Equity indices struggle for direction in early deals; IT stocks led losers

Indian equity indices made negative start with minor cuts tracking weakness across global peers after the FOMC minutes showed that officials expect a mild recession in the US later this year. Continued rise in oil prices also dampened the sentiments in the domestic markets. Volatility to continue in the today’s trade ahead of F&O expiry later in the day. Markets tried to regain their lost ground but failed to remain in green terrain and came down below neutral lines in early deals. Traders were concerned over the growth prospects as the UN Trade and Development Conference (UNCTAD) in its latest Trade and Development Report Update stated that India's economic growth is projected to decelerate to 6 per cent in 2023 from 6.6 per cent in 2022.

Though, easing retail inflation and growth in industrial production lend some support to markets and restricted the downside. CPI-based retail inflation in India eased further and fell to a 15-month low of 5.66% in March on an annual basis as food inflation moderated on account of falling vegetable prices. Also, India's industrial output rose to 5.6 per cent in February from 5.5 per cent in January 2023, mainly due to good performance of the power, mining and manufacturing sectors. Besides, National Stock Exchange's provisional data showed that foreign institutional investors (FII) bought shares worth Rs 1,907.95 crore on April 12.

On the sectoral front, IT index dropped as IT bellwether company Tata Consultancy Services (TCS) posted healthy growth in Q4 of FY23, but broadly missed the street's expectations for the quarter. In stock specific development, Infosys came under pressure ahead of its earnings results due later in the day. However, Campus Activewear rose as it acquired assets from Marico Ind for capacity expansion.

The BSE Sensex is currently trading at 60362.36, down by 30.41 points or 0.05% after trading in a range of 60228.11 and 60423.98. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.31%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were Bankex up by 0.35%, FMCG up by 0.35%, Consumer Durables up by 0.24%, Auto up by 0.22%, PSU up by 0.22%, while IT down by 1.40%, TECK down by 1.33%, Oil & Gas down by 0.23%, Capital Goods down by 0.07%, Utilities down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 1.14%, Hindustan Unilever up by 0.85%, Bajaj Finserv up by 0.80%, Nestle up by 0.64% and Reliance Industries up by 0.56%. On the flip side, HCL Technologies down by 1.74%, Infosys down by 1.65%, TCS down by 1.64%, Tech Mahindra down by 1.63% and Indusind Bank down by 1.25% were the top losers.

Meanwhile, the UN Trade and Development Conference (UNCTAD), in its latest Trade and Development Report Update, has said that India's economic growth is projected to decelerate to 6 per cent in 2023 from 6.6 per cent in 2022. It expects global growth in 2023 to drop to 2.1 per cent, compared to the 2.2 per cent projected in September 2022, assuming the financial fallout from higher interest rates is contained to the bank runs and bailouts of the first quarter. It warned that developing countries are facing years of difficulty as the global economy slows down amid heightened financial turbulence. Annual growth across large parts of the global economy will fall below the performance registered before the pandemic and well below the decade of strong growth before the global financial crisis.

Besides, it said India grew 6.6 per cent in 2022, ceding the pole position among G20 countries in 2022 to oil-rich Saudi Arabia, which grew at 8.6 per cent. Meanwhile, as current government spending has been weakening, but export orders remain on the rise, India's GDP growth is projected to decelerate to 6.0 per cent in 2023. For India, it said the positive effect of high public and private investment and consumption as well as rising exports was partly offset by higher energy import bills, which deepened the current account deficit and ate up reserves.

The report mentioned ‘The Reserve Bank of India started tightening its policy stance during the spring of 2022 to limit damage caused by foreign capital outflows, a weakening currency and inflation risks. Higher financing cost slightly dented buoyant economic activity, and over-leveraging in the corporate sector may become a factor of financial instability.’ It noted in view of financing its growth ambitions, the Indian government has committed to massive infrastructure investment. In 2020 and 2021 and in the energy sector alone, funds amounting to $160 billion had been committed to fossil and non-fossil projects alike.

The CNX Nifty is currently trading at 17805.80, down by 6.60 points or 0.04% after trading in a range of 17767.95 and 17827.85. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 2.85%, Eicher Motors up by 1.91%, Power Grid up by 1.06%, HDFC Life Insurance up by 1.03% and ONGC up by 0.86%. On the flip side, Infosys down by 1.76%, TCS down by 1.74%, HCL Technologies down by 1.70%, Tech Mahindra down by 1.61% and Indusind Bank down by 1.28% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 107.25 points or 0.53% to 20,202.61, Taiwan Weighted lost 66.34 points or 0.42% to 15,866.63, Jakarta Composite plunged 27.1 points or 0.4% to 6,771.86, Straits Times fell 2.32 points or 0.07% to 3,283.80 and KOSPI dropped 1.65 points or 0.06% to 2,548.99. On the other hand, Nikkei 225 surged 38.19 points or 0.14% to 28,120.89 and Shanghai Composite was up by 1.65 points or 0.05% to 3,328.83.