India equity benchmarks trade deeply in red in late afternoon session

India Equity benchmarks continued to face heavy drubbing in late afternoon session, following a sell-off in global markets and decline in shares of index major Reliance Industries. Meanwhile, broader indices, BSE Mid cap and Small cap, were also trading deeply in red. Sentiments remained weak with a private report stating 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. On the global front, Asian markets were trading mostly lower on anxiety over rising inflation and interest rates. Data showed China's export growth slowed to its lowest rate since June 2020 in April and imports flattened, highlighting downside risks to global growth stemming from the Ukraine war and the Shanghai lockdown. European markets were trading lower amid lingering concerns over slowing global growth, high inflation and rising interest rates. Back home, on the sectoral front, except TECK and Telecom, all other sectoral indices were trading in the red with Metal, Energy, Utilities, Power and Consumer Durables down over 1.5 percent.

The BSE Sensex is currently trading at 54263.09, down by 572.49 points or 1.04% after trading in a range of 53918.02 and 54795.24. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 2.05%, while Small cap index down by 1.74%.

The only gaining sectoral indices on the BSE were TECK up by 0.28%, Telecom up by 0.19%, while Metal down by 2.08%, Energy down by 2.05%, Utilities down by 1.95%, Power down by 1.93%, Consumer Durables down by 1.90% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.20%, HCL Tech up by 1.90%, Infosys up by 1.56%, Bharti Airtel up by 0.59% and Bajaj Finserv up by 0.30%. On the flip side, Reliance Industries down by 3.78%, Indusind Bank down by 3.59%, Nestle down by 3.04%, Tata Steel down by 2.27% and Tech Mahindra down by 2.24% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that the Indian steel sector outlook, on the back of strong domestic demand from government and private sectors, is likely to remain firm amid concern of global demand uncertainties in the current fiscal (FY23). It has maintained a '’neutral outlook’ on the steel sector for FY23 in view of high raw material inflation that would result in elevated prices and moderation of volume and margin.

Ind-Ra also expects that infrastructure spending by the government will support steady domestic consumption. It said the government has allocated Rs 111 trillion for the National Infrastructure Pipeline (NIP) to be spent over the next five years while for the private sector capital expenditure, housing and consumer durables end-user segment, the demand growth would remain muted due to elevated prices.

According to the report, steel players may find it challenging to pass on the cost inflation completely. Although this could moderate absolute EBITDA, it would remain higher than the pre-pandemic levels. Lower Chinese production and exports, and an increase in quota limit for exports to European markets, due to the ongoing Ukraine-Russia war, Indian steel players are likely to benefit. As such, the margin in exports sales mix is likely to be higher in FY23, cushioning the profitability.

The CNX Nifty is currently trading at 16260.70, down by 150.55 points or 0.92% after trading in a range of 16142.10 and 16403.70. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 2.47%, HCL Tech up by 1.84%, Infosys up by 1.72%, Bajaj Auto up by 1.52% and Divi's Lab up by 1.37%. On the flip side, Reliance Industries down by 4.01%, Indusind Bank down by 3.23%, Nestle down by 3.09%, Adani Ports &Special down by 2.53% and Hero MotoCorp down by 2.47% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted dropped 359.28 points or 2.19% to 16,048.92, Straits Times trembled 17.10 points or 0.52% to 3,274.79, KOSPI fell 33.70 points or 1.27% to 2,610.81, Jakarta Composite lost 319.16 points or 4.42% to 6,909.75 and Nikkei 225 was down by 684.22 points or 2.53% to 26,319.34. On the flip side, Shanghai Composite was up by 2.58 points or 0.09% to 3,004.14.

European markets were trading lower, UK’s FTSE 100 fell 71.33 points or 0.96% to 7,316.64, France’s CAC dropped 77.39 points or 1.19% to 6,185.4 and Germany’s DAX was down by 121.37 points or 0.87% to 13,558.62.