Post Session: Quick Review

Indian equity benchmarks ended the disappointing day of trade with a cut of around a half percent as traders remained on sidelines ahead of the US Federal Reserve's meeting outcome. After making a negative start, key gauges witnessed sluggish trade, as traders were cautious with chief economic advisor V Anantha Nageswaran’s statement that Indian economy will grow at over 7 per cent, down from above 8 per cent of growth rate projected in January. He, however, said that the economic momentum and the animal spirits are unmistakable.

Markets extended losses as sentiments remain dampened after Asian Development Bank (ADB) has slashed India's economic growth projection for 2022-23 to 7 per cent from 7.2 per cent earlier, citing higher than expected inflation and monetary tightening. Sentiments also weighed down on report that retail inflation for farm and rural workers increased to 6.94 per cent and 7.26 per cent, respectively, in August mainly due to higher prices of certain food items. In July, retail inflation for farm and rural workers stood at 6.60 per cent and 6.82 per cent respectively. Markets managed to pare most of the losses in second half of the trade as traders opted to buy beaten down but fundamentally strong stocks at lower levels. Some support also came with Commerce and Industry Minister Piyush Goyal’s statement that the government is working to extend incentives under the production linked incentive (PLI) scheme to more sectors. The government has announced PLI schemes for 14 sectors, including white goods, textiles and auto components. The recovery proved short-lived as traders once again sold risky assets in last leg of the trade ahead of Fed meeting.

On the global front, European markets were trading higher as investors awaited a Federal Reserve rate decision and monitored increased political tensions with Russia. Asian markets settled lower, tracking losses in Wall Street overnight due to caution ahead of the Fed's rate hike announcement due later in the day, while fears of a global recession also weighed on market sentiments. Back home, the commerce ministry is likely to release the new five-year foreign trade policy (FTP) on September 29, 2022 with a view to promoting the country's outbound shipments. The current foreign trade policy (2015-20) is in force till September 30, 2022.

The BSE Sensex ended at 59,456.78, down by 262.96 points or 0.44% after trading in a range of 59,275.40 and 59,799.04. There were 7 stocks advancing against 23 stocks declining on the index (provisional).

The broader indices ended in red; the BSE Mid cap index was down by 0.63%, while Small cap index down by 0.69% (provisional).

The only gaining sectoral indices on the BSE were FMCG up by 1.14%, while Utilities down by 2.31%, Power down by 2.19%, Capital Goods down by 1.36%, Oil & Gas down by 1.33% and Realty was down by 1.19% were the top losing indices on BSE (provisional).

The top gainers on the Sensex were Hindustan Unilever up by 1.55%, ITC up by 1.53%, Bajaj Finance up by 0.77%, Tech Mahindra up by 0.51% and Mahindra & Mahindra up by 0.27%. On the flip side, Power Grid down by 3.46%, Indusind Bank down by 3.22%, Ultratech Cement down by 2.69%, NTPC down by 1.83% and Larsen & Toubro down by 1.67% were the top losers (provisional).

Meanwhile, expressing some cautiousness over India’s economic growth, Chief Economic Advisor (CEA) V Anantha Nageswaran has said Indian economy will grow at over 7 per cent in the current fiscal year (FY23), down from above 8 per cent of growth rate projected in January.

However, he said that the economic momentum and the animal spirits are ‘unmistakable’. He said the world is still undergoing the aftereffects of Covid pandemic and the ongoing war in Europe triggered by Russia’s invasion of Ukraine, suggesting that these factors are hurting growth.

The economic survey released before the annual budget in January this year had estimated FY23 growth to come at 8-8.5 per cent. The RBI had estimated the GDP to grow at 7.2 per cent, but there are some expectation of a downward revision of the estimate soon.

The CNX Nifty is currently trading at 17,718.35, down by 97.90 points or 0.55% after trading in a range of 17,663.60 and 17,838.70. There were 12 stocks advancing against 37 stocks declining on the index, while 1 stock remain unchanged (provisional).

The top gainers on Nifty were Britannia up by 3.15%, Hindustan Unilever up by 1.55%, ITC up by 1.47%, Apollo Hospital up by 1.00% and Coal India up by 0.74%. On the flip side, Shree Cement down by 5.24%, Adani Ports down by 3.85%, Indusind Bank down by 3.15%, Ultratech Cement down by 2.64% and Power Grid down by 2.43% were the top losers (provisional).

European markets were trading higher, UK’s FTSE 100 increased 47.21 points or 0.66% to 7,239.87, France’s CAC increased 11.70 points or 0.2% to 5,991.17 and Germany’s DAX was up by 3.14 points or 0.02% to 12,673.97.

Asian markets settled lower on Wednesday, tracking losses in Wall Street overnight due to caution ahead of the Fed's rate hike announcement due later in the day, while fears of a global recession also weighed on market sentiments. The Bank of England, the Swiss National Bank and the Bank of Japan will announce their monetary policy decisions on Thursday. Market sentiments were also hurt by Russian President Vladimir Putin's announcement of a partial military mobilisation in Russia. Chinese shares slipped as the Asian Development Bank (ADB) cut its economic growth forecast for China to 3.3% for 2022 from the previous forecast of a 5.0% expansion, while ADB also cut its growth forecast for developing Asian economies to 4.3% this year from a previous projection of a 5.2% expansion amid the continued rise in inflation in the region.