Markets snap 3-days winning run

Snapping their three-days winning run, Indian equity benchmarks ended Tuesday’s trading session in the negative territory, amid selling seen in TECK, IT and Banking sectors. Markets made a weak start and traded in a negative zone throughout the day as traders were anxious with provisional data from the NSE showing that foreign institutional investors (FIIs) net sold shares worth Rs 3,309.76 crore on March 22. Some pessimism also came as the latest payroll data released by the Employee Provident Fund Organisation (EPFO) stated that the formal labour market in January experienced a slowdown as fewer fresh jobs were created during the month. In January 2024, the number of new monthly subscribers under the Employees’ Provident Fund (EPF) declined by nearly 4 per cent to 807,865 from 840,584 in December 2023.

However, markets managed to trim some losses in afternoon deals, as traders took some support with report that S&P Global Ratings has raised India's Gross domestic product (GDP) growth forecast for the next financial year (FY25) to 6.8 per cent, but flagged restrictive interest rates as a dampener for economic growth. In November 2023, it had projected India's growth to be 6.4 per cent in FY25 on robust domestic momentum. It said the Indian economy is estimated to have clocked a growth of 7.6 per cent in the current fiscal (FY24). But, markets failed to hold recovery and ended sharply lower in late afternoon deals, as traders turned wary after Ministry of Finance has warned the ongoing crisis along the Red Sea shipping route poses a risk to 80 percent of India’s goods trade with Europe and could lead to higher inflation and lower growth in India due to rising transport costs.  

On the global front, European markets were trading higher as traders looked ahead to the Easter break and the release of key European and U.S. inflation readings for directional cues. Asian markets settled mostly higher on Tuesday despite geopolitical tensions intensified and rate jitters persisted. Rising tensions in the Middle East and Russia boosted crude oil prices and brought inflation concerns to the fore.

Finally, the BSE Sensex fell 361.64 points or 0.50% to 72,470.30 and the CNX Nifty was down by 92.05 points or 0.42% to 22,004.70.

The BSE Sensex touched high and low of 72,705.29 and 72,363.03 respectively. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index rose 0.71%, while Small cap index was down by 0.11%.

The top gaining sectoral indices on the BSE were Realty up by 1.45%, Capital Goods up by 1.19%, Industrials up by 0.95%, Oil & Gas up by 0.84% and PSU up by 0.62%, while TECK down by 0.83%, IT down by 0.57%, Bankex down by 0.51%, FMCG down by 0.29% and Telecom down by 0.02% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.18%, Larsen & Toubro up by 1.38%, NTPC up by 1.32%, Axis Bank up by 0.81% and Tata Motors up by 0.66%. On the flip side, Power Grid Corporation down by 2.07%, Bharti Airtel down by 1.99%, Wipro down by 1.50%, Kotak Mahindra Bank down by 1.11% and HDFC Bank down by 1.11% were the top losers.

Meanwhile, the finance ministry in its Monthly Economic Review has said that with an uptick in private investment and inflation trending down, India’s outlook for the next fiscal looks positive. It also said that inclusion of Indian bonds in Bloomberg bond index from January 2025 should bolster inflows.

It said robust investment activity is driving growth amid a steady rise in consumption. The continued focus on public investment seems to have crowded in private investment. The National Statistical Office (NSO) has revised upwards the GDP growth estimate for current fiscal to 7.6 per cent from 7.3 per cent.

The ministry said India grew above 8 per cent for three consecutive quarters, reaffirming its position as a standout performer amid sluggish global growth trends. Various agencies echo a similar sentiment revising the FY24 growth estimates of India closer to 8 per cent. On the whole, India looks positively towards the dawn of FY25.

It said increased demand for residential properties in tier-2 and tier-3 cities augurs well for furthering construction activity. Non-farm employment has revived, improving the capacity to absorb the labour leaving agriculture. It added the ascent of manufacturing sector employment is expected to be marked by upscaling of enterprises and sunrise sectors emerging as catalysts for generating quality employment.

The CNX Nifty traded in a range of 22,073.20 and 21,947.55. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 2.43%, Hindalco up by 2.22%, Adani Ports & SEZ up by 1.83%, Britannia Industries up by 1.76% and NTPC up by 1.44%. On the flip side, Bharti Airtel down by 1.97%, Power Grid Corporation down by 1.90%, Eicher Motors down by 1.74%, Wipro down by 1.48% and Divi's Laboratories down by 1.32% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 2.58 points or 0.03% to 7,920.15, France’s CAC rose 16.33 points or 0.2% to 8,167.93 and Germany’s DAX gained 97.44 points or 0.53% to 18,358.75.

Asian markets settled mostly higher on Tuesday ahead of US personal consumption expenditure (PCE) inflation data and comments from central bank officials for additional clues on the interest rate outlook. Chinese shares gained after reports emerged that Chinese regulators are pushing banks to speed up approvals of new loans to cash-starved private property developers. Seoul shares buoyed as semiconductor shares surged. However, some gains were limited by rising geopolitical tensions and interest rate jitters persisted, while reports showing China has introduced new guidelines aimed at blocking Intel and AMD chips in government PCs and servers.