Domestic indices erase opening gains to trade flat with negative bias

Indian equity benchmarks opened in green on Thursday tracking positive cues from the US markets overnight after data showed U.S. inflation slowed slightly more than expected in April. Soon, markets erased their gains and slipped below neutral lines in early deals to trade flat with negative bias as investors reacted to mixed earnings updates. Selling at Capital Goods, Industrials and Metal counters weighted down on the domestic indices. Downside remained capped taking some support with Industry body PHDCCI’s statement that enhanced competitiveness of the Indian economy will attract more investments and create new employment opportunities for the growing young population in the country. However, broader indices are outperforming larger peers with gains of around half a percent. 

On the global front, most of the Asian markets are trading lower as traders remain cautious and assess the global economic and monetary policy outlook after US inflation slows to below 5 percent for the first time two years. Traders worry the slowdown in the pace of price growth is partly due to the U.S. heading for a recession. Back home, the government has extended the deadline to May 31 for Goods Transport Agencies to exercise the option of paying GST on forward charge basis for current fiscal. In stock specific development, Dr Reddy's Laboratories plunged after its fourth-quarter profit lagged Street's estimates.

The BSE Sensex is currently trading at 61896.36, down by 43.84 points or 0.07% after trading in a range of 61868.89 and 62168.22. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.41%, while Small cap index was up by 0.66%.

The top gaining sectoral indices on the BSE were Power up by 0.82%, Utilities up by 0.72%, PSU up by 0.65%, Oil & Gas up by 0.55% and IT up by 0.50%, while Capital Goods down by 2.08%, Industrials down by 0.97%, Metal down by 0.73%, Healthcare down by 0.49%, Telecom down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 0.99%, Asian Paints up by 0.79%, Tech Mahindra up by 0.70%, HCL Tech. up by 0.58% and Bajaj Finserv up by 0.55%. On the flip side, Larsen & Toubro down by 5.07%, Bharti Airtel down by 1.17%, ITC down by 0.83%, Tata Steel down by 0.37% and Tata Motors down by 0.24% were the top losers.

Meanwhile, Industry body -- PHD Chamber of Commerce and Industry (PHDCCI) has said enhanced competitiveness of the Indian economy will attract more investments and create new employment opportunities for the growing young population in the country. In a study, the chamber said India is constantly growing above the pre-Covid level of GDP growth showing its strong resilience post-pandemic and geopolitical developments. It noted that according to the recent IMF data, India recovered significantly from (-)5.8 per cent GDP growth in 2020 to 9.1 per cent in 2021 and 6.8 per cent in 2022 with projected growth rate of 5.9 per cent in 2023.

It also said ‘the growth rates for 2021 and 2022 (average) are significantly above the growth rate of 3.9 per cent posted in pre-pandemic year 2019’. Saket Dalmia, President, PHDCCI said the growth projections for 2023 to 2028 are also at the highest as compared with the top 10 leading economies. He said ‘Going ahead, continued economic reforms in India would further strengthen the economic fundamentals of the country to maintain steady economic growth trajectory in the coming months’. He added strengthening of India's connectivity with Global Value Chains (GVCs) will help improve supply side bottlenecks and reduce costs of doing business.

He said ‘however, industry needs a great hand-holding in such a difficult environment caused by global economic uncertainties and volatile inflationary conditions’. The chamber also stressed that on the need to focus more on the manufacturing sector as high cost of borrowings, high prices of raw materials have impacted the price- cost margins of the producers. it highlighted that reduced cost of doing business such as easier compliances and a robust single-window system will enhance ease of doing business in the country.

The CNX Nifty is currently trading at 18295.60, down by 19.50 points or 0.11% after trading in a range of 18289.35 and 18389.70. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 3.08%, Adani Ports & SEZ up by 1.26%, NTPC up by 0.90%, Asian Paints up by 0.69% and UPL up by 0.67%. On the flip side, Dr. Reddy's Lab down by 6.08%, Larsen & Toubro down by 5.05%, Hindalco down by 3.08%, Bharti Airtel down by 1.12% and ITC down by 0.75% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted lost 92.69 points or 0.59% to 15,549.07, Jakarta Composite plunged 79 points or 1.16% to 6,732.91, Hang Seng declined 38.78 points or 0.2% to 19,723.42, Straits Times fell 10.39 points or 0.32% to 3,231.90 and Shanghai Composite weakened 3.6 points or 0.11% to 3,315.55. On the other hand, KOSPI increased 6.96 points or 0.28% to 2,503.47 and Nikkei 225 was up by 1.89 points or 0.01% to 29,124.07.