Post Session: Quick Review

Indian equity benchmarks ended last trading day of week on a flat note amid rising crude oil prices. Markets made a negative start, as traders got cautious after World Bank projected a growth rate of 6.5 per cent for the Indian economy for the fiscal year 2022-23, a drop of one per cent from its previous June 2022 projections, citing deteriorating international environment. It added that private investment growth is likely to be dampened by heightened uncertainty and higher financing costs. Traders were concerned after credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the entities having reliance on equity infusions through initial public offerings/rights issues or monetisation of assets are likely to be impacted by tightening liquidity conditions and ensuing volatility in asset prices. Domestic investors overlooked Chief economic adviser V Anantha Nageswaran’s statement that India is still on course for 7% growth in the current fiscal year although downside risks dominate the upside risk but it's better placed than other countries.

In afternoon session, key indices extended downside to touch day’s low points. Sentiments got hit after rupee weakens past 82 per dollar mark for the first time against the US dollar amid a surge in crude and US bond yields. International crude oil advanced past $93 a barrel, up 11% this week spurred by Opec's production cut. Ten year US treasury yields have jumped nearly 18 basis points since Tuesday. Adding more worries among traders, a private report stated that India's rupee will trade near its record low against the mighty greenback beyond this year, buffeted by rising oil prices and an aggressive U.S. Federal Reserve rate-hiking campaign. However, in late afternoon session, markets managed to recover some losses to end the day on a flat note. Traders took support with Union Minister of Petroleum and Natural Gas Hardeep Singh Puri’s statement that India has handled the current energy crisis in a responsible and mature manner. The minister said that there is a huge potential of India-US collaboration in the energy sector.

On the global front, European markets were trading higher as investors awaited a key U.S. jobs report due later in the day that could shed more clarity on labor market conditions. Asian markets ended lower ahead of U.S. jobs data investors hope will persuade the Federal Reserve to ease off plans for more interest rate hikes. Tokyo, Hong Kong, Seoul and Sydney retreated. Chinese markets were closed for a holiday. Oil prices declined. Back home, in scrip specific, Titan Company gained over a 5% in intra-day trade, after it has witnessed healthy double-digit growth across most businesses with overall sales growing 18% Year-on- Year (Y-o-Y).

The BSE Sensex ended at 58,191.29, down by 30.81 points or 0.05% after trading in a range of 57,851.15 and 58,269.34. There were 12 stocks advancing against 18 stocks declining on the index. (Provisional)

The broader indices ended mixed; the BSE Mid cap index declined 0.15%, while Small cap index was up by 0.30%. (Provisional)

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.13%, Telecom up by 0.91%, Industrials up by 0.52%, Capital Goods up by 0.35% and Realty up by 0.27%, while Oil & Gas down by 0.78%, Energy down by 0.72%, Metal down by 0.63%, IT down by 0.57% and FMCG was down by 0.52% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Titan Company up by 5.26%, Power Grid up by 1.36%, NTPC up by 1.23%, Indusind Bank up by 0.90% and Maruti Suzuki up by 0.89%. On the flip side, Mahindra & Mahindra down by 1.31%, Ultratech Cement down by 1.29%, TCS down by 1.25%, SBI down by 1.07% and HCL Tech down by 1.00% were the top losers. (Provisional)

Meanwhile, citing deteriorating international environment, the World Bank in its latest report on ‘South Asia Economic Focus’ has downgraded India’s economic growth forecast to 6.5 per cent for the fiscal year 2022-23 (FY23), a drop of one per cent from its previous June 2022 projections. The Indian economy grew by 8.7 per cent in the previous year. However, it noted that India is recovering stronger than the rest of the world.

Hans Timmer, World Bank Chief Economist for South Asia said ‘The Indian economy has done well compared to the other countries in South Asia, with relatively strong growth performance... bounced back from the sharp contraction during the first phase of COVID’. He observed that India has done relatively well with the advantage that it doesn't have a large external debt, there are no problems coming from that side, and that there is prudent monetary policy. The Indian economy has done especially well in the services sector and especially service exports.

He further said ‘But we have downgraded the forecast for the fiscal year that just started and that is largely because the international environment is deteriorating for India and for all countries. We see kind of an inflection point in the middle of this year, and first signs of slowing across the world.’ He noted that the second half of the calendar year is weak in many countries and will be relatively weak also in India.

He said that's mainly because of two factors. One is the slowing of growth in the real economy of high-income countries. The other one is the global tightening of monetary policy that tightens financial markets and not just that it leads to capital outflows in many developing countries, but it also increases interest rates and uncertainty in developing countries which has a negative impact on investment.

The CNX Nifty ended at 17,314.65, down by 17.15 points or 0.10% after trading in a range of 17,216.95 and 17,337.35. There were 21 stocks advancing against 29 stocks declining on the index. (Provisional)

The top gainers on Nifty were Titan Company up by 5.31%, Power Grid up by 1.50%, ONGC up by 1.06%, Indusind Bank up by 1.04% and Grasim Industries up by 0.88%. On the flip side, Tata Consumer Products down by 1.69%, Coal India down by 1.63%, BPCL down by 1.52%, Mahindra & Mahindra down by 1.44% and Ultratech Cement down by 1.33% were the top losers. (Provisional)

European markets were trading higher, UK’s FTSE 100 increased 12.19 points or 0.17% to 7,009.46, France’s CAC increased 8.78 points or 0.15% to 5,945.20 and Germany’s DAX was up by 4.86 points or 0.04% to 12,475.64.

Asian markets settled lower on Friday amidst Wall Street's weak performance overnight ahead of a key US jobs report due later in the day for further clarity on labour market conditions, while hawkish comments from some Federal Reserve officials also kept investors cautious. Oil extended gains and were set for the biggest weekly gain since March after OPEC+ agreed to tighten global supply with a deal to cut production targets by 2 million bpd. Hong Kong shares declined, with Chinese property developers leading the slide on concerns over their financial health. Japanese shares dropped on worse-than-expected earnings outlook from heavyweights Advanced Micro Devices and Samsung Electronics, adding to headwinds from rising inflation and a weakening yen. Meanwhile, Chinese market was closed for the Golden Week holiday.