Domestic indices erase opening losses; trade tad higher in early deals

Indian equity benchmarks extended their previous session’s selloff with gap-down opening on Friday amid lingering global weakness. Though, markets erased all of their losses and are trading tad above neutral lines in early deals on account of buying in Metal, Realty and PSU stocks. Traders took encouragement as a periodic labour force survey by the National Statistical Office (NSO) showed the unemployment rate for persons aged 15 years and above in urban areas dipped to 8.2 per cent in January-March 2022 from 9.3 per cent in the year-ago quarter. Some support also came in as advance tax paid by companies in the first quarter of the fiscal year grew 46 per cent over that in the equivalent period in 2021-22, indicating healthy tax buoyancy that will provide the government the cushion to absorb part of the higher subsidy bill. Besides, the Reserve Bank of India (RBI) in its monthly bulletin said ‘Domestic economic activity has been gaining traction in spite of formidable headwinds from external developments’.

On the global front, most of the Asian markets are trading lower following the broadly negative cues overnight from global markets, amid rising concerns of a possible recession in the foreseeable future due to aggressive policy tightening by central banks around the world. Central banks in Switzerland, England and Taiwan, among others, also decided to hike rates to fight soaring inflation.

Back home, banking stocks were buzzing as M Rajeshwar Rao, deputy governor of the Reserve Bank of India (RBI), said gross non-performing assets (NPAs) of the banking sector dropped below 6 per cent as of March 2022 - the lowest since 2016 - and net NPAs fell to 1.7 per cent during the same period, indicating that the sector has remained largely unscathed from the ill-effects of the Covid-19 pandemic so far. In stock specific movement, Delta Corp traded higher as its subsidiary Deltatech Gaming has filed draft papers for an IPO worth Rs 550 crore.

The BSE Sensex is currently trading at 51572.36, up by 76.57 points or 0.15% after trading in a range of 50921.22 and 51574.87. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.10%, while Small cap index was down by 0.12%.

The top gaining sectoral indices on the BSE were Metal up by 1.48%, Realty up by 0.61%, PSU up by 0.53%, Basic Materials up by 0.50%, Bankex up by 0.49%, while IT down by 1.05%, Healthcare down by 0.99%, TECK down by 0.82%, Consumer Discretionary down by 0.53%, Consumer Durables down by 0.40% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 2.25%, Reliance Industries up by 1.80%, Bajaj Finserv up by 1.80%, Bajaj Finance up by 1.61% and SBI up by 0.99%. On the flip side, Dr. Reddy's Lab down by 3.20%, Wipro down by 1.89%, TCS down by 1.83%, Sun Pharma down by 1.64% and Nestle down by 1.56% were the top losers.

Meanwhile, a periodic labour force survey (PLFS) by the National Statistical Office (NSO) has showed improvement as the unemployment rate for persons aged 15 years and above in urban areas dipped to 8.2 per cent in January-March 2022 from 9.3 per cent in the year-ago quarter. Joblessness or unemployment rate is defined as the percentage of unemployed persons among the labour force. Joblessness was high in January-March in 2021 mainly due to the staggering impact of the lockdown restrictions in the country, which were imposed to curb the spread of the deadly coronavirus. PLFS showed the unemployment rate for persons of age 15 years and above in October-December 2021 was 8.7 per cent in urban areas.

As per the survey data, the unemployment rate among females (aged 15 years and above) in urban areas declined to 10.1 per cent in January-March, 2022 from 11.8 per cent a year ago. It was 10.5 per cent in October-December 2021. Among males, the unemployment rate in urban areas dipped to 7.7 per cent in January-March 2022 compared to 8.6 per cent a year ago. It was 8.3 per cent in October-December 2021. Labour force participation rate in CWS (Current Weekly Status) in urban areas for persons aged 15 years and above declined to 47.3 per cent in the January-March quarter of 2022, down from 47.5 per cent in the same period a year ago. It was 47.3 per cent in October-December 2021.

Labour force refers to the part of the population which supplies or offers to supply labour for pursuing economic activities for the production of goods and services and, therefore, includes both employed and unemployed persons. NSO launched PLFS in April 2017. On the basis of PLFS, a quarterly bulletin is brought out giving estimates of labour force indicators namely unemployment rate, Worker Population Ratio (WPR), Labour Force Participation Rate (LFPR), distribution of workers by broad status in employment and industry of work in CWS. The estimates of unemployed persons in CWS give an average picture of unemployment in a short period of seven days during the survey period.

The CNX Nifty is currently trading at 15383.45, up by 22.85 points or 0.15% after trading in a range of 15183.40 and 15387.80. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.02%, Tata Steel up by 1.98%, Reliance Industries up by 1.82%, Bajaj Finance up by 1.72% and Hindalco up by 1.59%. On the flip side, Dr. Reddy's Lab down by 3.32%, TCS down by 1.83%, Wipro down by 1.82%, Sun Pharma down by 1.72% and Nestle down by 1.58% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 surged 510.78 points or 1.93% to 25,920.42, Straits Times fell 13.12 points or 0.42% to 3,084.31, Taiwan Weighted declined 237.28 points or 1.50% to 15,601.33, KOSPI lost 22.17 points or 0.90% to 2,429.24, Jakarta Composite plunged 129.49 points or 1.84% to 6,920.84 and Shanghai Composite was down by 0.64 points or 0.02% to 3,284.74, while Hang Seng jumped 154.43 points or 0.74% to 20,999.86.