Benchmarks slide lower in late afternoon session

Local equity markets slid lower in late afternoon session. Banking and Auto sectors, which were very reactionary to the repo rate, were performing weak. Sentiment on the street weakened as RBI Governor Shaktikanta Das said the Ukraine-Russia war has led to globalisation of inflation and is posing new challenges, as the central bank upped the inflation projection to 6.7 per cent for current fiscal year. In April, RBI had projected retail inflation at 5.7 per cent for 2022-23. Traders failed to take support with Chief Economic Advisor (CEA) Anantha Nageswaran’s statement that the impact of structural reforms, like GST and IBC, will help boost India's growth once the cloud of the pandemic and geopolitical conflict recedes. On the global front, Asian markets were trading mostly in green despite growing worries that aggressive central bank policy tightening will dent global growth. European markets were trading lower as investors prepare for the latest reading of U.S. inflation on Friday.

The BSE Sensex is currently trading at 54825.60, down by 281.74 points or 0.51% after trading in a range of 54683.30 and 55423.97. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.20%, while Small cap index was down by 0.26%.

The few gaining sectoral indices on the BSE were Realty up by 1.61%, PSU up by 0.36% ,Metal up by 0.36% and IT was up by 0.03%, while Telecom down by 1.14%, FMCG down by 0.86%, Energy down by 0.66%, Industrials down by 0.52%, Power down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.70%, SBI up by 1.49%, Titan Company up by 1.04%, Bajaj Finance up by 0.89% and Maruti Suzuki up by 0.81%. On the flip side, Bharti Airtel down by 2.06%, Reliance Industries down by 1.70%, Indusind Bank down by 1.64%, ITC down by 1.52% and Asian Paints down by 1.24% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has increased the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points (bps) to 4.90 per cent with immediate effect. Consequently, the standing deposit facility (SDF) rate stands adjusted to 4.65 per cent and the marginal standing facility (MSF) rate and the Bank Rate to 5.15 per cent.

The RBI’s Monetary Policy Committee (MPC) also decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.

On the inflation front, inflation is now projected at 6.7 per cent in 2022-23, with Q1 at 7.5 per cent; Q2 at 7.4 per cent; Q3 at 6.2 per cent; and Q4 at 5.8 per cent, with risks evenly balanced, while the real GDP growth projection for 2022-23 is retained at 7.2 per cent, with Q1 at 16.2 per cent; Q2 at 6.2 per cent; Q3 at 4.1 per cent; and Q4 at 4.0 per cent, with risks broadly balanced.

The CNX Nifty is currently trading at 16345.85, down by 70.50 points or 0.43% after trading in a range of 16293.35 and 16514.30. There were 19 stocks advancing against 30 stocks declining on the index, while 1 stock remain unchanged.

The top gainers on Nifty were Tata Steel up by 1.69%, SBI up by 1.44%, ONGC up by 1.14%, Titan Company up by 1.03% and BPCL up by 0.94%. On the flip side, Bharti Airtel down by 1.96%, Reliance Industries down by 1.72%, Indusind Bank down by 1.72%, ITC down by 1.55% and Bajaj Auto down by 1.39% were the top losers.

Asian markets were trading mostly in green, Hang Seng increased 482.92 points or 2.24% to 22,014.59, Nikkei 225 surged 290.34 points or 1.04% to 28,234.29, Taiwan Weighted strengthened 157.63 points or 0.95% to 16,670.51, Jakarta Composite soared 52.26 points or 0.73% to 7,193.31 and Shanghai Composite was up by 22.03 points or 0.68% to 3,263.79. On the flip side, KOSPI fell 0.19 points or 0.01% to 2,626.15 and Straits Times was down by 5.62 points or 0.17% to 3,225.92.

European markets were trading lower, UK’s FTSE 100 decreased 5.26 points or 0.07% to 7,593.67, France’s CAC decreased 15.57 points or 0.24% to 6,484.78 and Germany’s DAX was down by 42.27 points or 0.29% to 14,514.35.