Markets trim some of opening losses in early deals

Indian equity benchmarks made negative start with cut of over half a percent on Wednesday following weakness in global peers. Investors also remain cautious ahead of US Federal Reserve's monetary policy announcement. The Fed is widely expected to raise rates by 25 basis points. Markets participants are keeping eyes on services PMI data to be out later in the day coupled with more of financial results from India Inc for domestic cues. Markets trimmed some of their losses and are trading with cut of around 0.35% each in early deals. Traders managed to cut some losses taking support amid sustained foreign fund inflows in domestic markets. Foreign institutional investors (FII) bought shares worth Rs 1,997.35 crore on May 2, provisional data from the National Stock Exchange showed. 

On the global front, Asian markets are trading lower, following the broadly negative cues from global markets overnight, as traders cashed in on recent strength in the markets ahead of the US Federal Reserve's monetary policy announcement later in the day. Concerns about the US reaching an agreement on raising the U.S. debt ceiling is also hurting sentiment. The Japanese stock market is closed on account of Showa Day holiday. China is closed for Labor Day. Back home, IndiGo and SpiceJet gained following the insolvency filing by Wadia-owned Go First, which was driven by a cash crunch due to the grounding of nearly half its 57 aircraft.

The BSE Sensex is currently trading at 61117.62, down by 237.09 points or 0.39% after trading in a range of 61024.44 and 61274.96. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.27%, while Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Utilities up by 0.71%, Realty up by 0.68%, Power up by 0.61%, FMCG up by 0.48%, Industrials up by 0.30%, while IT down by 0.78%, TECK down by 0.74%, Metal down by 0.73%, Bankex down by 0.43%, Telecom down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.14%, Power Grid up by 0.71%, ITC up by 0.64%, Titan Co up by 0.56% and Nestle up by 0.53%. On the flip side, Bajaj Finance down by 1.11%, Bajaj Finserv down by 0.95%, ICICI Bank down by 0.91%, Reliance Industries down by 0.90% and Tech Mahindra down by 0.90% were the top losers.

Meanwhile, the International Monetary Fund (IMF) in its ‘Regional Economic Outlook - Asia and Pacific’ report has stated that growth in the dynamic Asia-Pacific region is likely to increase to 4.6% this year (2023) from the 3.8% recorded in 2022. It added that the region would contribute around 70% of global growth. It noted that Asia and Pacific will be the most dynamic of the world’s major regions in 2023, predominantly driven by the buoyant outlook for China and India, and added that the two largest emerging market economies of the region are expected to contribute around half of global growth this year, with the rest of Asia and Pacific contributing an additional fifth.

It highlighted that Asia’s dynamism will be driven primarily by the recovery in China and resilient growth in India, while growth in the rest of Asia is expected to bottom out in 2023, in line with other regions. Meanwhile, the IMF said 2023 looks to be a challenging year for the global economy, with global growth decelerating as the effects of monetary policy tightening (through consistent interest rate hikes) and Russia’s war in Ukraine continue to weigh on economic activity. Also, persistent inflationary pressures, and recent financial sector problems in the U.S. and Europe, injecting additional uncertainty into an ‘already complex economic landscape’. 

The growth in the Asia Pacific region is also getting a fresh impetus from China’s reopening of its economy after extended COVID-19 related restrictions. However, the IMF cautioned that this dynamic outlook does not imply that policymakers in the region can afford to be complacent. It added ‘monetary policy should remain tight until inflation falls durably back within target. The exceptions are China and Japan, where output is below potential and inflation expectations have stayed muted’.

The CNX Nifty is currently trading at 18078.90, down by 68.75 points or 0.38% after trading in a range of 18050.60 and 18113.80. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were NTPC up by 1.34%, BPCL up by 0.98%, Power Grid up by 0.73%, Adani Enterprises up by 0.68% and ITC up by 0.67%. On the flip side, Hindalco down by 2.01%, Britannia Industries down by 1.13%, Bajaj Finance down by 1.11%, ONGC down by 1.10% and HCL Technologies down by 1.02% were the top losers.

Asian markets are trading in red; Hang Seng declined 354.04 points or 1.81% to 19,579.77, Taiwan Weighted lost 81.59 points or 0.52% to 15,554.89, Jakarta Composite plunged 76.56 points or 1.13% to 6,786.74, Straits Times fell 24.89 points or 0.76% to 3,257.10 and KOSPI was down by 21.82 points or 0.87% to 2,502.57.