Benchmarks end Wednesday’s session in deep red

Indian equity benchmarks ended Wednesday’s trading session in deep red amid selling across the sectors. Key indices started the session on a positive note amid foreign fund inflows. Foreign institutional investors (FIIs) net bought shares worth Rs 73.12 crore on March 12, provisional data from the NSE showed. Some support also came with data showing that remaining within the Reserve Bank of India’s (RBI) comfort zone of 6 per cent for the sixth month in a row, India’s retail inflation eased to a four-month low of 5.09 per cent in February 2024. However, markets soon erased early gains and slipped into the negative zone, as traders turned cautious with data showing that growth in factory output, based on the Index of Industrial Production (IIP), slowed to 3.8 per cent in January 2024, mainly due to poor performance of manufacturing, mining and power sectors. It was 5.8 in January 2023.

The pace of decline intensified as the day progressed, pushing the Sensex and Nifty below psychological 72,800 and 22,000 levels respectively. Sentiments remained dampened with a report of economic think tank GTRI stating that with escalating everyday attacks and no end in sight, the Red Sea crisis will adversely impact trade volumes in substantial ways in 2024. The Global Trade Research Initiative (GTRI) said that rising shipping, and insurance costs and delayed arrival of shipments will continue to disrupt global value chains, squeeze margins, and make exports of many low-margin products unviable from current locations. Traders also avoided taking risk ahead of Wholesale Price Index (WPI) data, which is slated to be released on tomorrow.

On the global front, European markets were trading higher as investors digested mixed earnings results and looked ahead to the release of more U.S. data this week for clues on when the Federal Reserve will begin cutting interest rates. Asian markets settled mixed on Wednesday as hopes faded for an early rate cut by the U.S. Federal Reserve and investors monitored the early headlines on Japan's spring wage negotiations for clues on a possible shift in BOJ policy. 

Finally, the BSE Sensex fell 906.07 points or 1.23% to 72,761.89 and the CNX Nifty was down by 338.00 points or 1.51% to 21,997.70.

The BSE Sensex touched high and low of 74,052.75 and 72,515.71 respectively. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 4.20%, while Small cap index was down by 5.11%.

The top losing sectoral indices on the BSE were Utilities down by 7.21%, Power down by 6.35%, PSU down by 5.99%, Metal down by 5.75% and Telecom down by 5.45%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were ITC up by 4.49%, ICICI Bank up by 0.59%, Kotak Mahindra Bank up by 0.44%, Bajaj Finance up by 0.33% and HDFC Bank up by 0.01%. On the flip side, Power Grid Corporation down by 7.28%, NTPC down by 6.67%, Tata Steel down by 5.87%, Tata Motors down by 4.28% and JSW Steel down by 3.32% were the top losers.

Meanwhile, Commerce and Industry minister Piyush Goyal has exuded confidence that during this fiscal (FY24), the country's goods and services export numbers will be at the same level; as it was last year despite slowdown and uncertainties in the global trade. He also said that the government measures such production-linked incentives (PLI) schemes and focus on high-quality goods and services would help in containing the country's trade deficit. He said ‘so our trade deficit will be significantly lower than last year.’

The minister said the war between Russia and Ukraine; Israel-Hamas is impacting global supply chains and the Red Sea crisis has led to significant increase in transportation costs and delay as Indian exporters have to send their consignments through the Cape of Good Hope, encircling Africa. He said that India saw a scorching pace of growth in its international trade in the years between 2021 and 2023. He said ‘we grew by 55 per cent over a period of two years, both in goods and in services. It went up to $776 billion in only two years. And with growth on both goods and services, we could clearly see that this year is going to be one where we will have to consolidate the gains.’

Cumulatively, the country's merchandise exports in April-January 2023-24 contracted by 4.89 per cent to $353.92 billion. The estimated value of services exports during the ten-month period stood at $84.45 billion. In 2022-23, India's goods and services exports stood at $776 billion.

The CNX Nifty traded in a range of 22,446.75 and 21,905.65. There were 6 stocks advancing against 43 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were ITC up by 4.34%, ICICI Bank up by 0.48%, Kotak Mahindra Bank up by 0.29%, Cipla up by 0.13% and HDFC Bank up by 0.01%. On the flip side, Power Grid Corporation down by 7.07%, Coal India down by 7.00%, Adani Enterprises down by 6.81%, NTPC down by 6.70% and Adani Ports & SEZ down by 6.47% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 7.5 points or 0.1% to 7,755.31, France’s CAC rose 41.87 points or 0.52% to 8,129.35 and Germany’s DAX gained 21.56 points or 0.12% to 17,986.67.

Asian markets settled mixed on Wednesday as hotter than expected US inflation report diminished hopes for an early interest rate cut by the US Federal Reserve. Data showed that US CPI increased 0.4% for the month and 3.2% year-on-year in February, while the core CPI rose 0.4% on the month and was up 3.8% on the year. Chinese shares dropped due to lingering worries over the country's beleaguered property sector. Country Garden's onshore bondholders said they have not received a coupon payment due on Tuesday. The payment totalling 96 million yuan ($13 million) has a 30-day grace period. Japanese shares declined, while the yen strengthened amid more signs that the Bank of Japan will raise interest rates soon. Seoul shares gained tracking overnight Wall Street gains followed by megacap tech stocks. Meanwhile, South Korea’s unemployment rate in the country fell to 2.6% in February from 3% in the prior month.