Benchmarks extend losses for second consecutive day

Indian equity benchmarks extended losses for second consecutive day on Friday in line with sell off in global markets. Markets opened with deep cuts and remained in negative territory for whole day as market participants remained on sidelines ahead of the industrial growth or Index of Industrial Production (IIP) data to be out later in the day. Traders also remained cautious with private report stating that retail inflation in India likely eased a bit last month but stayed above the Reserve Bank of India's upper threshold for a second straight month, keeping the central bank on course for further policy tightening. Some concern also came with the National Stock Exchange's provisional data showing that Foreign Institutional Investors (FIIs) emerged as net sellers in the capital market on Thursday as they sold shares worth Rs 561.78 crore.

Sentiments remained dampened in late afternoon deals amid reports that stock investors wealth eroded by more than Rs 2.67 lakh crore in early trade on Friday, March 10, as the markets witnessed a sell-off amid weak global trends. Traders overlooked Union Minister for State for Commerce and Industry Anupriya Patel’s statement that India's merchandise and services exports combined in the current financial year ending March will be close to $760-770 billion. The country's merchandise and services exports stood at $672 billion in the last fiscal.  Traders also paid no heed towards Australian Prime Minister Anthony Albanese’s statement that the Economic Cooperation and Trade Agreement (ECTA) signed between India and Australia is a transformative agreement, which will unlock the next level of potential in trade and investment.

On the global front, European markets were trading lower as investors assessed the potential fallout from the implosions of Silicon Valley Bank and Silvergate Capital. Asian markets settled lower on Friday amid concerns about the health of the U.S. banking sector and anxiety ahead of the all-important U.S. jobs data due later in the day that could set the tone for the U.S. rates outlook.

Finally, the BSE Sensex fell 671.15 points or 1.12% to 59,135.13 and the CNX Nifty was down by 176.70 points or 1.00% to 17,412.90.

The BSE Sensex touched high and low of 59,262.47 and 58,884.98, respectively. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.69%, while Small cap index was down by 0.59%.

The top gaining sectoral indices on the BSE were Utilities up by 1.21%, Power up by 1.08%, Oil & Gas up by 0.21%, Consumer Durables up by 0.17% and FMCG up by 0.03%, while Bankex down by 1.85%, Financial Services down by 1.77%, Capital Goods down by 1.08%, Realty down by 1.07% and Industrials down by 0.85% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 0.82%, Maruti Suzuki up by 0.76%, NTPC up by 0.75%, Sun Pharma up by 0.37% and Power Grid Corporation up by 0.31%. On the flip side, HDFC Bank down by 2.63%, SBI down by 2.12%, HDFC down by 2.09%, Indusind Bank down by 2.02% and Axis Bank down by 1.89% were the top losers.

Meanwhile, Reserve Bank of India’s Deputy Governor M Rajeshwar Rao has said that India needs to gear up to manage the exchange rate volatility as the country progresses on the path of internationalisation of rupee and freer capital account convertibility. He also said that internationalisation of rupee has its own benefits as well as challenges and risks which the country and the Reserve Bank of India will have to deal with.

He said as the economy grows and becomes more developed, the scope of participation in foreign exchange markets would change. He mentioned ‘With the increasing integration of the economy with the rest of the world, more and more entities are likely to, directly or indirectly, get exposed to foreign exchange risks. There are likely to be demands for permitting hedging of economic exposures.’

Moreover, he said a whole new market with a new set of market participants has opened up, with banks in India being allowed to participate in the offshore non-deliverable market for rupee derivatives in a bid to integrate markets. This is a part of the overall effort towards greater convertibility of rupee.

The CNX Nifty traded in a range of 17,451.50 and 17,324.35. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 1.06%, NTPC up by 0.84%, Maruti Suzuki up by 0.68%, Britannia Industries up by 0.43% and Power Grid Corporation up by 0.38%. On the flip side, Adani Enterprises down by 3.02%, HDFC Bank down by 2.61%, Apollo Hospital down by 2.33%, HDFC down by 2.07% and Indusind Bank down by 2.03% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 143.63 points or 1.82% to 7,736.35, France’s CAC fell 107.85 points or 1.47% to 7,208.03 and Germany’s DAX lost 252.74 points or 1.62% to 15,380.47.

Asian markets settled lower on Friday ahead of important US jobs data due later in the day for more cues on US monetary policy. Market sentiments declined further by tracking fall in Wall Street shares overnight following Silicon Valley Bank's surprise decision to sell much of its bond portfolio at a $1.8 billion loss that prompted concerns about the value of US banks' bond portfolios. Seoul shares declined after data showed South Korea logged a record high current account deficit in January. Moreover, Japanese shares fell as BoJ kept its controversial yield curve control program unchanged ahead of a leadership transition in April.