Domestic indices extend opening losses to trade deeply in red

Indian equity benchmarks started the session on negative note on Monday tracking weakness in global peers. Most of the Asian markets are trading lower as U.S. earnings season gets into full swing, while a raft of Chinese data will offer insight into how the world's second-largest economy is recovering. Domestic indices soon extend their opening losses and are trading deeply in red ahead of the wholesale price index (WPI) data to be out later in the day. Also, lower-than-expected set of earning from index heavyweight Infosys dampened sentiments in the markets. Infosys slipped over 11% and hit 52-week low. IT index leading the losers on the street with cut of over 6%. Traders largely overlooked Finance Minister Nirmala Sitharaman’s statement that Indian economy will stay on course and is likely to grow at 7 per cent in 2022-23.

On the sectoral front, edible oil industry stocks were in focus with industry body SEA’s statement that edible oil imports rose 8 per cent year-on-year in March to 11.35 lakh tonnes, and demanded that the duty difference between crude palm oil and refined palm oil should be increased to protect domestic refineries. In stock specific development, KIOCL rallied on bagging 2 orders worth Rs 3.81 crore.

The BSE Sensex is currently trading at 59677.27, down by 753.73 points or 1.25% after trading in a range of 59616.52 and 60407.86. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.11%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were Power up by 1.03%, Realty up by 0.92%, Utilities up by 0.88%, PSU up by 0.51%, Consumer Durables up by 0.48%, while IT down by 6.12%, TECK down by 5.73%, Telecom down by 0.84%, Capital Goods down by 0.56%, Industrials down by 0.45% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.34%, Ultratech Cement up by 2.20%, Indusind Bank up by 1.95%, Nestle up by 1.17% and Titan Company up by 1.04%. On the flip side, Infosys down by 11.52%, Tech Mahindra down by 6.34%, HCL Technologies down by 4.19%, TCS down by 2.71% and Wipro down by 2.34% were the top losers.

Meanwhile, expressing optimism over economic growth, Economic Advisory Council to the Prime Minister (EAC-PM) member Sanjeev Sanyal has said Indian economy will grow at around 6.5 per cent in the current fiscal (FY24) and will continue to be the fastest-growing major economy in the world, notwithstanding a modest cut in growth projections by multilateral lending agencies. He further said that given the uncertainties in the global economy, India's performance is clearly far ahead of any other comparable economy. He noted that ‘ADB (Asian Development Bank) and World Bank have only modestly reduced the (growth) forecast for this year. Even after this reduction, India will still be the fastest-growing major economy in the world’.

He said ‘It is not correct to say that we are falling behind, my own assessment is in line with what the Economic Survey published earlier this year that (India's economic) growth will be somewhere around six and a half per cent range, which is a good performance under the current circumstances’. Talking about what will take for India to grow at 8-9 per cent per annum, he said that due to the large number of reform measures taken by the Modi government, India's supply side is now capable of driving growth over 8 per cent. He highlighted ‘However, at a time when the rest of the world economy is rapidly slowing down, we will not be able to push growth too hard past the current level of six-and-a-half per cent because growth of 8 per cent type level would mean that our imports will dramatically go up at a time when our ability to push exports would be constrained by global demand’.

Therefore, Sanyal argued that from a macroeconomic stability perspective, India will have to be restrained in its expectations of what the country can do at this point of time. He said ‘However, should the world find itself in a more conducive environment which will happen eventually, then India will be easily able to accelerate its growth performance’. On the impact of the US and European banking crisis on India's financial sector, he said India's financial sector will not see any direct impact as the country has put in a lot of effort to clean up its banks and remove the non-performing assets (NPA's) using both capitalisation and the insolvency and bankruptcy process. Noting that Indian banks are well capitalised and have plenty of buffers, he said ‘Nonetheless, the fact is that we live in an interconnected world and therefore, economic shocks including financial shocks do have second-order impacts’. According to Sanyal, India needs to continue to be very vigilant.

The CNX Nifty is currently trading at 17636.60, down by 191.40 points or 1.07% after trading in a range of 17620.10 and 17863.00. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 2.34%, Ultratech Cement up by 2.15%, Indusind Bank up by 1.84%, Britannia Industries up by 1.40% and Nestle up by 1.30%. On the flip side, Infosys down by 11.55%, Tech Mahindra down by 6.30%, HCL Technologies down by 4.23%, TCS down by 2.71% and Wipro down by 2.29% were the top losers.

Asian markets are trading mostly in red; Jakarta Composite plunged 39.48 points or 0.58% to 6,779.09, Nikkei 225 slipped 15.52 points or 0.05% to 28,477.95, Taiwan Weighted lost 7.16 points or 0.04% to 15,922.27, KOSPI dropped 3.19 points or 0.12% to 2,568.30 and Straits Times fell 0.06 points or 0% to 3,302.60. On the other hand, Shanghai Composite strengthened 32.6 points or 0.97% to 3,370.75 and Hang Seng was up by 110.03 points or 0.54% to 20,548.84.