Heavy sell-off drags markets in deep red

Heavy sell-off dragged markets in deep red in early afternoon session, with both Sensex and Nifty trading near their intraday low points, amid mixed cues from other Asian markets. Traders were cautious, amid the UN's latest report showing that prospects for a robust global economic recovery remain dim as the lingering effects of the COVID-19 pandemic carry on. The report found that risks of a prolonged period of low growth stand, amid stubborn inflation, rising interest rates, and heightened uncertainties, in addition to the ever- worsening impact of climate change. Some concerns came with a private report stating that a cash crunch is persisting in India, pushing short-term borrowing costs above a key policy interest rate and posing risks to an economy that needs cheaper funding to sustain its recovery.

On the global front, Asian markets were trading mixed, after Japan's industrial production expanded more than initially estimated in March. The revised data from the Ministry of Economy, Trade, and Industry showed that industrial production rose by a seasonally adjusted 1.1 percent month-on-month in March, slower than the strong rebound of 4.6 percent in February. In the flash report, the rate of increase was 0.8 percent.

The BSE Sensex is currently trading at 61457.31, down by 475.16 points or 0.77% after trading in a range of 61410.64 and 61979.94. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.63%, while Small cap index was down by 0.17%.

The only gaining sectoral index on the BSE was Auto up by 0.03%, while Realty down by 1.86%, TECK down by 1.30%, IT down by 1.27%, Consumer Durables down by 0.97% and Metal down by 0.88% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 0.81%, Mahindra & Mahindra up by 0.44%, Bharti Airtel up by 0.30%, ITC up by 0.11% and Maruti Suzuki up by 0.10%. On the flip side, HCL Technologies down by 2.43%, Kotak Mahindra Bank down by 2.33%, TCS down by 1.71%, Infosys down by 1.59% and Bajaj Finance down by 1.54% were the top losers.

Meanwhile, United Nations (UN) in its latest report has said that India’s economy is expected to grow by 6.7 per cent in the calendar year 2024, supported by resilient domestic demand. It said inflation in India is expected to decelerate to 5.5 per cent in 2023 as global commodity prices moderate and slower currency depreciation reduces imported inflation. However, it said higher interest rates and weaker external demand will continue to weigh on investment and exports in 2023.

The report stated that the estimates for India’s economic growth in the mid-year assessment remained unchanged from the projections made in the World Economic Situation and Prospects 2023 report launched in January this year.  The flagship report issued in January had said that India’s GDP is projected to moderate to 5.8 per cent in 2023 as higher interest rates and global economic slowdown weigh on investment and exports. India’s economic growth is expected to remain strong even as prospects for other South Asian nations ‘are more challenging’. 

According to the report, the world economy is now projected to grow by 2.3 per cent in 2023 (+0.4 percentage points from the January forecast) and 2.5 per cent in 2024 (-0.2 percentage points), a slight uptick in the global growth forecast for 2023. In the US, resilient household spending has prompted an upward revision of the growth forecast to 1.1 per cent in 2023. The European Union’s economy-driven by lower gas prices and robust consumer spending-is now projected to grow by 0.9 per cent.

The CNX Nifty is currently trading at 18147.70, down by 138.80 points or 0.76% after trading in a range of 18134.05 and 18309.00. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 1.20%, Indusind Bank up by 0.81%, BPCL up by 0.75%, Mahindra & Mahindra up by 0.48% and Bharti Airtel up by 0.42%. On the flip side, Kotak Mahindra Bank down by 2.42%, HCL Technologies down by 2.35%, Apollo Hospital down by 1.98%, TCS down by 1.80% and Infosys down by 1.62% were the top losers.

Asian markets were trading mixed; Taiwan Weighted added 251.39 points or 1.58% to 15,925.29, Nikkei 225 surged 250.6 points or 0.83% to 30,093.59, KOSPI increased 14.42 points or 0.58% to 2,494.66 and Jakarta Composite gained 7.28 points or 0.11% to 6,683.84, while Shanghai Composite weakened 15.64 points or 0.48% to 3,275.35, Straits Times fell 40.08 points or 1.25% to 3,173.96 and Hang Seng declined 233.61 points or 1.17% to 19,744.64.