised interest rates by 50 basis points, as widely expected, but struck a less hawkish tone than some had feared, saying inflation will ‘flatten out’ over the coming months.

The BSE Sensex is currently trading at 55769.47, up by 100.44 points or 0.18% after trading in a range of 55715.43 and 56566.80. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was declined 0.23%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were IT up by 1.73%, TECK up by 1.65%, Metal up by 0.93%, Capital Goods up by 0.86% and Power was up by 0.71%, while Realty down by 1.62%, FMCG down by 0.46%, Energy down by 0.36%, Consumer Durables down by 0.30% and Consumer Discretionary was down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 3.78%, Infosys up by 3.12%, HCL Tech up by 2.27%, Tata Steel up by 2.24% and Wipro up by 1.38%. On the flip side, Indusind Bank down by 3.52%, Nestle down by 3.17%, Ultratech Cement down by 1.85%, Reliance Industries down by 1.61% and Sun Pharma down by 1.59% were the top losers.

Meanwhile, India’s service sector activity improved further in the month of April, with a surge in incoming new work boosting business activity and supporting a renewed increase in employment. As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index surged to 57.9 in April from 53.6 in March. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- also improved to 57.6 in April from 54.3 in March.

The report noted that new business inflows expanded further in April, taking the current sequence of growth to nine months. The latest rise in sales was sharp and the strongest since November 2021. Output was boosted by higher bookings, the easing of pandemic-related restrictions and favourable demand conditions. Yet, companies resumed their hiring efforts in April, as seen by the first increase in employment since last November.

On the inflation front, there was an intensification of inflationary pressures, with a near-record upturn in input costs underpinning the strongest rise in output charges in just under five years. Inflation concerns continued to dampen business confidence. Owing to a combination of recovering demand and sharp cost pressures, Indian service providers lifted their selling prices again at the start of fiscal year 2022/23. The rate of charge inflation was marked and the highest in close to five years.

The CNX Nifty is currently trading at 16693.95, up by 16.35 points or 0.10% after trading in a range of 16684.95 and 16945.70. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.88%, Hero MotoCorp up by 3.37%, Infosys up by 3.12%, HCL Tech up by 2.24% and ONGC up by 2.19%. On the flip side, Indusind Bank down by 3.61%, Tata Consumer down by 3.38%, Nestle down by 3.08%, Britannia down by 2.80% and Ultratech Cement down by 2.12% were the top losers.

Asian markets were trading mixed, Hang Seng decreased 76.12 points or 0.36% to 20,793.40 and Straits Times was down by 5.57 points or 0.17% to 3,343.70. On the flip side, Shanghai Composite gained 20.70 points or 0.68% to 3,067.76 and Taiwan Weighted was up by 130.29 points or 0.79% to 16,696.12.

European markets were trading higher, UK’s FTSE 100 increased 89.09 points or 1.19% to 7,582.54, France’s CAC increased 111.56 points or 1.74% to 6,507.24 and Germany’s DAX was up by 220.85 points or 1.58% to 14,191.67.