Local equity indices witness bloodbath in early deals

Indian equity benchmarks made gap-down opening on Friday tracking sell-off in the global markets. Markets are trading deeply in red in early deals due to board based selling across almost all the sectoral indices. Traders were concerned as India Ratings said inflation, supply chain disruptions and a weak consumption demand could upset the revival in credit growth in the medium term. It said the reversal of the interest rate cycle--marked by the Reserve Bank of India’s 40 basis points increase in policy repo rate -- would weigh down credit growth as borrowings become costlier. Some pessimism also came in as consequent to the 40 basis point hike in the repo rate announced by the Reserve Bank of India (RBI) on Wednesday, large banks such as ICICI Bank and Bank of Baroda have raised their lending rates by an equal amount on loans linked to the external benchmark. Market participants overlooked commerce and industry minister Piyush Goyal’s statement that all the key indicators such as jump in exports and high GST collection in April reflect that the country's economy is on the growth path.

On the global front, most of the Asian markets are trading lower as traders continued to react to the Federal Reserve's monetary policy announcement on Wednesday, when the central bank raised interest rates by 50 basis points as expected. Concerns about higher rates, inflation, the economic outlook and the ongoing war in Ukraine also remain. Indonesia remains closed for Eid-ul-Fitr holiday. Back home, sugar industry stocks were in focus as industry body Indian Sugar Mills Association (ISMA) said India has exported 7 million tonnes of the sweetener so far in the ongoing 2021-22 marketing year, and exports from the country may touch a new record of 9 million tonnes. In scrip specific development, Voltas dropped as it reported a 23.46 percent decline in its consolidated net profit at Rs 182.71 crore in the fourth quarter ended March 2022. Meanwhile, LIC’s IPO was fully subscribed on Thursday -- the second day of the issue.

The BSE Sensex is currently trading at 54987.49, down by 714.74 points or 1.28% after trading in a range of 54721.78 and 55070.12. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.61%, while Small cap index was down by 1.71%.

The sole gaining sectoral index on the BSE was Telecom up by 0.04%, while Metal down by 2.94%, IT down by 2.33%, Realty down by 2.24%, Consumer Durables down by 2.02%, Basic Materials down by 1.98% were the top losing indices on BSE.

The few gainers on the Sensex were Mahindra & Mahindra up by 1.31%, NTPC up by 1.04%, ITC up by 1.03% and Power Grid up by 0.11%. On the flip side, HCL Technologies down by 2.99%, Wipro down by 2.98%, Bajaj Finance down by 2.91%, Bajaj Finserv down by 2.50% and Infosys down by 2.48% were the top losers.

Meanwhile, expressing optimism over economic growth, commerce and industry minister Piyush Goyal has said all the key indicators such as jump in exports and high GST collection in April reflect that the country's economy is on the growth path. He said that goods and services exports have touched $675 billion in 2021-22, while the GST (Goods and Services Tax) collection in April touched the highest ever level of about Rs 1.68 lakh crore, up 20 per cent from the year-ago period.

He also asked project exporters to diversify and foray into markets of the developed world and urged them not to restrict themselves to government's line of credit projects and projects in the developing world. He outlined the challenges that the global economy has been facing such as the Omicron wave, global supply chain disruptions, soaring raw material costs, container shortages, financial market volatility and geopolitical tensions.

About the country's target of $1 trillion worth of goods and services export each by 2030, he said that the target would be achieved through the participation of all stakeholders. Further, he urged the banking sector to abandon the mindset of conservatism that has set in the sector and be open to taking some risks. He said India has all the necessary ingredients to become a global player in project exports, added that the world has realised that it is absolutely essential to invest in infrastructure.

The CNX Nifty is currently trading at 16454.60, down by 228.05 points or 1.37% after trading in a range of 16382.50 and 16482.80. There were 4 stocks advancing against 46 stocks declining on the index.

The few gainers on Nifty were Mahindra & Mahindra up by 1.42%, ITC up by 1.13%, Hero MotoCorp up by 0.43% and NTPC up by 0.13%. On the flip side, Bajaj Finance down by 2.99%, Wipro down by 2.98%, Tata Motors down by 2.97%, Divi's Lab down by 2.87% and HCL Technologies down by 2.70% were the top losers.

Asian markets are trading mostly in red; Straits Times slipped 43.07 points or 1.29% to 3,300.50, Hang Seng declined 741.79 points or 3.57% to 20,051.61, Taiwan Weighted lost 297.83 points or 1.78% to 16,398.29, KOSPI fell 30.93 points or 1.16% to 2,646.64 and Shanghai Composite was down by 70.78 points or 2.31% to 2,996.98, while Nikkei 225 rose 231.91 points or 0.86% to 27,050.44.