Late hour recovery helps markets to end in green on Thursday

Late hour recovery helped Indian equity benchmarks to end in green terrain on Thursday, with both Sensex and Nifty closing marginally higher. After a negative start, markets remained lower for the most part of the trading session, 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. 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.

Market participants paid no heed towards easing retail inflation and growth of industrial production. 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.

Losses got intensified during afternoon deals, as investors remained cautious after Union Finance Minister Nirmala Sitharaman said that India remains concerned about the global economic outlook and geopolitical environment, despite this year's projected growth rate of over six percent for the country's economy. Some concerns also came as credit rating agency, India Ratings and Research (Ind-Ra) in its latest report said that non-bank finance companies (including housing finance companies) are likely to face increased funding challenges in FY24, which is likely to impact their growth aspirations.

However, in the last leg of the trade, following positive European markets, key indices staged sharp recovery to settle its heads above water for the ninth straight session, buoyed by fag-end buying in banking, Auto and realty stocks. Some relief came with Commerce and Industry Minister Piyush Goyal’s statement that the country's exports rose by about 6 per cent to a record $447 billion during 2022-23 on account of healthy growth in the outbound shipments of sectors such as petroleum, pharma and chemicals and marine.

On the global front, European markets were trading mostly in green, as Eurozone industrial production grew at a faster pace in February underpinned by increases across all sub-sectors. Industrial production posted a monthly growth of 1.5 percent after rising 1.0 percent in January. Asian markets ended mixed, even after export prices in South Korea were up 2.0 percent on month in March, accelerating from the 0.8 percent gain in February. On a yearly basis, export prices tumbled 6.4 percent after slipping 2.6 percent in the previous month.

Finally, the BSE Sensex rose 38.23 points or 0.06% to 60,431.00 and the CNX Nifty was up by 15.60 points or 0.09% to 17,828.00.

The BSE Sensex touched high and low of 60,486.91 and 60,081.43, respectively. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index surged by 0.16%, while Small cap index was up by 0.33%.

The top gaining sectoral indices on the BSE were Bankex up by 1.38%, Realty up by 1.17%, Auto up by 0.35%, Consumer Durables up by 0.22% and FMCG up by 0.20%, while IT down by 2.05%, TECK down by 1.94%, Capital Goods down by 0.57%, Oil & Gas down by 0.55% and Healthcare down by 0.41% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.15%, Power Grid up by 1.74%, Axis Bank up by 1.62%, Bajaj Finserv up by 1.46% and Kotak Mahindra Bank up by 1.41%. On the flip side, Infosys down by 2.79%, Tech Mahindra down by 2.13%, HCL Tech. down by 2.09%, NTPC down by 1.62% and TCS down by 1.61% were the top losers.

Meanwhile, the commerce ministry has recommended continuation of 18.95 per cent countervailing duty (CVD) on certain flat-rolled steel products imported from China for five years to guard domestic manufacturers from subsidised imports. The duty was recommended by the ministry's investigation arm Directorate General of Trade Remedies (DGTR) after conducting a sunset review investigation on imports of 'hot rolled and cold rolled stainless steel flat products' imported from China.

Jindal Stainless and Jindal Stainless (Hisar) had jointly filed an application before the DGTR for initiation of this probe. They had sought the continuation of the countervailing duty on the imports, according to a notification of the directorate. According to the applicants, the expiry of the existing duty was likely to result in continuation/recurrence of subsidised imports of these goods from China and that impact the domestic industry. The imports have increased to 3,43,893 (annualised) metric tonnes (MT) in April-September 2022, and 4,42,058 MT (annualised) in October-December 2022, thus showing continuous increase.

The directorate in its findings have concluded that the Chinese imports are undercutting the domestic prices and there is a likelihood of continuation of subsidisation on the products by China if the existing CVD was discountinued in the light of the surplus capacities maintained by the Chinese producers. The Authority considers it appropriate and necessary to recommend continuation of definitive duty for a period of five years on all imports of the subject goods from the subject country. While the DGTR recommends the duty, the finance ministry takes the final decision to impose the same.

The CNX Nifty traded in a range of 17,842.15 and 17,729.65. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 3.21%, HDFC Life Insurance up by 2.86%, Eicher Motors up by 2.71%, Apollo Hospitals Enterprise up by 1.81% and Power Grid up by 1.72%. On the flip side, Infosys down by 2.74%, Tech Mahindra down by 2.08%, HCL Tech. down by 2.07%, TCS down by 1.63% and NTPC down by 1.56% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 increased 0.22 points or 0% to 7,825.06 and France’s CAC rose 66.86 points or 0.9% to 7,463.80, while Germany’s DAX lost 11.59 points or 0.07% to 15,692.01.

Asian markets recovered from initial losses and ended mixed on Thursday after minutes from the Fed's Open Markets Committee March 21-22 meeting indicated that Fed officials see the U.S. economy entering a ‘mild recession’ by year's end in the wake of the banking crisis. Besides, U.S. inflation rate eased to 5 percent in March, the lowest rise in almost 2 years, but many market participants said they still expect the Fed to raise rates by another quarter point early next month. However, Japanese shares rose modestly to extend gains for a fifth day running on optimism of a recovery in the domestic retail sector. Meanwhile, Shares of embattled Chinese developer Sunac China Holdings sank 53.5 percent in Hong Kong as the stock resumed trade following a suspension of more than a year.