Post Session: Quick Review

Indian equity benchmarks ended lower on Wednesday. Markets made a cautious start, as the government data showed that India’s economic growth hit a four-quarter low of 4.1%, partly driven by base effect. The growth was 20.1%, 8.4%, and 5.4%, in the first, second and third quarters, respectively. In the first half of the trading session, indices managed to trade in green for the most part, as chief economic adviser (CEA) V Anantha Nageswaran said the Indian economy is better placed than other countries and the fear of stagflation is exaggerated. Traders got some relief with government data showing that production growth of eight infrastructure sectors rose to a six-month high of 8.4 per cent in April on the back of better performance by coal, refinery products and electricity segments .

Besides, a monthly survey said that India's manufacturing sector growth steadied in May, with new orders and production increasing at similar rates to those registered in the previous month, while demand showed signs of resilience and improved further despite another uptick in selling prices. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) stood at 54.6 in May, little changed from 54.7 in April, pointing to a sustained recovery across the sector. However, in the second half of the trading session, markets added losses, amid reports that India's annual per capita income at constant prices remained below the pre-COVID level at Rs 91,481 in 2021-22. However, the per capita income based on Net National Income (NNI) at constant price grew by 7.5 per cent in FY22 over the previous year.

On the global front, European markets were trading mostly in green after a private survey showed China's factory activity shrank less sharply in May than expected. Asian markets settled mostly lower on Wednesday, after the manufacturing sector in China continued to contract in May, albeit at a slower pace, the latest survey from Caixin revealed on Wednesday with a manufacturing PMI score of 48.1. That's up from 46.0 in April, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction. Back home, auto stocks remained in focus reacting to their monthly sales numbers. Bajaj Auto fell after the company's commercial vehicle sales in May came 16 per cent lower on a yearly basis.

The BSE Sensex ended at 55381.17, down by 185.24 points or 0.33% after trading in a range of 55091.43 and 55791.49. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index was down by 0.10%, while Small cap index up by 0.62%. (Provisional)

The top gaining sectoral indices on the BSE were Capital Goods up by 0.75%, Industrials up by 0.70%, Metal up by 0.46%, Bankex up by 0.44% and PSU up by 0.38%, while Power down by 1.70%, Utilities down by 1.51%, TECK down by 1.18%, Healthcare down by 1.16% and Realty down by 1.15% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Mahindra & Mahindra up by 1.32%, HDFC up by 0.94%, Kotak Mahindra Bank up by 0.90%, Tata Steel up by 0.70% and HDFC Bank up by 0.64%. On the flip side, Nestle down by 2.99%, Tech Mahindra down by 2.86%, Bajaj Finserv down by 2.63%, Sun Pharma down by 2.40% and HCL Tech. down by 2.10% were the top losers. (Provisional)

Meanwhile, Indian manufacturing activity steadied in the month of May, with new orders and production increasing at similar rates to those registered in April. According to the report, the seasonally adjusted S&P Global India Manufacturing Purchasing Managers’ Index (PMI) fell to 54.6 in May from 54.7 in April.

The report further said that companies were able to secure new work despite lifting selling prices at the fastest rate in over eight-and-a-half years as additional cost burdens continued to be transferred to clients. Besides, demand showed signs of resilience in May, improving further in spite of another uptick in selling prices. Companies reported a marked increase in total new orders that was broadly similar to April.

Further, manufacturing sector jobs rose further in May, owing to ongoing improvements in sales. Although only slight, the rate of employment growth picked up to the strongest since January 2020. In May, there was a notable uptick in growth of new export orders. The rate of expansion was sharp and the fastest since April 2011.

On the inflation front, input costs rose for the twenty-second successive month in May, with companies reporting higher prices for electronic components, energy, freight, foodstuff, metals and textiles. Although softer than in April, the rate of inflation remained historically elevated.

The CNX Nifty ended at 16522.75, down by 61.80 points or 0.37% after trading in a range of 16438.85 and 16649.20. There were 17 stocks advancing against 33 stocks declining on the index. (Provisional)

The top gainers on Nifty were JSW Steel up by 3.31%, Coal India up by 1.63%, HDFC Life Insurance up by 1.37%, Mahindra & Mahindra up by 1.26% and HDFC up by 1.00%. On the flip side, Bajaj Auto down by 3.73%, Apollo Hospital Ent. down by 3.53%, Tech Mahindra down by 2.85%, Hindalco down by 2.82% and Britannia down by 2.65% were the top losers. (Provisional)

European markets were trading mostly in green, France’s CAC increased 10.80 points or 0.17% to 6,479.60 and Germany’s DAX was up by 25.67 points or 0.18% to 14,414.02. On the flip side, UK’s FTSE 100 was down by 16.08 points or 0.21% to 7,591.58.

Asian markets settled mostly lower on Wednesday tracking weakness in Wall Street overnight as investors reacted to hawkish comments from a Federal Reserve official, while ongoing global concerns about inflation, aggressive policy tightening and surging energy prices also weighed on market sentiments. Chinese and Hong Kong shares declined on account of lingering concerns over the economic impact from Beijing's tough zero-Covid policy. China’s Caixin/ Markit manufacturing Purchasing Managers’ Index for May came in at 48.1, an improvement over April’s reading of 46 but still remaining below the 50-level mark that separates expansion from contraction. However, some losses were capped by easing of Covid-19 lockdowns in China. Japanese shares gained after a private report stated that Japanese auto companies are expected to post record profits this year on the back of price hikes and cut in some production-related expenses. Meanwhile, the South Korean and Indonesian markets were closed for a holiday.