Benchmarks end flat in subdued trading session

Indian equity benchmarks ended flat on Friday as cautious undertone prevailed as investors awaited earnings results from heavyweights Reliance Industries and ICICI Bank for directional cues. Markets made a cautious start and soon slipped into red terrain, as traders got cautious after retail inflation for farm labour and rural workers rose marginally to 7.01 percent and 6.94 percent, respectively, in March compared to February this year, mainly due to higher prices of certain food items. Some concerns also came as a report by Acuite Ratings stated that India's economic activity is expected to decline and witness a lower growth print in FY24 on the back of a buoyancy in the services sector, moderation in inflation and the consistency in public sector capital expenditure.

Markets extended fall in afternoon session amid reports that GST evasion detection by tax officers almost doubled year-on-year to over Rs 1.01 lakh crore in the just concluded 2022-23 fiscal. Sentiments remained weak as minutes of this month’s Monetary Policy Committee (MPC) meeting showed India’s current rate tightening cycle may not be over as more hikes could be warranted to align inflation towards the central bank’s medium term target of 4%. Adding to the pessimism, National Stock Exchange's provisional data showed foreign institutional investors (FII) sold shares worth Rs 1,169.32 crore on April 20. However, markets managed to cut all of their initial losses to settle flat, taking support with rating agency ICRA stating that India’s real GDP growth is likely to have risen to 4.9% YoY in Q4 FY2023 from the provisional 4.4% in Q3 FY2023, with the softening of commodity price pressures. Meanwhile, the retirement fund body, Employees' Provident Fund Organisation’s (EPFO) latest data report showed that India created 1396185 new jobs in the month of February 2023 as against revised figure of 1299220 in January 2023.

On the global front, European markets were trading mostly in red despite a survey showed the eurozone economy's growth accelerated in April and hit an 11-month high. Data from the HCOB Flash Eurozone purchasing managers' index (PMI) survey published by S&P Global rose to 54.4 in April from 53.7 in March. Asian markets settled mostly lower as U.S. earnings and economic data showed signs of weakness. Fight over raising the U.S. debt ceiling and increasing Sino-U.S. tensions also weighed on markets, heading into the weekend.

Finally, the BSE Sensex rose 22.71 points or 0.04% to 59,655.06 and the CNX Nifty was down by 0.40 points to 17,624.05.

The BSE Sensex touched high and low of 59,781.36 and 59,412.81, respectively. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.36%, while Small cap index was down by 0.27%.

The top gaining sectoral indices on the BSE were FMCG up by 0.83%, IT up by 0.61%, Telecom up by 0.59%, TECK up by 0.49% and Healthcare up by 0.21%, while Realty down by 2.07%, Metal down by 1.03%, Auto down by 0.94%, Capital Goods down by 0.61% and Industrials down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.99%, TCS up by 1.84%, Wipro up by 1.42%, Asian Paints up by 1.27% and HCL Technologies up by 1.09%. On the flip side, Tech Mahindra down by 2.26%, Maruti Suzuki down by 1.86%, Tata Steel down by 1.71%, Ultratech Cement down by 1.49% and Tata Motors down by 1.22% were the top losers.

Meanwhile, rating agency ICRA in its latest report titled ‘Business Activity Monitor - An Index of High Frequency Economic Indicators’ has stated that India’s real GDP growth is likely to have risen to 4.9% YoY in Q4 FY2023 from the provisional 4.4% in Q3 FY2023, with the softening of commodity price pressures.

Notwithstanding higher volumes for most indicators, it said India’s GDP growth is likely to moderate to 6.9% in FY2023 from 9.1% in FY2022 given the margin compression in some industrial sectors owing to higher commodity prices, even as services sector displayed a robust performance in FY2023.

The agency said that growth in Q4 FY2023 will be driven by higher volumes of few indicators in ICRA’s set largely related to services sector, including, domestic airlines’ passenger traffic, petrol consumption, rail freight and ports cargo traffic, as well as GST e-way bills in Q4 FY2023. These trends, along with an expected rise in rabi output as well as softer commodity prices will support the growth.

The CNX Nifty traded in a range of 17,663.20 and 17,553.95. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.92%, TCS up by 1.75%, Britannia Industries up by 1.73%, Wipro up by 1.42% and Cipla up by 1.32%. On the flip side, HDFC Life Insurance down by 3.16%, Tech Mahindra down by 2.25%, Adani Enterprises down by 2.22%, SBI Life Insurance down by 1.80% and Tata Steel down by 1.76% were the top losers.

European markets were trading mostly in red; France’s CAC fell 5.97 points or 0.08% to 7,532.74 and Germany’s DAX lost 61.74 points or 0.39% to 15,734.23, while UK’s FTSE 100 increased 4.57 points or 0.06% to 7,907.18.

Asian markets settled mostly lower in cautious trading on Friday in fears of a possible recession in this year. Overnight fall in Wall Street shares in reaction to weak economic data and a mixed bag of earnings from US companies also weighed on market sentiments. Chinese and Hong Kong shares dropped after China's uneven economic recovery and increasing Sino-US tensions kept sentiments bearish. Moreover, Japanese shares declined ahead to next week's Bank of Japan policy meeting for directional cues. Meanwhile, Japan’s core inflation for March came in at 3.1%, unchanged from February, data showed.