Domestic indices tumble in early deals; Sensex crashes over 650 points

Indian equity benchmarks extended their previous session’s losses with gap-down opening on Monday tracking weakness all over global markets. Domestic indices are trading deeply in red with cut of around one and half a percent each in early deals due to selling in all the sector indices led by Metal, Power and Utilities which are down by over 2% each. Traders were concerned with a private report that foreign funds' ownership in domestic equities fell to pre-COVID lows and hit a multi-year low of 19.5 per cent in March this year in NSE500 companies valued at $619 billion. Investors were also cautious ahead of crucial macro-economic data such as industrial output and retail inflation reading to be out later this week. Market participants largely overlooked a periodic labour force survey by the National Statistical Office (NSO) showing that the unemployment rate for persons of 15 years and above in urban areas slipped to 8.7 per cent in October-December 2021 from 10.3 per cent in the year-ago quarter.

Global cues remained lackluster with most of the Asian markets trading lower following the broadly negative cues from Wall Street on Friday, amid lingering concerns about persistent inflation and the further prospect of aggressive monetary policy tightening by central banks around the world. Besides, the services sector in Japan swung into expansion territory in April, the latest survey from Jibun Bank revealed on Monday with a services PMI score of 50.7. Back home, the sugar industry stocks were in focus as the Centre has allowed an additional 2,051 metric tonnes of raw sugar to be exported to the US under the Tariff Rate Quota (TRQ) for the US fiscal year 2022. In scrip specific development, Shares of Reliance Industries (RIL) fell after it reported a consolidated net profit of Rs 16,203 crore for the quarter ended March 31, 2022 (Q4 FY22), up 22.5 per cent over the year-ago period’s Rs 13,227 crore, but slightly short of expectations.

The BSE Sensex is currently trading at 54153.93, down by 681.65 points or 1.24% after trading in a range of 53918.02 and 54324.52. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.77%, while Small cap index was down by 1.93%.

The top losing sectoral indices on the BSE were Metal down by 2.52%, Power down by 2.44%, Utilities down by 2.43%, Industrials down by 2.13%, Energy down by 2.05%, while there was no gainer on the BSE sectoral front.

The only gainers on the Sensex were Infosys up by 0.88% and HCL Technologies up by 0.56%. On the flip side, Tech Mahindra down by 3.83%, Indusind Bank down by 3.13%, Tata Steel down by 2.78%, Reliance Industries down by 2.48% and Axis Bank down by 2.06% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has flagged anonymity as an ‘inherent risk’ in blockchain technology and called for taking precaution in future with a rise in the use of this technology. She made it clear that using the distributed ledger technology (DLT), which is also called as blockchain, is absolutely imperative and the government also supports the use of the same. Her remarks come ahead of the launch of the budgetary announcement of central bank digital currency (CBDC) which is based on the blockchain technology itself and is billed as being similar to the paper currency carried in wallets.

Sitharaman said ‘the anonymity is what ... one unknown element in this whole thing. The anonymity of the person or whoever or the robot is the one which we have to be absolutely readying ourselves as a future challenge’. She said the DLT is a beautiful technology which will help in democratisation but flagged anonymity as an inherent risk which we need to guard ourselves from. Terming anonymity as a powerful imponderable in the whole equation, she said ‘unless we are able to guard ourselves against that anonymous element which can itself pose an inherent risk, we probably will be exposing ourselves much more than ever we would have imagined’.

Besides, she said the retail investment journey has transformed in the last two or three years, with new demat account opening zooming to 26 lakh per month in FY22 from 12 lakh in FY21 and just 4 lakh a month in FY20. She said the retail investors act as shock absorbers as the foreign portfolio investors have come in and gone as per the global cues. Pointing out to the total $4 trillion in custody value held by NSDL, she said the buoyancy in retail account opening is a prime reason for the high asset value.

The CNX Nifty is currently trading at 16217.50, down by 193.75 points or 1.18% after trading in a range of 16142.10 and 16270.20. There were 8 stocks advancing against 42 stocks declining on the index.

The top gainers on Nifty were Infosys up by 0.93%, UPL up by 0.84%, HCL Technologies up by 0.70%, Power Grid up by 0.52% and Bajaj Finserv up by 0.49%. On the flip side, Tech Mahindra down by 3.82%, Indusind Bank down by 2.99%, Tata Motors down by 2.75%, Tata Steel down by 2.41% and Reliance Industries down by 2.40% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 597.28 points or 2.21% to 26,406.28, Straits Times fell 4.34 points or 0.13% to 3,287.55, Taiwan Weighted dropped 283.58 points or 1.73% to 16,124.62, KOSPI lost 27.21 points or 1.03% to 2,617.30 and Jakarta Composite plunged 287.24 points or 3.97% to 6,941.67, while Shanghai Composite was up by 0.06 points to 3,001.62.