Domestic markets trade lower in early deals; Nifty below 16,550 mark

Indian equity benchmarks extended their previous session’s losses with negative start on Monday tracking losses on Wall Street on Friday. Markets extended their losses in early deals and are trading lower with Sensex and Nifty lingering below their crucial levels of 55,600 and 16,550, respectively. Traders were concerned as continuing its heavy selling spree for the eighth consecutive month, foreign investors pulled out nearly Rs 40,000 crore from the Indian equity market in May on fears of an aggressive rate hike by US Federal Reserve that dented investor sentiments. Adding more pessimism, the Union Health Ministry data showed that India logged 4,270 new coronavirus infections taking the tally of COVID-19 cases to 4,31,76,817, while the daily positivity rate was recorded above one per cent after 34 days. Though, down side remained capped as RBI data showed that the country's foreign exchange reserves increased by $3.854 billion to $601.363 billion in the week ended May 27.

On the global front, Asian markets are trading mostly higher, despite negative cues from Wall Street on Friday, amid pessimism over the outlook for interest rates following a stronger than expected jobs report from the U.S. The easing of COVID-19 restrictions also aided market sentiment. South Korea market is closed for Memorial Day. Back home, coal industry stocks were in focus as Coal Minister Pralhad Joshi said to address the country’s energy demand which is set to double by 2040, thermal coal requirement would go up to around 1,500 million tonnes in the next 18 years.

The BSE Sensex is currently trading at 55513.27, down by 255.96 points or 0.46% after trading in a range of 55295.74 and 55767.14. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.89%, while Small cap index was down by 0.84%.

The only gaining sectoral indices on the BSE were Utilities up by 0.15% and Power up by 0.15%, while IT down by 1.44%, Telecom down by 1.34%, TECK down by 1.30%, Realty down by 1.27%, Consumer discretionary down by 1.11% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.58%, Mahindra & Mahindra up by 0.82%, Reliance Industries up by 0.58%, Axis Bank up by 0.54% and Ultratech Cement up by 0.24%. On the flip side, Bajaj Finserv down by 2.07%, Tech Mahindra down by 1.72%, Hindustan Unilever down by 1.55%, Wipro down by 1.51% and Asian Paints down by 1.46% were the top losers.

Meanwhile, India has achieved the target of supplying 10 per cent ethanol-blended petrol five months ahead of schedule. This translates into a forex impact of over Rs 41,500 crore, reduced greenhouse gas (GHG) emissions of 27 lakh tonnes and has also led to the expeditious payment of over Rs 40,600 crore to farmers. In order to cut oil import dependence and address environmental issues, the country is aiming to double the blend by 2025-26. The original target for doping 10 per cent ethanol, extracted from sugarcane and other agri commodities, in petrol originally was November 2022 but this has been achieved in June thanks to tremendous effort by state-owned fuel retailers Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL).

India is the world's fifth largest producer of ethanol after the US, Brazil, EU and China. Ethanol worldwide is largely used for consumption but nations like Brazil and India also dope it in petrol. The Government of India, with the aim to enhance India's energy security, reduce import dependency on fuel, save foreign exchange, address environmental issues and give a boost to the domestic agriculture sector, has been promoting the Ethanol Blended Petrol (EBP) Programme. It has advanced the nation's target of making petrol with 20 per cent ethanol by five years to 2025 in a move that's expected to save $4 billion annually.

This increased blending will expand the use of renewable energy in the world's third-biggest oil importer and help turn the nation's surplus rice and damaged foodgrains into ethanol. The 'National Policy on Biofuels' notified by the Government in 2018 envisaged an indicative target of 20 per cent ethanol blending in petrol by year 2030. However, considering the encouraging performance, due to various interventions made by the Government since 2014, the target of 20 per cent ethanol blending was (last year) advanced from 2030 to 2025-26.

The CNX Nifty is currently trading at 16531.15, down by 53.15 points or 0.32% after trading in a range of 16444.55 and 16579.20. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were NTPC up by 1.84%, ONGC up by 1.81%, HDFC Life Insurance up by 1.29%, Cipla up by 1.10% and Mahindra & Mahindra up by 0.96%. On the flip side, Bajaj Finserv down by 2.02%, BPCL down by 1.78%, Hero MotoCorp down by 1.74%, Tech Mahindra down by 1.70% and Asian Paints down by 1.68% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 159.79 points or 0.58% to 27,921.36, Hang Seng jumped 255.00 points or 1.21% to 21,337.13, Taiwan Weighted rose 96.18 points or 0.58% to 16,648.75 and Shanghai Composite was up by 33.47 points or 1.05% to 3,228.93. On the other hand, Straits Times fell 4.40 points or 0.14% to 3,227.57 and Jakarta Composite was down by 107.62 points or 1.50% to 7,075.34.