Sensex, Nifty continue to linger under selling pressure

Indian equity benchmarks continued to linger under selling pressure in early afternoon deals, on the back of weak cues from other Asian markets. Selling at TECK and IT counters also kept markets lower. Traders got cautious, as the International Monetary Fund said that economies across the Middle East and Central Asia will likely slow this year as persistently high inflation and rising interest rates bite into their post-pandemic gains. The IMF's Regional Economic Outlook blamed in part rising energy costs, as well as elevated food prices, for the estimated slower growth. 

The street paid no heed towards reports that India’s services sector witnessed a fastest growth in the month of April, with demand strength promoting the fastest increases in new business and output in close to 13 years. Companies became more optimistic towards future business activity, but job creation remained negligible. As per the survey report, the seasonally adjusted S&P Global India Services PMI Business Activity Index jumped to 62.0 in April from 57.8 in March. Further, the S&P Global India Composite PMI Output Index -- which measures both manufacturing and services -- also surged to 61.6 in April from 58.4 in March.

On the global front, Asian markets were trading mostly in red, even after Hong Kong's economy expanded for the first time in a year in the first quarter, largely on the back of strong growth in private consumption amid a strong recovery of inbound tourism and domestic demand. The advance estimates from the Census and Statistics Department showed that gross domestic product advanced 2.7 percent year-over-year in the first quarter, reversing a 4.1 percent fall in the final quarter of 2022. Further, this was the first expansion since the first quarter of 2022.

The BSE Sensex is currently trading at 61074.97, down by 279.74 points or 0.46% after trading in a range of 61024.44 and 61274.96. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.38%, while Small cap index was up by 0.32%.

The top gaining sectoral indices on the BSE were Realty up by 0.77%, FMCG up by 0.76%, Industrials up by 0.08%, Consumer Durables up by 0.06% and PSU up by 0.06%, while TECK down by 0.86%, IT down by 0.83%, Telecom down by 0.78%, Metal down by 0.58% and Bankex down by 0.54% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.21%, Asian Paints up by 1.14%, ITC up by 0.67%, Ultratech Cement up by 0.59% and Nestle up by 0.50%. On the flip side, Axis Bank down by 1.59%, Larsen & Toubro down by 1.42%, TCS down by 1.32%, Bajaj Finance down by 1.15% and Sun Pharma down by 1.15% were the top losers.

Meanwhile, Food and Consumer Affairs Minister Piyush Goyal has expressed confidence that the country will achieve the target of 20 per cent blending of ethanol with petrol by 2025 and asserted that maize crop will play an important role in implementation of this programme. He said ethanol is a sunrise sector and asked the industry to set up factories for manufacturing of this green fuel which can operate on dual feed stock (sugarcane and food grains).

The minister highlighted that the blending of ethanol with petrol has increased to 10 per cent in 2021-22 marketing year from just 1.53 per cent in 2013-14 on the back of efforts made by farmers and industry, aided by favourable government policies. He said the supply of ethanol to oil marketing companies (OMCs) increased to 408 crore litre in 2021-22 from 38 crore litre in 2013-14. He termed the target of 20 per cent blending of ethanol with petrol as ‘ambitious and bold’ but said this can be achieved if all stakeholders work towards it sincerely.

The minister stressed on the need to boost ethanol production to meet this target and said the focus should be now on making ethanol from maize crop, since there is limitation to increase supply from sugarcane crop. He noted that to achieve the target of 20 per cent by 2025, about 1,016 crore litres of ethanol would be required. About 334 crore ethanol would be required for other usage. Therefore, there is a need to create a capacity of 1,700 crore litres, considering plant operates at 80 per cent efficiency. He added the ethanol production has significantly helped sugar industry as well as sugarcane farmers and the same can be replicated in maize.

The CNX Nifty is currently trading at 18065.15, down by 82.50 points or 0.45% after trading in a range of 18050.60 and 18116.35. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 1.18%, Asian Paints up by 1.07%, Coal India up by 0.93%, Cipla up by 0.69% and Ultratech Cement up by 0.66%. On the flip side, Axis Bank down by 1.54%, ONGC down by 1.46%, Larsen & Toubro down by 1.44%, HDFC Life Insurance down by 1.37% and TCS down by 1.35% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 290.09 points or 1.48% to 19,643.72, Taiwan Weighted lost 83.07 points or 0.53% to 15,553.41, Jakarta Composite plunged 74.38 points or 1.1% to 6,788.92, Straits Times fell 26.55 points or 0.82% to 3,255.44 and KOSPI dropped 22.99 points or 0.92% to 2,501.40.