Bourses cut some losses in late afternoon session

Indian equity markets trimmed some of their losses in late afternoon session, but continued to trade below the neutral lines. Traders were seen piling up positions in FMCG sector while selling was witnessed in Utilities, Power and Capital Goods sector stocks. Some support came in as commerce and Industry Minister Piyush Goyal said that the government is working to extend incentives under the production linked incentive (PLI) scheme to more sectors. The objective of the PLI scheme is to make domestic manufacturing globally competitive, create global champions in manufacturing, boost exports and create jobs. On the global front, Asian markets were trading mostly in red after Russian President Vladimir Putin announced a partial military mobilization in the country, bringing geopolitical tensions to the forefront. European markets were trading mostly in red as investors await the Fed's interest-rate decision, the accompanying statement and Chair Jerome Powell's press conference later in the day for clues as to whether the central bank remains primarily focused on inflation.

The BSE Sensex is currently trading at 59647.68, down by 72.06 points or 0.12% after trading in a range of 59275.40 and 59799.04. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.22%, while Small cap index was down by 0.29%.

The only gaining sectoral indices on the BSE were FMCG up by 1.33% and Auto was up by 0.05%, while Utilities down by 1.78%, Power down by 1.65%, Capital Goods down by 0.85%, Oil & Gas down by 0.76% and PSU down by 0.62% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.97%, Hindustan Unilever up by 1.60%, Bajaj Finance up by 1.13%, Reliance Industries up by 0.78% and Tech Mahindra up by 0.70%. On the flip side, Indusind Bank down by 2.39%, NTPC down by 1.75%, HCL Tech down by 1.42%, Power Grid down by 1.40% and Dr. Reddy's Lab down by 1.21% were the top losers.

Meanwhile, the Asian Development Bank (ADB) in an update of its flagship economic publication, Asian Development Outlook (ADO) has lowered its 2022 economic growth outlook for India, amid sluggish global demand and tightening of monetary policy to manage inflationary pressures from elevated prices for oil and other commodities. ADB forecasts growth of 7.0% for fiscal year (FY) 2022 (ending March 31, 2023). That compares with a projection of 7.5% in April. The growth outlook for 2023 is also revised down to 7.2% from 8.0%.

Besides, it stated Inflation is forecast to remain elevated over the next 2 years, averaging 6.7% in FY2022 before moderating to 5.8% in FY2023. High inflation has led India’s central bank, the Reserve Bank of India, to increase policy rates, thereby raising the cost of borrowing. Inflationary pressures will crimp private consumption. However, subsidized fertilizer and gas, free food distribution, and excise duty cuts will help offset some of the impacts of high inflation on consumers.

Moreover, it said the services sector is expected to remain buoyant due to the lifting of COVID-19 restrictions. However, the manufacturing sector is expected to grow slower because of rising input costs. Agriculture value-added is likely to be marginally lower, as the sown area has declined, and the monsoon remains uneven. A slowdown in global growth will result in sluggish exports, while the value of imports is likely to increase.

The CNX Nifty is currently trading at 17778.60, down by 37.65 points or 0.21% after trading in a range of 17663.60 and 17838.70. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Britannia up by 2.84%, ITC up by 2.01%, Apollo Hospital up by 1.60%, Hindustan Unilever up by 1.57% and Bajaj Finance up by 1.16%. On the flip side, Shree Cement down by 4.46%, Adani Ports down by 2.86%, Indusind Bank down by 2.42%, NTPC down by 1.77% and Power Grid down by 1.48% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 slipped 375.29 points or 1.36% to 27,313.13, Hang Seng decreased 336.80 points or 1.79% to 18,444.62, Taiwan Weighted dropped 124.78 points or 0.86% to 14,424.52, KOSPI fell 20.64 points or 0.87% to 2,347.21, Jakarta Composite lost 8.64 points or 0.12% to 7,188.31 and Shanghai Composite was down by 5.23 points or 0.17% to 3,117.18. On the flip side, Straits Times was up by 0.51 points or 0.02% to 3,267.45.

European markets were trading mostly in red, France’s CAC decreased 0.94 points or 0.02% to 5,978.53 and Germany’s DAX was down by 25.74 points or 0.2% to 12,645.09. On the flip side, UK’s FTSE 100 was up by 42.95 points or 0.6% to 7,235.61.