Post Session: Quick Review

Indian equity benchmarks ended with losses on Tuesday. The start of the day was on a negative note, following steep rise in crude oil prices. Oil prices continued to rise after the European Union said it had agreed to cut 90 per cent of oil imports from Russia by the end of this year. Brent Crude futures were above $122 a barrel this morning. Some cautiousness came in as domestic ratings agency India Ratings said the GST has not helped states achieve the key objective of boosting their tax revenue. The rating agency said that the data does not point to any benefits to the states in the last five years since the implementation of GST (Goods and Services Tax).

Key indices cut most of their losses in late morning deals to trade near their neutral lines for the most part of the trading session, as the Prime Minister's Employment Generation Programme has been approved for continuation till the financial year 2025-26 with the total outlay of Rs 13,554.42 crore. Some support came with Ajay Seth, secretary at the department of economic affairs, stating that India's inflation should ease in the coming months following steps taken by the Union government and as global prices coming off in May will have a salutary impact.

However, markets failed to maintain recovery and fell sharply in the last hour of the trading session, amid a private report stating that India’s economy probably grew slower than previously estimated last year, with virus curbs in the final quarter seen as a drag on activity while the war in Europe has added a new inflation hurdle to recovery. Traders got cautious after a private report said that soaring prices and the subsequent hit to consumer spending and investments are likely to further dampen India's economy, as the central bank faces a finely balanced struggle to tame inflation via rate hikes without hurting economic growth.

On the global front, European markets were trading mostly in red as attention shifts to inflation and interest-rate hikes. Asian markets settled mostly higher on Tuesday, following the lack of cues from Wall Street overnight due to a holiday, as signs of easing COVID-19 curbs in Beijing and Shanghai as well as the announcement of more stimulus measures in China raised optimism about growth in the world's second largest economy and helped underpin sentiment.

The BSE Sensex ended at 55566.41, down by 359.33 points or 0.64% after trading in a range of 55369.14 and 55925.62. There were 14 stocks advancing against 16 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.49%, while Small cap index up by 0.68%. (Provisional)

The top gaining sectoral indices on the BSE were Realty up by 2.11%, Metal up by 1.78%, Consumer Disc up by 0.88%, Auto up by 0.87% and Telecom up by 0.84%, while Power down by 2.17%, Utilities down by 1.95%, Bankex down by 1.06%, Oil & Gas down by 0.80% and Consumer Durables down by 0.77% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 3.61%, NTPC up by 3.48%, Power Grid up by 2.06%, Tech Mahindra up by 1.46% and Tata Steel up by 0.78%. On the flip side, Sun Pharma down by 3.11%, Kotak Mahindra Bank down by 2.55%, HDFC down by 2.50%, Titan Co down by 1.67% and Infosys down by 1.54% were the top losers. (Provisional)

Meanwhile, with an aim to facilitate generation of employment opportunities for unemployed youth across the country, the government has approved the extension of its scheme for employment generation ‘Prime Minister’s Employment Generation Programme’ (PMEGP) over the 15th Finance Commission Cycle from 2021-22 to 2025-26 with an outlay of Rs 13,554.42 crore.

In addition, multiple modifications have also been made to the scheme including increasing the maximum financial assistance offered from existing Rs 25 lakh to Rs 50 lakh to entrepreneurs for setting up new manufacturing units and from existing Rs 10 lakh to Rs 20 lakh for new service units.

Besides, all Implementing Agencies are allowed to receive and process applications in all areas irrespective of the rural or urban category. As per the notification, the scheme will create sustainable estimated employment opportunities for about 40 lakh persons in five financial years. All the States/UTs will be covered under the Scheme.

The CNX Nifty ended at 16584.55, down by 76.85 points or 0.46% after trading in a range of 16521.90 and 16690.75. There were 28 stocks advancing against 22 stocks declining on the index. (Provisional)

The top gainers on Nifty were ONGC up by 5.00%, Mahindra & Mahindra up by 3.61%, NTPC up by 3.38%, Coal India up by 3.04% and JSW Steel up by 2.30%. On the flip side, Sun Pharma down by 3.12%, Kotak Mahindra Bank down by 2.96%, HDFC down by 2.56%, Titan Co down by 1.77% and HDFC Life Insurance down by 1.63% were the top losers. (Provisional)

European markets were trading mostly in red, France’s CAC decreased 32.06 points or 0.49% to 6,530.33 and Germany’s DAX was down by 40.34 points or 0.28% to 14,535.64. On the flip side, UK’s FTSE 100 was up by 43.20 points or 0.57% to 7,643.26.

Asian markets settled mostly higher on Tuesday after reports showed China's factory activity fell at a slower pace in May as coronavirus curbs in major manufacturing hubs eased. Chinese and Hong Kong shares climbed as China's cabinet unveiled a series of new policy measures to bolster the economy and stabilize jobs. However, Japanese shares fell on lack of cues from Wall Street overnight due to Memorial Day holiday. Global investors are remaining cautious about whether the US central bank can control inflation that is running at a four-decade high without tipping the biggest global economy into recession.